EXHIBIT 10.20
ASSIGNMENT AND
ASSUMPTION AND SUBORDINATION AGREEMENT
THIS ASSUMPTION AGREEMENT (the "AGREEMENT") is made this 8th day of
March, 2004 by and between PIERRE FOODS, INC., a North Carolina corporation (the
"ASSIGNEE"), and PF MANAGEMENT, INC., a North Carolina corporation (the
"ASSIGNOR"). Capitalized Terms not expressly defined herein shall have the
meaning ascribed to them in the Indenture (as such term is defined below).
W I T N E S S E T H :
WHEREAS, on June 9, 1998, the Assignee issued that certain debt
evidenced by those certain 10--3/4% Senior Notes Due 2006 (hereafter, together
with any and all renewals, extensions, substitutions, modifications and
consolidations of the indebtedness, sometimes referred to as the "SENIOR
NOTES");
WHEREAS, the Assignee has certain obligations to the holders of the
Senior Notes (the "SENIOR NOTEHOLDERS") under that certain Indenture dated as of
June 9, 1998 among Assignee, each of several subsidiaries of Assignee as
Guarantors and State Street Bank and Trust Company ("SSBT"), as supplemented by
a First Supplemental Indenture dated as of September 5, 1998 among Assignee,
Pierre Leasing, LLC, a North Carolina limited liability company, as Additional
Guarantor, and SSBT as trustee, a Second Supplemental Indenture dated as of
February 26, 1999 among Assignee, Fresh Foods Restaurant Group, LLC, a Delaware
limited liability company as Additional Guarantor, and SSBT as trustee, a Third
Supplemental Indenture dated as of October 8, 1999 among Assignee and SSBT as
trustee, and, as supplemented and amended by a Fourth Supplemental Indenture
dated as of March 8, 2004, among Assignee, Fresh Foods Properties, LLC and U.S.
Bank, N.A. as trustee (the "INDENTURE TRUSTEE") as successor to SSBT (the
"FOURTH SUPPLEMENTAL INDENTURE"), providing for, inter alia, the issuance of the
Senior Notes due 2006 (as so supplemented and amended, together with any and all
renewals, extensions, substitutions, modifications and consolidations, referred
to collectively as the "INDENTURE");
WHEREAS, Assignor, Assignee and Fleet Capital Corporation, a Rhode
Island Corporation (together with its successors and assigns, including any
other lender or lenders refinancing or refunding all or any portion of the
indebtedness owing to Fleet, "Fleet") are parties to a certain Loan and Security
Agreement, dated as of August 13, 2003 (as amended and modified from time to
time, together with any and all renewals, extensions, substitutions, and
consolidations, referred to collectively as the "FLEET LOAN AGREEMENT"),
pursuant to which Fleet has agreed to make loans and extend credit to Assignee;
WHEREAS, Assignor and the holders listed on EXHIBIT A hereto (the
"HOLDERS") have entered into certain agreements and obligations (the
"Subordinated Obligation Documents), pursuant to which the Holders have loaned
or advanced to Assignor certain sums of money, pursuant to which Assignor has
certain obligations to the Holders (the "SUBORDINATED
OBLIGATIONS"), all as more fully set forth therein;
WHEREAS, on the date hereof, Assignor has agreed to assign all of its
right, title and interest in and to the Subordinated Obligation Documents and
the Subordinated Obligations to Assignee, and Assignee has agreed to assume such
Subordinated Obligation Documents and the Subordinated Obligations and pay the
Subordinated Obligations, subject to the subordination provisions contained in
the Subordination Agreements (as hereinafter defined);
WHEREAS, in consideration of such assignment of the Subordinated
Obligation Documents and the Subordinated Obligations to Assignee and the
assumption by Assignee of the Subordinated Obligation Documents and the
Subordinated Obligations, which results in certain benefits to the Holders, each
Holder has agreed to subordinate the payment of the Subordinated Obligation
owing to such Holder to the prior payment in full of certain indebtedness of
Assignee; and
WHEREAS, each Holder has consented to the assignment of its respective
Subordinated Obligation Documents and the Subordinated Obligations by Assignor
to Assignee, and the assumption of such Subordinated Obligation Documents and
the Subordinated Obligations by Assignee, pursuant to the terms of a Consent to
Assignment and Assumption and Subordination Agreement (the "SUBORDINATION
AGREEMENT," and collectively the "SUBORDINATION AGREEMENTS"), substantially in
the form attached hereto as EXHIBIT B;
NOW, THEREFORE, with reference to the above recitals, and for good and
valuable consideration, the receipt and adequacy of which are hereby
acknowledged:
1. Assignor hereby sells, conveys, assigns, transfers and delivers to
Assignee all of its right, title and interest in and to the liabilities and
obligations listed on Exhibit A attached hereto (the "ASSUMED LIABILITIES") and
Assignee hereby accepts such assignment and hereby assumes and agrees to pay,
perform and discharge when due, subject to the Subordination Agreements, the
Assumed Liabilities, and shall indemnify and hold harmless Assignor for all
costs, damages, claims and liabilities of Assignor (including without limitation
reasonable attorneys fees and court costs) incurred with respect to the Assumed
Liabilities.
