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EXHIBIT 13.2
AMENDED AND RESTATED PLEDGE AGREEMENT
THIS AMENDED AND RESTATED PLEDGE AGREEMENT, effective as the 17th day
of April, 2001 (this "Pledge Agreement"), by and among Xxxxx X. Xxxxxxxxxx, Xx.
("Xxxxxxxxxx"), PF Management, Inc. a North Carolina corporation with principal
offices in Hickory, North Carolina, ("PFM"), Xxxxxxx X. Xxxxxx, Xx., (the
"Pledgee"), and T. Xxxxxxx Xxxxxx, as agent for the Pledgee (the "Agent")
WITNESSETH:
WHEREAS, Xxxxxxxxxx and the Pledgee have heretofore entered into a
Pledge Agreement dated January 31, 2000 (the "Original Pledge Agreement"),
pursuant to which Xxxxxxxxxx pledged to the Pledgee 422,011 shares (the "Pledged
Shares") of the common stock of Fresh Foods, Inc. (which subsequently changed
its name to "Pierre Foods, Inc." and is hereinafter referred to as "Pierre
Foods"), to secure Xxxxxxxxxx'x obligations thereunder and under a promissory
note dated January 31, 2000 from Xxxxxxxxxx to the Pledgee in the original
principal amount of $3,598,910.06 (the "Note"); and
WHEREAS, contemporaneously herewith, Xxxxxxxxxx is transferring and
assigning to PFM all of Xxxxxxxxxx'x rights in and to the Pledged Shares,
subject to the pledge thereof and security interest therein granted pursuant to
the Original Pledge Agreement, as amended and restated by this Pledge Agreement,
and PFM is assuming all of the obligations of Xxxxxxxxxx under the Note and this
Pledge Agreement (the "Pledgor Obligations," as further defined in Section 2
hereof) pursuant to an Assumption Agreement among Xxxxxxxxxx, PFM and the
Pledgee dated the date hereof (the "Assumption Agreement"), provided that
Xxxxxxxxxx shall continue to be fully liable for such Pledgor Obligations,
jointly and severally with PFM (Xxxxxxxxxx and PFM collectively being referred
to in this Pledge Agreement, jointly and severally, as the "Pledgor"); and
WHEREAS, contemporaneously herewith, the Pledgor and the Pledgee have
caused a certificate or certificates for the Pledged Shares to be issued,
registered in the name of PFM, and such certificate or certificates, together
with a stock power duly endorsed in blank with signatures guaranteed and a
certified resolution of the Board of Directors of PFM authorizing such
endorsement, to be delivered to the Agent to be held by him as agent for the
Pledgee hereunder; and
WHEREAS, as a condition precedent to the transfer of the Pledged Shares
and the assumption of the Pledgor Obligations and as an inducement to the
Pledgee for permitting such transfer and assumption, and to facilitate such
transfer and assumption and provide for the addition of PFM as a party hereto,
the Pledgor has agreed to amend and restate the Original Pledge Agreement to be
as set forth in this Pledge Agreement.
NOW, THEREFORE, the parties hereto do hereby agree that the Original
Pledge Agreement is hereby amended and restated to be as set forth in this
Pledge Agreement, and hereby agree as follows:
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1. Pledge and Grant of Security Interest. To secure the prompt
payment and performance in full when due, whether by lapse of time or otherwise,
of the Pledgor Obligations (as defined in Section 2 hereof), the Pledgor hereby
pledges and assigns to the Pledgee, and grants to the Pledgee, a continuing
first priority security interest in, any and all right, title and interest of
the Pledgor in and to the following, whether now owned or existing or owned,
acquired, or arising hereafter (collectively, the "Pledged Collateral"):
(a) Pledged Shares. The 422,011 shares of the issued and
outstanding capital stock of Pierre Foods owned by the Pledgor as
described on Exhibit A attached hereto (being the same shares pledged
pursuant to, and referred to as the "Shares" in, the Original Pledge
Agreement), together with the certificates (or other agreements or
instruments), if any, representing such shares, and all options and
other rights, contractual or otherwise, with respect thereto
(collectively, together with the shares of capital stock described in
(i) and (ii) below, the "Pledged Shares"), including, but not limited
to, the following:
(i) all shares, securities or certificates
representing a dividend on any of the Pledged Shares, or
representing a distribution or return of capital upon or in
respect of the Pledged Shares, or resulting from a stock
split, revision, reclassification or other exchange therefor,
and any subscriptions, warrants, rights or options issued to
the holder of, or otherwise in respect of the Pledged Shares;
(ii) without affecting the obligations of the
Pledgor under any provision prohibiting such action hereunder,
in the event of any consolidation or merger in which Pierre
Foods is not the surviving corporation, all shares of each
class of the capital stock of the successor corporation formed
by or resulting from such consolidation or merger; and
(iii) except as otherwise provided herein, all
other dividends and distributions on or with respect to, and
all securities, cash or other property issued in exchange or
substitution for, the Pledged Shares or any of the foregoing.
