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XXXXXXX X
XXXXX XXXXXXXXXX AGREEMENT
THIS AGREEMENT, dated as of January 15, 1997, is made by and among WLR
FOODS, INC., a Virginia corporation (WLR), CUDDY FARMS, INC., a North Carolina
corporation (Cuddy), COOPERATIEVE CENTRALE RAIFFEISEN-BOERENLEENBANK B.A.,
"Rabobank Nederland", New York Branch (Rabobank), THE PRUDENTIAL INSURANCE
COMPANY OF AMERICA (Prudential) (Rabobank and Prudential collectively are
referred to herein as "the Banks"), and CRESTAR BANK, as Trustee (the Trustee).
RECITALS:
A. Pursuant to an Asset Purchase Agreement dated July 27, 1994,
WLR issued 1,774,999 shares of its common stock (adjusted for splits) to Cuddy.
Under the terms of a Voting Trust Agreement dated August 29, 1994, the
1,774,999 shares of WLR common stock were issued to the Trustee, who in turn
issued to Cuddy voting trust certificates representing such shares. The shares
issued pursuant to the Asset Purchase Agreement shall be referred to herein as
the "Shares" and the voting trust certificates representing such Shares shall
be referred to herein as the "Voting Trust Certificates".
B. WLR and Cuddy entered into a Registration Rights Agreement
dated August 29, 1994. The Shares have not been registered with the United
States Securities and Exchange Commission.
C. The parties hereto entered into a Put and Call Agreement dated
August 29, 1994, in which WLR agreed to be bound by certain "put" provisions
and the Banks agreed to be bound by certain "call" provisions as described
therein.
X. Xxxxx entered into certain pledge agreements dated August 29,
1994 with the Banks by which it granted first priority security interests to
Rabobank and second priority security interests to Prudential in the Shares and
Voting Trust Certificates for the purpose of securing the payment and
performance of Cuddy under respective loan agreements with the Banks.
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X. Xxxxx has agreed to sell and WLR has agreed to purchase the
Shares, and the Banks have agreed to release their respective security
interests in the Shares and the Voting Trust Certificates, all upon the terms
and conditions set forth herein.
NOW, THEREFORE, in consideration of the premises and the covenants and
conditions hereinafter set forth, the parties covenant and agree as follows:
1. Redemption of Cuddy Shares.
1.1 Transaction. Cuddy agrees to convey, and WLR agrees
to acquire, the Shares at a price of ten dollars ($10.00) per share. Cuddy and
WLR have agreed to the following closing schedule: WLR shall purchase and Cuddy
shall convey 887,499 Shares on January 17, 1997; WLR shall purchase and Cuddy
shall convey 443,750 Shares on March 31, 1997; the balance of the Shares shall
be purchased by WLR and conveyed by Cuddy on June 30, 1997. All closings shall
take place at 10:00 a.m. at the office of WLR's legal counsel or such other
time and place mutually agreed upon by the parties. All such dates are referred
to herein as "the Closing". Payment for the Shares transferred shall be paid at
each Closing by certified or bank cashier's check or other current funds
acceptable to Rabobank, provided however at the January 17, 1997 Closing, Nine
Hundred Thousand Dollars ($900,000), of the payment due on such date shall be
paid to Prudential by wire transfer of immediately available federal funds and
the Seven Million Nine Hundred Seventy-Four Thousand Nine Hundred Ninety Dollar
($7,974,990) balance shall be paid to Rabobank by wire transfer of immediately
available federal funds.
1.2 Release of Security Interests. Concurrently with
WLR's payment of the purchase price of the Shares on each of the respective
Closing Dates set forth above, (i) Rabobank shall surrender to the Trustee,
Voting Trust Certificates representing the number of Shares to be purchased by
WLR on such date, and (ii) the Banks shall each release and terminate their
respective security interests and other liens in the Shares and related Voting
Trust Certificates to be purchased by WLR on such date and execute and deliver
any and all lien release documents as necessary to terminate all UCC financing
statements recorded by the Banks, with respect to such liens. Immediately upon
surrender of the Voting Trust Certificates at the Trustee's offices, Trustee
shall deliver to WLR certificates for the number of shares of WLR stock
represented by the surrendered
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Voting Trust Certificates. Upon WLR's receipt of such share certificates, WLR
shall deliver to the Trustee, certificates for the remaining number of Shares,
if any, owned by Cuddy. Upon the Trustee's receipt of such share certificates,
the Trustee and Cuddy shall execute and deliver to Rabobank, new Voting Trust
Certificates representing the remaining Shares, if any.
2. Representations and Warranties of Cuddy. Cuddy represents and
warrants to WLR on the date hereof (which representations and warranties shall
be certified true at and as of the Closing) as follows:
2.1 Due Incorporation. Cuddy is a corporation duly
organized, validly existing and in good standing under the laws of the State of
North Carolina, the state of its incorporation.