2. Assignor and Assignee each, for itself and its successors and
assigns, covenants and agrees that it will do, execute, acknowledge and deliver
or cause to be done, executed, acknowledged and delivered any and all such
further acts, instruments, papers and documents, and will give such further
assurances, as may be necessary, proper or convenient to carry out and
effectuate the intent of this Assignment and Assumption Agreement and the
Subordination Agreements.
3. Assignee and Assignor hereby consent, acknowledge and agree that the
payment of the Assumed Liabilities shall be subordinated to the Senior Debt (as
such term is defined in the Subordination Agreements), and all other
indebtedness of the Assignee not expressly subordinated to the Assumed
Liabilities or declared to be pari passu with the Assumed Liabilities, all upon
the terms and conditions set forth in the Subordination Agreements duly executed
by the Holders of each of the Assumed Liabilities. Assignor and Assignee hereby
consent, acknowledge and agree that the terms and provisions of each
Subordination Agreement with each Holder listed on EXHIBIT A are incorporated
herein by reference as if fully set forth herein and as if each of Assignor and
Assignee were parties signatory thereto, and the Assumed
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Liabilities shall be subject to repayment only in accordance with and subject to
the terms and conditions of the Subordination Agreements.
4. Assignee and Assignor hereby consent, acknowledge and agree that
Fleet, the Indenture Trustee and the Senior Noteholders, shall be deemed and
recognized as intended third party beneficiaries under this Agreement and the
Subordination Agreements, with rights to enforce the terms and provisions of
this Agreement and the Subordination Agreements against Assignor, Assignee and
the Holders. The Senior Noteholders shall have the unrestricted right at any
time or from time to time, and without Assignor's, Assignee's or any Holder's
consent, to assign and transfer the Senior Notes and to assign and transfer
their rights hereunder and under the Subordination Agreements to one or more
persons. Fleet shall have the unrestricted right at any time or from time to
time, and without Assignor's, Assignee's or any Holder's consent, to assign and
transfer the Fleet Loan Agreement and the indebtedness owing to Fleet thereunder
and to assign and transfer its rights hereunder and under the Subordination
Agreements to one or more persons. The Senior Noteholders and their respective
successors and assigns, acting by and through the Indenture Trustee, and Fleet
shall each have the right to enforce all of the terms and provisions of this
Agreement and the Subordination Agreements against Assignor, Assignee and the
Holders.
5. This Agreement, the Subordination Agreements and any documents and
instruments delivered in connection herewith and therewith, and the rights and
duties of Assignor, Assignee and the Holders hereunder and thereunder shall be
governed by, and construed and interpreted in accordance with, the internal laws
of the State of North Carolina, without regard to principles of conflicts of
law. Each of Assignor and Assignee hereby submits to the exclusive jurisdiction
of the state and Federal courts located in the State of North Carolina.
6. This Agreement and the Subordination Agreements shall be binding
upon Assignor, Assignee and each Holder and shall inure to the benefit of
Assignor, Assignee, Fleet, the Indenture Trustee, the Senior Noteholders, and
their respective representatives, administrators, successors and assigns.
7. This Agreement and the Subordination Agreements cannot be amended,
modified or terminated without the prior written consent of Fleet and the
Indenture Trustee.
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IN WITNESS WHEREOF, the parties, intending legally to be bound, have
caused this Assumption Agreement to be duly executed as of the day and year
first hereinabove written.