(b) Proceeds. All proceeds and products of the foregoing,
however and whenever acquired and in whatever form, including cash
distributions or sums received attributable to the Pledged Shares,
excepting Ordinary Dividends (as defined in Section 9(f)) to the extent
such Ordinary Dividends are expressly permitted to be retained by the
Pledgor pursuant to Section 9(f).
2. Security for Pledgor Obligations. The security interest
created hereby in the Pledged Collateral of the Pledgor constitutes continuing
collateral security for all of the following, whether now existing or hereafter
incurred (the "Pledgor Obligations"):
(a) the Note and all obligations of the Pledgor
thereunder;
(b) all obligations of the Pledgor under this Pledge
Agreement; and
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(c) all expenses and charges, legal and otherwise,
reasonably incurred by the Agent and/or the Pledgee in collecting or
enforcing the Note or in realizing on or protecting any security
therefor, including without limitation the security afforded hereunder.
3. Delivery of the Pledged Collateral. The Pledgor hereby agrees
that:
(a) Delivery of Certificates. The Pledgor shall deliver
to the Agent, for the benefit of the Pledgee, (i) simultaneously with
or prior to the execution and delivery of this Pledge Agreement, all
certificates representing the Pledged Shares, receipt of which is
hereby acknowledged by the Agent, and (ii) promptly upon the receipt
thereof by or on behalf of the Pledgor, all other certificates and
instruments constituting Pledged Collateral. Prior to delivery to the
Agent, all such certificates and instruments constituting Pledged
Collateral of the Pledgor shall be held in trust by the Pledgor for the
benefit of the Pledgee pursuant hereto. All such certificates shall be
delivered in suitable form for transfer by delivery or shall be
accompanied by duly executed instruments of transfer or assignment in
blank, with all necessary endorsements and all such assurances and
other documents as may be necessary, or reasonably requested by the
Pledgee or the Agent, to provide for the prompt and effective transfer
thereof.
(b) Additional Securities. If the Pledgor shall receive by virtue
of its being or having been the owner of any Pledged Collateral, any
(i) stock certificate or other certificate evidencing an ownership
interest, including without limitation, any certificate representing a
dividend or distribution in connection with any increase or reduction
of capital, reclassification, merger, consolidation, sale of assets,
combination of shares, stock splits, spin-off or split-off, promissory
notes or other instrument; (ii) option or right whether as an addition
to, substitution for, or an exchange for, any Pledged Collateral or
otherwise; (iii) dividends payable in securities or other certificate
evidencing an ownership interest; or (iv) distributions of securities
or other certificate evidencing an ownership interest in connection
with a partial or total liquidation, dissolution or reduction of
capital, capital surplus or paid-in surplus, then the Pledgor shall
receive such security, certificate, instrument, option, right or
distribution in trust for the benefit of the Pledgee, shall segregate
it from the Pledgor's other property and shall deliver it forthwith to
the Agent for the benefit of the Pledgee in the exact form received
together with any necessary endorsement and/or appropriate stock power
duly executed in blank, with all necessary endorsements and all such
assurances and other documents as may be necessary, or reasonably
requested by the Pledgee or the Agent, to provide for the prompt and
effective transfer thereof, to be held by the Agent for the benefit of
the Pledgee as Pledged Collateral and as further collateral security
for the Pledgor Obligations.
(c) Financing Statements. The Pledgor shall execute and
deliver to the Agent or the Pledgee such UCC or other applicable
financing statements as may be reasonably requested by the Agent or the
Pledgee in order to perfect and protect the security interest created
hereby in the Pledged Collateral.
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4. Representations and Warranties. The Pledgor hereby represents
and warrants to the Agent, for the benefit of the Pledgee, that so long as any
of the Pledgor Obligations remain outstanding:
(a) Authorization of Pledged Shares. The Pledged Shares
are duly authorized and validly issued, are fully paid and
nonassessable, and are not subject to preemptive rights. All other
shares of capital stock constituting Pledged Collateral will be duly
authorized and validly issued, fully paid and nonassessable, and not
subject to preemptive rights.
(b) Title. The Pledgor has good and indefeasible title to
the Pledged Collateral and will at all times be the legal and
beneficial owner of such Pledged Collateral free and clear of any
pledges, hypothecations, liens, security interests, charges, options,
restrictions or other encumbrances (collectively "Liens"), except the
security interest created by this Pledge Agreement (the "Permitted
Lien"). There exists no "adverse claim" within the meaning of Section
8-302 of the Uniform Commercial Code as in effect in the State of North
Carolina (the "UCC") with respect to the Pledged Shares.
(c) Exercising of Rights. The exercise by the Agent of
its rights and remedies hereunder will not violate any law or
governmental regulation or any material contractual restriction binding
on or affecting the Pledgor or any of its property.