2.2 Corporate Power of Cuddy. Cuddy has the full
corporate power and authority to enter into this Agreement and to consummate
the transactions contemplated hereby. Neither the execution and delivery of
this Agreement nor the consummation of the transactions herein contemplated
will violate any provision of the Articles of Incorporation or Bylaws of Cuddy.
The execution and delivery of this Agreement by Cuddy and the consummation of
the transactions contemplated hereby have been duly and validly authorized by
all necessary corporate action on the part of Cuddy. This Agreement is the
valid and binding obligation of Cuddy enforceable according to its terms.
2.3 Options. Cuddy is not a party to, or bound by any
option, warrant, call or other agreement relating to the sale or disposition of
any of the Shares, except as referenced in the Recitals of this Agreement.
2.4 No Breach. The consummation of the transactions
herein contemplated including, but not limited to, the execution, delivery and
consummation of this Agreement and the documents required to effect the
transactions herein contemplated do not (a) constitute a violation of or
default under, conflict with or result in a breach of (i) any terms of any
mortgage, indenture, bond, lease, instrument, contract or other agreement to
which Cuddy is or may be bound or constitute a default thereunder (either
immediately or upon notice, lapse of time or both), except as referenced in the
Recitals of this Agreement, (ii) any judgment, order, award, decree of any
court, administrative agency or governmental body, or (iii) any Federal, state
or local
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statute, law, ordinance, rule or regulation; or (b) result in the creation or
imposition of any lien or other encumbrance on the Shares or give to any person
other than WLR any interest or right in the Shares.
2.5 Title to Shares. Except for the encumbrances
referenced in the Recitals of this Agreement, Cuddy owns, free and clear of any
lien or other encumbrance, and shall have full power and authority to convey
free and clear of any lien or other encumbrance, the Shares and, upon delivery
of and payment for the Shares as herein provided, WLR will acquire good and
valid title thereto, free and clear of any lien or other encumbrance.
3. Representations and Warranties of WLR. WLR represents and
warrants to Cuddy on the date hereof (which representations and warranties
shall be true at and as of the date of Closing) as follows:
3.1 Due Incorporation. WLR is a corporation duly
organized, validly existing and in good standing under the laws of the
Commonwealth of Virginia, the state of its incorporation.
3.2 Corporate Power of WLR. WLR has the full corporate
power and authority to enter into this Agreement and to consummate the
transactions contemplated hereby. Neither the execution and delivery of this
Agreement nor the consummation of the transactions herein contemplated will
violate any agreement to which WLR is a party or by which WLR is bound or any
provision of the Articles of Incorporation or Bylaws of WLR. The execution and
delivery of this Agreement by WLR and the consummation of the transactions
contemplated hereby have been duly and validly authorized by all necessary
corporate action on the part of WLR. This Agreement is the valid and binding
obligation of WLR enforceable according to its terms.
4. Closing Requirements for Cuddy. At each Closing, Cuddy shall
take any and all steps necessary to ensure delivery to WLR of the stock
certificates representing the Shares, duly endorsed, in blank or with duly
executed stock powers attached, in proper form for transfer with all signatures
guaranteed, at the expense of Cuddy.
5. Closing Requirements for WLR. At the first Closing, WLR shall
deliver to Cuddy a copy of the relevant excerpt from the minutes of the meeting
of the Board of Directors of WLR authorizing the execution and performance of
this Agreement and the transactions contemplated by this Agreement by WLR
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certified by the Secretary or Assistant Secretary of WLR. At each Closing, WLR
shall deliver to Cuddy, or its designee, cash payments as required by
subsection 1.1 of this Agreement.
6. Closing Conditions. Each Closing is conditioned upon the
fulfillment of the Closing requirements of Cuddy and WLR as set forth in
Sections 4 and 5 above.
In addition, WLR and Cuddy must be current in their payments
to each other and not in default with regard to the Turkey Poult Marketing
Agreement and the Feed Supply Agreement.
If either party fails to close due to the failure to comply
with the Closing conditions set forth herein, the nondefaulting party, in
addition to any other remedies available at law or in equity, may require
specific performance, and all reasonable attorney's fees incurred in enforcing
the contract shall be paid by the defaulting party.
7. Dividends. Prior to the conclusion of the transactions
contemplated by this agreement, the holder of each Voting Trust Certificate
shall be entitled to receive dividends paid by WLR, if any, on shares
represented by Voting Trust Certificates held by the Trustee as of the record
date, in the amount of such dividends.
8. Termination of Agreements: The Registration Rights Agreement,
the Voting Trust Agreement, and the Put and Call Agreement shall remain in full
force and effect, unless modified by the terms of this Agreement as to the
Shares not yet purchased by WLR, until the completion of the transactions
contemplated by this Agreement. Notwithstanding the above, however, the Banks
agree not to exercise their rights under the Put and Call Agreement unless WLR
breaches the terms of this Agreement and has not cured such breach within ten
(10) days notice of the breach.