ASSIGNOR:
PF MANAGEMENT, INC., a North Carolina
corporation
By: /S/ Xxxxx X. Xxxxx
-------------------------------
Name: Xxxxx X. Xxxxx
Its: President
ASSIGNEE:
PIERRE FOODS, INC., a North Carolina
corporation
By: /S/ Xxxxxx X. Xxxxxxx
-------------------------------
Name: Xxxxxx X. Xxxxxxx
Its: Chief Financial Officer,
Treasurer and Secretary
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EXHIBIT A
Bank of Granite
Xxxxx Family Limited Partnership
Branch Banking and Trust Co
Carolina First Bank
Xxxxxx, Xxxxxxx
First Century Bank
Xxxxxxxx, Xxx
Hash, Xxxxx
Xxxx, Xxxxx
Xxxxxx, Xxxxx
Xxxxxxxxx, Xxxxx
Xxxxxx, Xxxx & Xxxxx
Xxxxxx, Xxxxxx
Xxxxxx, Xxxx
Xxxxxx, Xxxx
Xxxx, Xxxxx X.
Xxxx, Xxxxx X.
Xxxxxx, Xxxx
Xxxxxx, Xxxx
Peoples Bank
Pierre Foods, Inc.
Xxxxx, Xxxxx
S&D Land Company
Xxxxxxx, Xxxx
S&D Land Company
S&D Land Company (Peoples Bank)
Xxxxxxx, Xxxx
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EXHIBIT B
CONSENT TO ASSIGNMENT AND ASSUMPTION
AND
SUBORDINATION AGREEMENT
This Consent to Assignment and Assumption and Subordination Agreement
(this "AGREEMENT") is made effective as of the 8th day of March, 2004 by
________________(the "HOLDER"), with its [principal place of business] at the
address set below such Holder's signature.
R E C I T A L S
WHEREAS, on March 8, 2004, PF Management, Inc., a North Carolina
corporation (the "COMPANY"), and the Holder entered into a
_____________[describe loan agreement, notes, or other debt instruments, etc.]
(the "Subordinated Obligation Documents"), a true, accurate and complete copy of
which is attached hereto as EXHIBIT A, pursuant to which the Holder loaned or
advanced to the Company the sum OF $________ with a final repayment date of ___
[maturity date], (the "SUBORDINATED OBLIGATION");
WHEREAS, on the date hereof, the Company has assigned all of its right,
title and interest in and to the Subordinated Obligation Documents and the
Subordinated Obligation to Pierre Foods, Inc., a North Carolina corporation
("PIERRE"), and Pierre has agreed to assume such Subordinated Obligation
Documents and the Subordinated Obligation and pay the Subordinated Obligation,
subject to the subordination provisions herein contained, pursuant to an
Assignment and Assumption and Subordination Agreement dated the date hereof (the
"ASSIGNMENT AND ASSUMPTION AGREEMENT"), a copy of which is attached hereto as
EXHIBIT B;
WHEREAS, the Holder's consent is required in order for the Company to
assign the Subordinated Obligation Documents and the Subordinated Obligation and
Pierre to assume such Subordinated Obligation Documents and the Subordinated
Obligation pursuant to the Assignment and Assumption Agreement; and
WHEREAS, in consideration of such assignment of the Subordinated
Obligation Documents and the Subordinated Obligation to Pierre and the
assumption by Pierre of the Subordinated Obligation Documents and the
Subordinated Obligation, which results in certain benefits to the Holder, the
Holder has agreed to subordinate the payment of the Subordinated Obligation to
the prior payment in full of certain indebtedness of Pierre;
NOW, THEREFORE, with reference to the above recitals thereon, and for
good and valuable consideration, the receipt and adequacy of which are hereby
acknowledged:
1. Consent; Release of the Company. Subject to the terms and conditions
of this Agreement, the Holder hereby subordinates all claims arising out of the
Subordinated Obligations to the Senior Debt and consents to the assignment of
the Subordinated Obligation Documents and the Subordinated Obligation by the
Company to Pierre, and the assumption of the Subordinated Obligation Documents
and the Subordinated Obligation by Pierre pursuant to the Assignment and
Assumption Agreement, which is incorporated by reference herein. The Holder
hereby unconditionally and irrevocably settles, terminates, acquits and fully
and forever
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releases and discharges the Company from all past, present or future
obligations, claims, counterclaims, setoffs, demands, proceedings, causes of
action, debts, damages and liabilities whatsoever relating to the Subordinated
Obligation Documents and the Subordinated Obligation.