(d) Pledgor's Authority. No authorization, approval or
action by, and no notice or filing with any governmental authority or
with the issuer of any Pledged Shares is required either (i) for the
pledge made by the Pledgor or for the granting of the security interest
by the Pledgor pursuant to this Pledge Agreement or (ii) for the
exercise by the Agent or the Pledgee of their rights and remedies
hereunder (except as may be required by laws affecting the offering and
sale of securities),
(e) Security Interest/Priority. This Pledge Agreement
creates a valid security interest in favor of the Pledgee in the
Pledged Collateral. The taking of possession by the Agent of the
certificates representing the certificated Pledged Shares and all other
certificates and instruments constituting the Pledged Collateral will
perfect and establish the first priority of the Pledgee's security
interest in the certificated Pledged Shares and, when properly
perfected by filing or registration, in all other Pledged Collateral
represented by such Pledged Shares and instruments securing the Pledgor
Obligations. The Pledged Shares are represented by certificated shares.
In the event any securities or other items of investment property
constituting the Pledged Collateral are uncertificated, the Pledgor
agrees to take all action, or permit the Agent to take such action, as
necessary or reasonably requested by the Pledgee to certificate such
securities or other investment property or as may be necessary or
reasonably requested by the Pledgee to perfect an established first
priority security interest therein.
5. Covenants. The Pledgor hereby covenants that, so long as any
of the Pledgor Obligations remain outstanding, the Pledgor shall:
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(a) Books and Record . Xxxx its books and records to
reflect the security interest granted to the Pledgee pursuant to this
Pledge Agreement.
(b) Defense of Title. Warrant and defend title to and
ownership of the Pledged Collateral of the Pledgor at its own expense
against the claims and demands of all other parties claiming an
interest therein, keep the Pledged Collateral free from all Liens,
except for the Permitted Lien, and not sell, exchange, transfer,
assign, or otherwise dispose of the Pledged Collateral or any interest
therein.
(c) Further Assurances. Promptly execute and deliver at
its expense all further instruments and documents and take all further
action that may be necessary and desirable or that the Agent or the
Pledgee may reasonably request in order to (i) perfect and protect the
security interest created hereby in the Pledged Collateral (including
without limitation any and all action necessary to satisfy the Agent or
the Pledgee that the Pledgee has obtained a first priority perfected
security interest in any capital stock); (ii) enable the Agent or the
Pledgee to exercise and enforce its rights and remedies hereunder in
respect of the Pledged Collateral, and (iii) otherwise effect the
purposes of this Pledge Agreement, including without limitation and if
requested by the Agent or the Pledgee, delivering to the Pledgee
irrevocable proxies in respect of the Pledged Collateral.
(d) Amendments. Not make or consent to any amendment or
other modification or waiver with respect to any of the Pledged
Collateral or enter into any agreement or allow to exist any
restriction with respect to any of the Pledged Collateral.
(e) Compliance with Securities Laws. File all reports and
other information now or hereafter required to be filed by the Pledgor
with the United States Securities and Exchange Commission (the "SEC")
and any other state, federal or foreign agency in connection with the
ownership of the Pledged Collateral.
(f) Reimbursement of Expenses. Upon demand by the
Pledgee, the Pledgor shall reimburse the Pledgee for all expenses
incurred by the Pledgee in connection with his entering into this
Pledge Agreement and the Assumption Agreement and the transfer of the
Pledged Shares to PFM, including without limitation the reasonable fees
and expenses of the Pledgee's counsel and the costs and expenses and
reasonable counsel fees incurred by the Pledgee in connection with any
amendment to his filings with the SEC required in connection therewith.
6. Advances by Pledgee. On failure of the Pledgor or the Agent to
perform any of the covenants and agreements contained herein, the Pledgee may
perform the same and in so doing may expend such sums as the Pledgee may
reasonably deem advisable in the performance thereof and for the protection of
the security hereof. All such sums and amounts so expended by the Pledgee shall
be repayable by the Pledgor promptly upon timely notice thereof and demand
therefor and shall constitute additional Pledgor Obligations and shall bear
interest from the date said amounts are expended at the default rate specified
in the Note. No such performance of any covenant or agreement by the Pledgee on
behalf of the Pledgor, and no such advance or
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expenditure therefor, shall relieve the Pledgor of any default under the term of
this Pledge Agreement or the Note.