9. Miscellaneous.
9.1 Publicity. Except as otherwise required by law, no
publicity release or announcement concerning this Agreement or the transactions
contemplated hereby shall be issued without advance approval of the form and
substance thereof by WLR .
9.2 Notices. Any notice or other communication required
or which may be given hereunder shall be in writing and either delivered
personally to the addressee, faxed to the addressee or mailed,
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certified or registered mail or express mail, postage prepaid, and shall be
deemed received when so delivered personally, or received via fax or if by
certified or registered mail, four days after the date of mailing, or if
express mailed, two days after the date of mailing as follows:
(a) if to Cuddy to:
Cuddy Farms, Inc.
P. O. Xxx 000
Xxxxxxxxxx, XX 00000-0000
Attn: Xxxxxxx X. Xxxxxxx
Fax No. 000-000-0000
With a required copy to:
J. Xxx Xxxxxxx, Esquire
Blake, Xxxxxxx & Xxxxxxx
Suite 2800, Box 00
Xxxxxxxx Xxxxx Xxxx
Xxxxxxx, Xxxxxx X0X 0X0
Fax No. 000-000-0000
and
Xxxxx X. Xxxxxxxx, Esquire
Hunton & Xxxxxxxx
One NationsBank Plaza
Suite 2650
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Fax No. 000-000-0000
(b) if to WLR, to:
WLR Foods, Inc.
P. O. Xxx 0000
Xxxxxxxx, XX 00000-0000
Attn: Xxxxx L, Keeler, President
(000) 000-0000 fax
With a required copy to:
Xxxx X. Xxxxx, Esquire
Xxxxxxx, Xxxxxxxx & Xxxxxx, P.L.C.
000 Xxxxx Xxxxx Xxxxxx
X. X. Xxx 00000
Xxxxxxxxxxxx, XX 00000-0000
(000) 000-0000 fax
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(c) if to Rabobank, to:
Rabobank Nederland
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Attn: Legal Dept.
Fax No. 000-000-0000
With a required copy to:
Rabobank Nederland
0 Xxxxxxx Xxxxxx
Xxxxx 0000
0000 X. Xxxxxxxxx Xxxxxx
Xxxxxxx, XX 00000-0000
Attn: Xxxxx Xxxx
Fax No. 000-000-0000
(d) if to Prudential, to:
The Prudential Insurance Company of America
000 Xxxxxxxxxxx Xxxx, Xxxxx 000 Xxxxx, XX
00000 Fax No. 000-000-0000
With a required copy to:
The Prudential Insurance Company of America
000 X. Xxxxxx Xxx., Xxxxx 000 Xxxxxxx, XX
00000 Fax No. 000-000-0000
(e) if to the Trustee (Crestar Bank)
Crestar Bank
Corporate Trust Administration
10th Floor
000 X. Xxxx Xxxxxx
Xxxxxxxx, XX 00000
Fax No. 000-000-0000
or to such other address or addresses as the parties may designate to the other
by notice as set forth above.
9.3 Entire Agreement. This Agreement, together with the
Registration Rights Agreement, Put and Call Agreement, and the Voting Trust
Agreement, contains the entire agreement among the parties with respect to the
repurchase of the Shares and related transactions and supersedes all prior
agreements, written or oral, with respect thereto.
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9.4 Binding Agreement. All of the terms and provisions of
this Agreement shall be binding upon, inure to the benefit of, and be
enforceable by, each of the parties hereto and their respective legal
representatives, successors and assigns.
9.5 Governing Law. This Agreement shall be governed and
construed according to the laws of the Commonwealth of Virginia applicable to
agreements made, delivered and performed entirely within Virginia.
9.6 Reformation and Severability. If any provision of
this Agreement shall be determined by a court of competent jurisdiction to be
invalid or unenforceable, then such provision shall be enforced to the maximum
extent permitted by law, and further, such determination shall not affect the
remaining provisions of this Agreement, all of which shall remain in full force
and effect.
9.7 Waiver. A waiver by any party of a breach of any
provisions of this Agreement shall not operate, nor be construed, as a waiver
of any subsequent breach hereof.
9.8 Counterparts. This Agreement may be executed in two
or more counterparts, each of which shall be deemed an original but all of
which together shall constitute one and the same instrument.
9.9 Headings. The headings in this Agreement are for
reference purposes only and shall not in any way affect the meaning or
interpretation of this Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
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WLR FOODS, INC.
By
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Xxxxx X. Xxxxxx, President
CUDDY FARMS, INC.
By
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Its
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COOPERATIEVE CENTRALE RAIFFEISEN-
BOERENLEENBANK B.A., "Rabobank
Nederland" New York Branch
By
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Its
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By
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Its
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THE PRUDENTIAL INSURANCE COMPANY OF
AMERICA
By
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Its
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CRESTAR BANK, as Trustee
By
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Its
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