2. Subordination. The Holder hereby consents, acknowledges and agrees
that the Subordinated Obligation shall be subordinated in right and time of
payment and performance to the prior payment and performance of any and all
Senior Debt upon the terms set forth herein.
(a) The following terms shall have the following meanings for the
purposes of this Agreement:
(i) "FLEET" shall mean Fleet Capital Corporation, a Rhode
Island corporation, its successors and assigns, and any other lender or
lenders refinancing or refunding all or any portion of the Senior Debt
owing to Fleet under the Fleet Loan Agreement..
(ii) "FLEET LOAN AGREEMENT" shall mean the Loan and Security
Agreement, dated August 13, 2003, among the Company, Pierre and Fleet,
as amended, modified, restated or supplemented from time to time, and
the loan agreement with any other lender or lenders refinancing or
refunding all or any portion of the Senior Debt owing to Fleet under
the Fleet Loan Agreement.
(iii) "INDENTURE" shall mean that certain Indenture dated as
of June 9, 1998 among Pierre, each of several subsidiaries of Pierre as
Guarantors and State Street Bank and Trust Company ("SSBT"), as
supplemented by a First Supplemental Indenture dated as of September 5,
1998, a Second Supplemental Indenture dated as of February 26, 1999, a
Third Supplemental Indenture dated as of October 8, 1999 and, as
supplemented and amended by a Fourth Supplemental Indenture dated as of
____ 2004.
iv) "INDENTURE TRUSTEE" shall mean U.S. Bank, National
Association, as successor trustee to SSBT.
(v) "PROCEEDING" shall mean any voluntary or involuntary
insolvency, bankruptcy, receivership, custodianship, liquidation,
dissolution, reorganization, assignment for the benefit of creditors,
sale of assets, appointment of a custodian, receiver, trustee or other
officer with similar powers or any other proceeding for the liquidation,
dissolution or other winding up of Pierre.
(vi) "SENIOR DEBT" shall mean each of the following:
(1) all present and future indebtedness (whether
principal, prepayment, interest (including, without
limitation, interest accruing after the commencing of a
Proceeding by or against Pierre at a rate per annum equal to
the applicable default rate, if any, for such Senior Debt,
regardless of whether such interest is an allowance claim in
such Proceeding), fees, collection costs, expenses,
liabilities, obligations (including, without limitation,
obligations owing to Fleet or any of its affiliates arising
from or in connection with letters of credit, hedging, swap or
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other interest rate protection agreements, cash management and
other banking products), and other amounts now or hereafter
owed by Pierre or any of its subsidiaries to Fleet arising
under, pursuant to, or in connection with, the Fleet Loan
Agreement; all complete or partial refinancing of the
foregoing indebtedness owing to Fleet; and any amendments,
modifications, renewals or extensions of any of the foregoing;
(2) all present and future indebtedness (whether
principal, prepayment, interest (including, without
limitation, interest accruing after the commencing of a
Proceeding by or against Pierre at a rate per annum equal to
the applicable default rate, if any, for such Senior Debt,
regardless of whether such interest is an allowable claim in
such Proceeding), fees, collection costs, expenses,
liabilities, obligations, and other amounts now or hereafter
owed by Pierre or any of its subsidiaries under, pursuant to,
or in connection with, the Senior Notes; all complete or
partial refinancings of the Senior Notes; and any amendments,
modifications, renewals or extensions of any of the foregoing,
including without limitation the Indenture and the Senior
Notes; and
(3) all other borrowings of Pierre or any of its
subsidiaries not expressly subordinated to the Subordinated
Obligation or declared to be pari passu therewith.
(vi) "SENIOR NOTES" shall mean the 10--3/4% Senior Notes
issued by Pierre under the Indenture.
(vii) "SENIOR NOTEHOLDERS" shall mean the holders of the
Senior Notes.