7. Events of Default. The occurrence of any one or more of the
following shall constitute an "Event of Default" hereunder and under the Note:
(a) The failure to make any payment or prepayment of
principal of or interest on the Note after the same becomes due, unless such
failure is cured within ten (10) days from the due date; or
(b) The failure of Xxxxxxxxxx to maintain life insurance
on his life in an amount at least equal to the outstanding principal balance of
the Note with an appropriate collateral assignment of such policy and the
proceeds thereof reasonably satisfactory to the Pledgee to secure payment of the
Note, subject to no other liens, encumbrances or adverse claims (the "Collateral
Assignment"); or
(c) The failure of the Pledgor to perform any other
obligations under this Pledge Agreement or the Note, or the failure of
Xxxxxxxxxx to perform any other obligations under the Collateral Assignment,
unless such failure is cured within fifteen (15) days after notice thereof is
given to the Pledgor; or
(d) The failure of Xxxxxxxxxx to perform any of his
obligations under his Guaranty Agreement dated January 31, 2000 in favor of the
Pledgee (the "Guaranty Agreement"), unless such failure is cured within fifteen
(15) days after notice thereof is given to the Pledgor; or
(e) The commencement of any proceedings by or against
Xxxxxxxxxx or PFM as debtor, under any applicable bankruptcy, insolvency or
similar laws for the relief of debtors, other than an involuntary proceeding
that is dismissed within 60 days after commencement, or any general assignment
by Xxxxxxxxxx or PFM for the benefit of creditors, or any other action taken by
Xxxxxxxxxx or PFM or their creditors resulting in the marshalling of either of
their assets and liabilities to pay creditors.
8. Remedies.
(a) General Remedies. Upon the occurrence of an Event of
Default and notice thereof from the Pledgee, the Agent shall deliver to
the Pledgee the Pledged Collateral and the Pledgee shall, in addition
to the rights and remedies provided herein, in the Note or by law, have
the rights and remedies of a secured party under the UCC or any other
applicable law.
(b) Sale of Pledged Collateral. Upon the occurrence of an
Event of Default and during the continuation thereof, without limiting
the generality of this Section and without notice, the Pledgee may, in
his sole discretion, sell or otherwise dispose of or realize upon the
Pledged Collateral, or any part thereof, in one or more parcels, at
public or private sale, at any exchange or broker's board or elsewhere,
at such price or prices and on such
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other terms as the Pledgee may deem commercially reasonable, for cash,
credit or for future delivery or otherwise in accordance with
applicable law. To the extent permitted by law, the Pledgee may in such
event, bid for the purchase of such securities or certificates. The
Pledgor agrees that, to the extent notice of sale shall be required by
law and has not been waived by the Pledgor, any requirement of
reasonable notice shall be met if notice, specifying the place of any
public sale or the time after which any private sale is to be made, is
personally served on or mailed, postage prepaid, to the Pledgor at
least 10 days before the time of such sale. The Pledgee shall not be
obligated to make any sale of Pledged Collateral of the Pledgor
regardless of notice of sale having been given. The Pledgee may adjourn
any public or private sale from time to time by announcement at the
time and place fixed therefor, and such sale may, without further
notice, be made at the time and place to which it was so adjourned.
(c) Private Sale. Upon the occurrence of an Event of
Default and during the continuation thereof, the Pledgor recognizes
that the Pledgee may deem it impracticable to effect a public sale of
all or any part of the Pledged Shares or any of the securities or
certificates constituting Pledged Collateral and that the Pledgee may,
therefore, determine to make one or more private sales of any such
securities or certificates to a restricted group of purchasers who will
be obligated to agree, among other things, to acquire such securities
or certificates for their own account, for investment and not with a
view to the distribution or resale thereof. The Pledgor acknowledges
that any such private sale may be at prices and on terms less favorable
to the seller than the prices and other terms which might have been
obtained at a public sale and, notwithstanding the foregoing, agrees
that such private sale shall be deemed to have been made in a
commercially reasonable manner and that the Pledgee shall have no
obligation to delay sale of any such securities or certificates for the
period of time necessary to permit the issuer of such securities or
certificates to register such securities or certificates for public
sale under the Securities Act of 1933. The Pledgor further acknowledges
and agrees that any offer to sell such securities which has been (i)
publicly advertised on a bona fide basis in a newspaper or other
publication of general circulation in the financial community of New
York, New York (to the extent that such offer may be advertised without
prior registration under the Securities Act of 1933), or (ii) made
privately in the manner described above shall be deemed to involve a
"public sale" under the UCC, notwithstanding that such sale may not
constitute a "public offering" under the Securities Act of 1933, and
the Pledgee may, in such event, bid for the purchase of such securities
or certificates.
(d) Retention of Pledged Collateral. In addition to the
rights and remedies hereunder, upon the occurrence of an Event of
Default, the Pledgee, after providing the notices required by Section
9-505(2) of the UCC or otherwise complying with the requirements of
applicable law of the relevant jurisdiction, may retain all or any
portion of the Pledged Collateral in satisfaction of the Pledgor
Obligations. Unless and until the Pledgee shall have provided such
notices, however, the Pledgee shall not be deemed to have retained any
Pledged Collateral in satisfaction of any Pledgor Obligations for any
reason.
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(e) Deficiency. In the event that the proceeds of any
sale, collection or realization, after the payment of all expenses of
retaking, holding, preparing for disposition, processing and disposing
of the Pledged Collateral, are insufficient to pay all amounts to which
the Pledgee is legally entitled, the Pledgor shall be jointly and
severally liable for the deficiency, together with interest thereon at
the default rate specified in the Note, together with the costs of
collection and the reasonable fees of any attorneys employed by the
Pledgee to collect such deficiency. Any surplus remaining after the
full payment and satisfaction of the Pledgor Obligations shall be
returned to the Pledgor or to whomsoever a court of competent
jurisdiction shall determine to be entitled thereto.
9. Miscellaneous.
(a) Power of Attorney. In addition to other powers of
attorney contained herein, the Pledgor hereby designates and appoints
each of the Agent, on behalf of the Pledgee, and the Pledgee,
irrevocably and with power of substitution, as the Pledgor's agent and
attorney-in-fact with authority to take any or all of the following
actions (with the Agent, acting alone, to have all such authority for
so long as no Event of Default has occurred and is continuing and
provided the Agent shall not have failed or refused to exercise such
authority after having been directed by the Pledgee in writing to do
so, and with the Pledgee, acting alone, to have all such authority upon
and during the continuation uncured of any Event of Default, or at any
other time if the Agent shall have failed or refused to exercise such
authority after having been directed by the Pledgee in writing to do
so):
(i) to direct any parties liable for any payment
under any of the Pledged Collateral to make payment of any and
all monies due and to become due thereunder directly to the
Agent (or the Pledgee, once the Pledged Collateral is required
to be delivered to the Pledgee) or as the Agent or Pledgee
shall direct;
(ii) to receive payment of and receipt for any
and all monies, claims, and other amounts due and to become
due at any time in respect of or arising out of any Pledged
Collateral;
(iii) to sign and endorse any drafts, assignments,
proxies, stock powers, verifications, notices and other
documents relating to the Pledged Collateral;
(iv) execute and deliver all assignments,
conveyances, statements, financing statements, renewal
financing statements, pledge agreements, affidavits, notices
and other agreements, instruments and documents that the Agent
or the Pledgee may determine necessary in order to perfect and
maintain the security interests and liens granted in this
Pledge Agreement and in order to fully consummate all of the
transactions contemplated therein;
(v) to do and perform all such other acts and
things as the Agent or the Pledgee may reasonably deem to be
necessary, proper or convenient in connection with the Pledged
Collateral.
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This power of attorney is a power coupled with an interest and shall be
irrevocable for so long as any of the Pledgor Obligations remain
outstanding. The Agent and the Pledgee shall be under no duty to
exercise or withhold the exercise of any of the rights, powers,
privileges and options expressly or implicitly granted to the Agent and
the Pledgee in this Pledge Agreement, and shall not be liable for any
failure to do so or any delay in doing so. The Agent and the Pledgee
shall not be liable for any act or omission or for any error of
judgment or any mistake of fact or law in its individual capacity or
its capacity as attorney-in-fact except acts or omissions resulting
from its gross negligence or willful misconduct or its failure to
perform the specific duties expressly set forth in this Pledge
Agreement. This power of attorney is conferred on the Agent and the
Pledgee solely to protect, preserve and realize upon its security
interest in Pledged Collateral.
(b) Limited Responsibility of Agent. Prior to an Event of
Default, the Agent shall not effect or permit any sales, exchanges or
other dispositions of the Pledged Collateral without the prior written
consent of the Pledgee and Pledgor. Notwithstanding anything hereunto
the contrary, other than safeguarding and preserving the Pledged
Collateral and delivering it as herein provided, the Agent will have no
responsibility to take any action under this Agreement unless its
reasonable fees for commencing and completing such action have been
paid in advance by either the Pledgor or the Pledgee (but, if paid by
the Pledgee, the Pledgor shall promptly reimburse the Pledgee
therefor). The Agent shall have no duty to investigate or make any
determination as to whether an Event of Default exists under the Note
and shall comply with the instructions accompanying a notice of default
from the Pledgee without regard to whether the Agent believes such a
default exists. The Pledgor hereby agrees to indemnify and hold
harmless Agent against any and all claims, causes of action,
liabilities, and damages, including without limitation, in and all
court costs and reasonable attorneys fees, in any way related to or
arising out of or in connection with this Pledge Agreement or any
action taken or not taken pursuant hereto, except to the extent cause
by Agent's gross negligence or willful misconduct.
(c) Resignation and Removal. The Agent reserves the right
to resign as the Agent under this Agreement, such resignation to be
effective upon ten (10) days written notice thereof given to the
Pledgor and the Pledgee. In addition, the Pledgee may remove the Agent
if the Agent for any reason shall cease to be licensed as an active
member of the North Carolina State Bar, and any court of competent
jurisdiction may remove the Agent at the motion of any other party to
this Pledge Agreement if the court shall determine that such removal is
warranted due to the inability, by reason of his physical, mental or
emotional health, of the Agent to perform its duties hereunder or the
other failure or refusal of the Agent to perform such duties. Upon the
resignation, removal or death of the Agent, the Pledgee shall appoint a
successor Agent to succeed to all of the rights and obligations of the
Agent hereunder, which successor Agent shall be an active member of the
North Carolina State Bar unless the Pledgor and the Pledgee shall
otherwise agree. Upon notification of the appointment of a successor
Agent by the Pledgee, the Agent shall deliver all Pledged Collateral to
said successor Agent, and shall thereafter have no further
responsibility or obligations hereunder. In the event the successor
Agent is not appointed within ten days after the Agent has given the
requisite notice of resignation, or within ten days after the Agent has
been removed, the Agent may, unless the Pledgor and the
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Pledgee mutually agree to some other arrangement, at the Agent's
election, either: (i) deliver all Pledged Collateral to the Pledgee,
whereupon the rights and duties of the Agent shall devolve upon the
Pledgee, or (ii) petition any court of competent jurisdiction to
appoint a successor Agent and tender into the custody of such court
pending such appointment all Pledged Collateral in its hands under the
terms of this Pledge Agreement, and in either event shall thereafter be
discharged from any further obligations hereunder.