(b) The obligations of Pierre and the Holder arising hereunder, shall
not be affected, modified or impaired in any manner or to any extent by: (i) any
amendment, modification or termination of or supplement to the Senior Debt, or
any agreement, instrument or document executed or delivered pursuant thereto;
(ii) any renewal or extension of the time for payment of all or any part of the
Senior Debt, (iii) any increase or reduction in the amount of the Senior Debt;
(iv) the acceptance of any collateral security for any of the Senior Debt, (v)
the release, sale, exchange or surrender, in whole or in part, of any collateral
security, now or hereafter existing, for any of the Senior Debt or any other
indebtedness, liability or obligation of Pierre to Fleet, the Indenture Trustee
or the Senior Noteholders; (vi) the release of any party primarily or
secondarily obligated on the Senior Debt; (vii) any exercise or nonexercise of
any right, power or remedy under or in respect of the Senior Debt or any of such
instruments and documents referred to in clause (i) above or arising at law; or
(viii) any waiver, consent, release, indulgence, extension, renewal,
modification, delay or other action, inaction or omission in respect of the
Senior Debt or any of the agreements, instruments or documents referred to in
clause (i) above or in respect of any collateral security for the Senior Debt or
any other indebtedness, liability or obligation of Pierre to Fleet, the
Indenture Trustee or the Senior Noteholders, now existing or hereafter arising,
all whether or not the Holder shall have had notice or knowledge of any of the
foregoing and whether or not it shall have consented thereto.
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(c) Until the Senior Debt shall have been paid in full, neither the
Company nor Pierre shall make, and the Holder shall not receive, accept or
retain any direct or indirect payment or reduction (whether by way of loan,
set-off or otherwise) in respect of the Subordinated Obligation, whether such
Subordinated Obligation shall have become payable on the maturity date, by
acceleration or otherwise. Provided, notwithstanding the foregoing, before the
occurrence of a default in the payment or performance of any of the Senior Debt,
the Subordinated Obligation shall be repaid only in accordance with the payment
and amortization schedule attached hereto as SCHEDULE 1.
(d) During the existence of a default in the payment or performance of
any of the Senior Debt, and for so long as such default continues, the Holder
will not demand or accept and Pierre will not pay all or any part of the
principal of, interest on, or any other amounts owing in respect of, the
Subordinated Obligation and to the extent that any such payment is made to a
Holder, such payment shall be held in trust by the Holder for the holders of the
Senior Debt.
(e) In the event of any Proceeding:
(i) All of the Senior Debt shall be paid in full before any
payment or distribution of any character, whether in cash, securities,
obligations or other property, shall be made in respect of the
Subordinated Obligation.
(ii) Any payment or distribution of any character, whether in
cash, securities, obligations or other property, which would otherwise
(but for the subordination terms here) be payable or deliverable in
respect of the Subordinated Obligation shall be payable pro rata to the
holders of the Senior Debt until all Senior Debt has been paid in full,
and the Holder or any other holder of Subordinated Obligation,
irrevocably authorizes, empowers and directs all receivers, trustees
and others having authority in the premises to effect all such payments
and deliveries. Each holder of Senior Debt is authorized (but is not
required) to execute and file any and all proofs of claim in the name
of, and on behalf of, the Holder and to receive any such dividends or
payments.
(g) This Agreement shall continue in full force and effect and shall be
irrevocable by the Holder until all of the Senior Debt is paid in full and all
outstanding commitments of any holder of Senior Debt for the incurring of
additional Senior Debt are terminated in writing.
(h) All of the Senior Debt shall be deemed to have been made or
incurred in reliance upon this Agreement, and the Holder expressly waives all
notice of acceptance by each holder of Senior Debt of the subordination and
other provisions of this Agreement, notice of the incurring of any Senior Debt
from time to time and all other notices not specifically required pursuant to
the terms of this Agreement or by applicable law, and reliance by each holder of
Senior Debt upon the subordination and other agreements as herein provided.