(d) The Agent's Duty of Care. Other than the exercise of
reasonable care to assure the safe custody of the Pledged Collateral
while being held by the Agent hereunder and the delivery of the Pledged
Collateral as provided hereunder, the Agent shall have no other duty or
liability. The Agent shall be deemed to have exercised reasonable care
in the custody and preservation of the Pledged Collateral in its
possession if such Pledged Collateral is accorded treatment
substantially equal to that which the Agent accords its own property,
which shall be no less than the treatment employed by a reasonable and
prudent agent in the industry.
(e) Voting Rights in Respect of the Pledged Collateral.
(i) So long as no Event of Default shall have
occurred and be continuing, to the extent permitted by law,
PFM may exercise any and all voting and other consensual
rights pertaining to the Pledged Collateral or any part
thereof for any purpose not inconsistent with the terms of
this Pledge Agreement or the Note; and
(ii) Upon the occurrence and during the
continuance of an Event of Default and notice thereof by the
Pledgee, all rights of PFM to exercise the voting and other
consensual rights which it would otherwise be entitled to
exercise pursuant to paragraph (i) of this Section shall cease
and all such rights shall thereupon become vested in the
Pledgee which shall then have the sole right to exercise such
voting and other consensual rights.
(f) Dividend Rights in Respect of the Pledged Collateral.
(i) So long as no Event of Default shall have
occurred and be continuing, PFM may receive and retain any and
all dividends (other than stock dividends and other dividends
constituting Pledged Collateral which are addressed
hereinabove) paid in respect of the Pledged Collateral to the
extent such dividends are ordinary or regular periodic
dividends paid on the Pledged Collateral and together with all
other such dividends paid within the preceding twelve (12)
months does not exceed 6% of the then fair market value of the
Pledged Shares on which such dividend is paid (herein
"Ordinary Dividends"); and all cash dividends other than
Ordinary Dividends shall be paid to and held by the Agent or
the Pledgor (as applicable) as additional Pledged Collateral
hereunder.
(ii) Upon the occurrence and during the
continuance of an Event of Default and notice thereof by the
Pledgee:
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(A) all rights of the Pledgor to
receive the dividends payments which it would
otherwise be authorized to receive and retain
pursuant to paragraph (i) of this Section shall cease
and all such rights shall thereupon be vested in the
Pledgee which shall then have the sole right to
receive and hold as Pledged Collateral such dividends
payments; and
(B) all dividend payments which are
received by the Pledgor contrary to the provisions of
paragraph (A) of this Section shall be received in
trust for the benefit of the Pledgee, shall be
segregated from other property or funds of the
Pledgor, and shall be forthwith paid over and
endorsed to the Pledgee as Pledged Collateral in the
exact form received, to be held by the Pledgee as
Pledged Collateral and as further collateral security
for the Pledgor Obligations.
10. Application of Proceeds . Upon the occurrence of and during
the continuance of an Event of Default, any payments in respect of the Pledgor
Obligations and any proceeds of any Pledged Collateral, when received by the
Agent or the Pledgee, will be applied first to the reasonable costs and expenses
of retaking, holding, preparing for disposition, processing and disposing of the
Pledged Collateral (including reasonable attorneys' fees and legal expenses) and
then to satisfaction of the Secured Obligations in such order as the Pledgee may
determine, with any surplus to be paid to PFM or whoever may be lawfully
entitled to receive such surplus. The Pledgor shall remain jointly and severally
liable to the Pledgee for any deficiency.
11. Continuing Agreement.
(a) This Pledge Agreement shall be a continuing agreement
in every respect and shall remain in full force and effect so long the
Pledgor Obligations remain outstanding. Upon full and final
indefeasible payment of the Pledgor Obligations, this Pledge Agreement
shall be automatically terminated and the Pledgee shall, upon the
request of the Pledgor, forthwith release all of its liens and security
interests hereunder and shall execute and deliver all UCC termination
statements and/or other documents reasonably requested by the Pledgor
evidencing such termination. Upon full satisfaction of the Pledgor
Obligations and notice of such satisfaction from the Pledgee, Agent
shall promptly assign and deliver to PFM, or to such person or persons
as PFM shall designate, all of the Pledged Collateral still held
hereunder, accompanied by appropriate instruments of reassignment. Any
such reassignment shall be without recourse to or warranty by the
Pledgee or the Agent. Notwithstanding the foregoing, all releases and
indemnities provided hereunder shall survive termination of this Pledge
Agreement.
(b) This Pledge Agreement shall continue to be effective
or be automatically reinstated, as the case may be, if at any time
payment, in whole or in part, of any of the Pledgor Obligations is
rescinded or must otherwise be restored or returned by the Agent or the
Pledgee as a preference, fraudulent conveyance or otherwise under any
bankruptcy, insolvency or similar law, all as though such payment had
not been made; provided that in the event payment of all or any part of
the Pledgor Obligations is rescinded or must be restored or returned,
all reasonable costs and expenses (including without limitation any
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reasonable legal fees and disbursements) incurred by the Pledgee in
defending and enforcing such reinstatement shall be deemed to be
included as a part of the Pledgor Obligations.
12. Amendments; Waivers; Modifications. This Pledge Agreement and
the provisions hereof may not be amended, waived, modified, changed, discharged
or terminated except with the written consent of the Pledgee and each other
party hereto who is affected by such amendment, waiver, modification, change,
discharge or termination. No waiver by the Pledgee of any rights hereunder at
any time shall evidence any waiver of any other rights or any waiver of such
rights at any other time. The Pledgee may release or grant waivers or other
indulgences to either Xxxxxxxxxx or PFM hereunder without releasing or granting
waivers or other indulgences to the other, and no such release of Xxxxxxxxxx or
PFM or grant of a waiver or other indulgence to either thereof shall in any way
impair or reduce the obligations of the other.
13. Successors in Interest. This Pledge Agreement shall create a
continuing security interest in the Pledged Collateral and shall be binding
jointly and severally upon Xxxxxxxxxx and PFM as the Pledgor hereunder, their
heirs, successors and assigns, and shall inure, together with the rights and
remedies of the Agent and the Pledgee hereunder, to the benefit of the Agent and
the Pledgee and their successors and permitted assigns; provided, however,
neither PFM or Xxxxxxxxxx may assign its rights or delegate its duties hereunder
without the prior written consent of the Pledgee. To the fullest extent
permitted by law, PFM and Xxxxxxxxxx hereby release the Agent and the Pledgee,
and their heirs, successors and permitted assigns, from any liability for any
act or omission relating to this Pledge Agreement or the Pledged Collateral,
except for any liability arising from the gross negligence or willful misconduct
of the Agent, or the Pledgee, respectively, or their respective officers,
employees or agents.
14. Notices. All notices, requests, demands and other
communications under this Agreement shall be in writing and shall be addressed
to the respective parties at the following addresses (such party's "Notice
Address"):
If to the Pledgee: Xxxxxxx X. Xxxxxx, Xx.
0000 Xxxx Xxxx Xxxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Facsimile: (000) 000-0000
If to PFM or Xxxxxxxxxx: c/o PF Management, Inc.
Xxxx Xxxxxx Xxx 0000
Xxxxxxx, Xxxxx Xxxxxxxx 00000
Attn: Xxxxx X. Xxxxx
Facsimile: (000) 000-0000
Street Address: 000 Xxxxxx Xxxxxx, XX
Xxxxxxx, Xxxxx Xxxxxxxx 00000
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If to the Agent: T. Xxxxxxx Xxxxxx
Battle, Xxxxxxx, Xxxxx & Xxxxx, P.A.
0000 Xxxxxxxxxxxx Xxxxx
Xxxx Xxxxxx Xxx 0000
Xxxxx Xxxxx, Xxxxx Xxxxxxxx 00000
Facsimile: (000) 000-0000
or to such other address as the party to receive any such communication or
notice may have designated by written notice to the other party.
Any such notice shall be deemed effectively given to a party on the
first to occur of (a) the third business day after the date of mailing thereof,
if mailed to such party by first class registered or certified United States
mail, postage prepaid, addressed to such party at such party's Notice Address,
or (b) the date on which such notice is actually delivered (whether by mail,
courier, hand delivery, facsimile transmission or otherwise) to such party's
Notice Address and addressed to such party, if such delivery occurs on a
business day, or if such delivery occurs on a day which is not a business day,
then on the next business day after the date of such delivery, or (c) the date
on which such notice is actually received by such party (or, in the case of a
party that is not an individual, actually received by the individual designated
in the Notice Address of such party). For purposes of the preceding sentence, a
"business day" is any day other than a Saturday, Sunday or legal holiday at the
place where the Notice Address of the recipient is located.
15. Counterparts. This Pledge Agreement may be executed in any
number of counterparts, each of which where so executed and delivered shall be
an original, but all of which shall constitute one and the same instrument. It
shall not be necessary in making proof of this Pledge Agreement to produce or
account for more than one such counterpart.