3. Third Party Beneficiaries. Holder agrees that Fleet, the Indenture
Trustee and the Senior Noteholders shall be deemed and recognized as intended
third party beneficiaries under this Agreement, with rights to enforce the terms
and provisions of this Agreement against the Holder. The Senior Noteholders
shall have the unrestricted right at any time or from time to time,
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and without the Holder's consent, to assign and transfer the Senior Notes and to
assign and transfer their rights hereunder to one or more persons. Fleet shall
have the unrestricted right at any time or from time to time, and without the
Holder's consent, to assign and transfer the Fleet Loan Agreement and the Senior
Debt owing to Fleet thereunder and to assign and transfer its rights hereunder
to one or more persons. The Senior Noteholders and their respective successors
and assigns, acting by and through the Indenture Trustee, and Fleet and its
successors and assign shall each have the right to enforce all of the terms and
provisions of this Agreement against the Holder.
4. Release of Guarantor. The Holder hereby unconditionally and
irrevocably settles, terminates, acquits, and fully and forever releases and
discharges ("Guarantor") from all past, present or future obligations, claims,
counterclaims, setoffs, demands, proceedings, causes of action, debts, damages
and liabilities whatsoever relating to the Subordinated Obligation by reason of
that certain Guaranty Agreement by and between the Holder and Guarantor dated
___________.
5. Legend on Subordinated Obligation Documents. The Company, Pierre and
the Holder shall, simultaneously with the execution and delivery hereof, cause a
conspicuous legend to be placed on each of the Subordinated Obligation Documents
to the following effect:
"THIS [NOTE, LOAN AGREEMENT] AND THE INDEBTEDNESS AND OBLIGATIONS
EVIDENCED HEREBY IS SUBORDINATED, IN THE MANNER AND TO THE EXTENT SET FORTH IN A
CONSENT TO ASSIGNMENT AND ASSUMPTION AND SUBORDINATION AGREEMENT DATED AS OF
MARCH 8, 2004 (THE "SUBORDINATION AGREEMENT"), BY AND AMONG THE HOLDER HEREOF,
PF MANAGEMENT, INC., AND PIERRE FOODS, INC., IN FAVOR OF FLEET CAPITAL
CORPORATION AND U.S. BANK NATIONAL ASSOCIATION, AS TRUSTEE, TO ALL SENIOR DEBT
(AS DEFINED IN THE SUBORDINATION AGREEMENT), AND EACH HOLDER HEREOF, BY ITS
ACCEPTANCE HEREOF, SHALL BE BOUND BY THE SUBORDINATION AGREEMENT. THIS [NOTE,
LOAN AGREEMENT] AND THE INDEBTEDNESS AND OBLIGATIONS EVIDENCED HEREBY MAY NOT BE
TRANSFERRED OR ASSIGNED OR PLEDGED OR OTHERWISE ENCUMBERED UNTIL THE SENIOR DEBT
HAS BEEN PAID IN FULL."
6. Miscellaneous.
(a) This Agreement and any documents and instruments delivered in
connection herewith and the rights and duties of Pierre, the Company and the
Holder hereunder and thereunder shall be governed by, and construed and
interpreted in accordance with, the internal laws of the State of North
Carolina, without regard to principles of conflicts of law. Each of Pierre, the
Company and Holder and hereby submits to the exclusive jurisdiction of the state
and Federal courts located in or having jurisdiction for matters arising in the
County of Catawba, State of North Carolina.
(b) This Agreement shall be binding upon Pierre, the Company and the
Holder and inure to the benefit of Pierre, Company, the Guarantor, if any Fleet,
the Indenture
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Trustee, the Senior Noteholders, and their respective representatives,
administrators, successors and assigns.
(c) This Agreement cannot be amended, modified or terminated without
the prior written consent of Fleet and the Indenture Trustee.
(d) If any term or provision of this Agreement shall, to any extent or
for any reason, be held to be invalid or unenforceable, the remainder of this
Agreement shall not be affected thereby and shall be construed as if such
invalid or unenforceable provision had never been contained herein or been
applicable in such circumstances.
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IN WITNESS WHEREOF, the undersigned have caused this Agreement to be
duly executed as of the date first above written.
HOLDER:
_______________________________________
By:____________________________________
Print Name:____________________________
Its:___________________________________
Address of Principal Place of Business:
_______________________________________
=======================================
Acknowledge and Agree the date and year
first above written:
PF MANAGEMENT, INC.
By: ___________________________________
Xxxxx X. Xxxxx, President
PIERRE FOODS, INC.
By: ___________________________________
Xxxxxx X. Xxxxxxx,
Chief Financial Officer,
Treasurer and Secretary
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