16. Headings. The headings of the sections and subsections hereof
are provided for convenience only and shall not in any way affect the meaning or
construction of any provision of this Pledge Agreement.
17. Governing Law. This Pledge Agreement and the rights and
obligations of the parties hereunder shall be governed by, and construed and
interpreted in accordance with, the law of the state of North Carolina.
18. Waiver of Jury Trial. TO THE EXTENT PERMITTED BY APPLICABLE
LAW, PFM, XXXXXXXXXX, THE PLEDGEE AND THE AGENT HEREBY WAIVE ANY RIGHT TO A
TRIAL BY JURY IN ANY ACTION OR PROCEEDING ARISING OUT OF THIS PLEDGE AGREEMENT,
THE NOTE OR ANY OTHER AGREEMENTS OR TRANSACTIONS RELATED HERETO OR THERETO.
19. Severability. If any provision of any of the Pledge Agreement
is determined to be illegal, invalid or unenforceable, such provision shall be
fully severable and the remaining provisions shall remain in full force and
effect and shall be construed without giving effect to the illegal, invalid or
unenforceable provisions.
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20. Amendment and Restatement. This Pledge Agreement amends and
restates, and thereby supersedes, the Original Pledge Agreement, but provides
for the same pledge and security interest in the same collateral to secure the
same obligations that were provided for under the Original Pledge Agreement. In
the event that the transfer of the Pledged Shares by Xxxxxxxxxx to PFM shall for
any reason be rescinded or determined to be invalid, ineffective, void or
voidable, such rescission, invalidity, ineffectiveness, avoidance, or
voidability shall not impair the continuing pledge of and security interest in
the Pledged Collateral originally granted by Xxxxxxxxxx pursuant to the Original
Pledge Agreement, as amended and restated hereby, or impair the continuing
perfection or priority thereof.
21. Survival. All representations and warranties of the Pledgor
hereunder shall survive the execution and delivery of this Pledge Agreement.
22. Other Security. To the extent that any of the Pledgor
Obligations are now or hereafter secured by property other than the Pledged
Collateral (including, without limitation, assignments of life insurance), then
the Pledgee shall have the right to proceed against such other property, upon
the occurrence of any Event of Default, and the Pledgee have the right, in his
sole discretion, to determine which rights, security, liens, security interests
or remedies the Pledgee shall at any time pursue, relinquish subordinate, modify
or take with respect thereto, without in any way modifying or affecting any of
them or any of the Pledgee's rights or the Pledgor Obligations under this Pledge
Agreement or under the Note.
23. Joint and Several Obligations of Pledgors. The Pledgor and
Xxxxxxxxxx jointly and severally hereby irrevocably and unconditionally accepts,
not merely as a surety but also as a co-debtor, joint and several liability with
respect to the payment and performance of all of the Pledgor Obligations arising
under this Pledge Agreement and the Note, it being the intention of the parties
hereto that all the Pledgor Obligations shall be the joint and several
obligations of the Pledgor and Xxxxxxxxxx without preferences or distinction
among them.
24. Irrevocable Authorization and Instruction to Issuers. Each of
PFM and Xxxxxxxxxx hereby authorizes and instructs Pierre Foods, its successors
and assigns, to comply with any instruction received by it from the Agent or the
Pledgee in writing that (a) states that an Event of Default has occurred and is
continuing and (b) is otherwise in accordance with the terms of this Pledge
Agreement, without any other or further instructions from PFM or Xxxxxxxxxx, and
the PFM and Xxxxxxxxxx agree that Pierre Foods, its successor and assigns, shall
be fully protected in so complying.
25. Note Modification. All reference in the Note to the Pledge
Agreement shall mean this Pledge Agreement, and the Note is modified
accordingly.
26. Acceptance by Agent. By his execution hereof, the Agent
accepts his appointment as the Agent hereunder, and undertakes to serve as such
in accordance with the terms of this Pledge Agreement, subject to all of the
rights, limitations and immunities of the Agent provided for herein.
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IN WITNESS WHEREOF, each of the parties hereto has caused this Pledge
Agreement to be duly executed and delivered effective as of the date first above
written.
PF MANAGEMENT, INC.
[CORPORATE SEAL]
Attest:
By: /s/ Xxxxx X. Xxxxx
---------------------------------
/s/ Xxxxx X. Xxxxx Xxxxx X. Xxxxx
---------------------------- President
Xxxxx X. Xxxxx, Secretary
/s/ Xxxxx X. Xxxxxxxxxx, Xx.
-------------------------------(SEAL)
Xxxxx X. Xxxxxxxxxx, Xx.
/s/ Xxxxxxx X. Xxxxxx, Xx.
-------------------------------(SEAL)
Xxxxxxx X. Xxxxxx, Xx.
/s/ T. Xxxxxxx Xxxxxx
-------------------------------
T. Xxxxxxx Xxxxxx, Agent
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EXHIBIT A
PLEDGED SHARES
Certificate No. No./Shares
--------------- ----------
16
