Exhibit 4.2
LOAN AGREEMENT
among
WLR FOODS, INC.,
FIRST UNION NATIONAL BANK OF VIRGINIA,
XXXXXXX FOODS, INC.
and
CASSCO ICE & COLD STORAGE, INC.
Dated as of January 1, 1997
TABLE OF CONTENTS
Page
Recitals
ARTICLE I
Definitions and Rules of Construction
Section 1.1 Definitions . . . . . . . . . . . . . . . -1-
Section 1.2 Rules of Construction . . . . . . . . . . -3-
ARTICLE II
Representations
Section 2.1 Representations by Obligors . . . . . . . -3-
ARTICLE III
Acceptance of Repayment Obligation
Section 3.1 Acquisition by Bank . . . . . . . . . . . -4-
Section 3.2 Conditions Precedent to Loan . . . . . . -5-
Section 3.3 Existing Agreement . . . . . . . . . . . -5-
ARTICLE IV
Loan
Section 4.1 Loan . . . . . . . . . . . . . . . . . . -6-
Section 4.2 Advances . . . . . . . . . . . . . . . . -6-
Section 4.3 Note . . . . . . . . . . . . . . . . . . -6-
ARTICLE V
Payments
Section 5.1 Amounts Payable . . . . . . . . . . . . . -6-
Section 5.2 Default in Payments . . . . . . . . . . . -7-
Section 5.3 Unconditional Obligations . . . . . . . . -7-
Section 5.4 Repayment Obligation . . . . . . . . . . -8-
ARTICLE VI
Special Covenants
Section 6.1 Incorporation of Credit Agreement . . . . -9-
Section 6.2 Indemnification . . . . . . . . . . . . . -9-
Section 6.3 Certificate as to No Default . . . . . -10-
ARTICLE VII
Guaranty
Section 7.1 Guaranty of Obligations . . . . . . . . -11-
Section 7.2 Waivers . . . . . . . . . . . . . . . . -11-
Section 7.3 Forbearance and Modifications . . . . . -11-
Section 7.4 Continuing Liability . . . . . . . . . -11-
Section 7.5 Subrogation . . . . . . . . . . . . . . -12-
Section 7.6 Subordination . . . . . . . . . . . . . -12-
Section 7.7 Further Guaranties . . . . . . . . . . -13-
ARTICLE VIII
Events of Default and Remedies
Section 8.1 Event of Default . . . . . . . . . . . -13-
Section 8.2 Remedies on Default . . . . . . . . . . -13-
Section 8.3 No Remedy Exclusive . . . . . . . . . . -14-
Section 8.4 Counsel Fees and Other Expenses . . . . -14-
Section 8.5 No Additional Waiver Implied by One
Waiver . . . . . . . . . . . . . . . . -14-
ARTICLE IX
Miscellaneous
Section 9.1 Term of Agreement . . . . . . . . . . . -14-
Section 9.2 Successors and Assigns . . . . . . . . -15-
Section 9.3 Jurisdiction and Venue . . . . . . . . -15-
Section 9.4 Severability . . . . . . . . . . . . . -15-
Section 9.5 Applicable Law; Entire Understanding . -15-
Section 9.6 Counterparts . . . . . . . . . . . . . -15-
Section 9.7 Notices . . . . . . . . . . . . . . . . -15-
Section 9.8 Other Agreements . . . . . . . . . . . -16-
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THIS LOAN AGREEMENT, made as of the first day of January,
1997, among WLR FOODS, INC., a Virginia corporation (the
"Borrower"), FIRST UNION NATIONAL BANK OF VIRGINIA, a national
banking association, (the "Bank"), and XXXXXXX FOODS, INC, a
Virginia corporation, and CASSCO ICE & COLD STORAGE, INC., a
Virginia corporation (collectively, the "Guarantors");
WITNESSETH:
WHEREAS, the Bank intends to make a loan, as hereinafter
described, to the Borrower; and
WHEREAS, the Bank, the Borrower and the Guarantors desire to
set forth the terms and conditions with respect to such
financing;
NOW, THEREFORE, the parties hereto agree as follows:
ARTICLE I
Definitions and Rules of Construction
Section 1.1 Definitions. In addition to other terms
defined elsewhere in this Agreement, the following terms shall
have the following meanings in this Agreement unless the context
otherwise requires:
"Account" shall mean the Borrower's checking account number
208-111-123-556-1 at the Bank.
"Advances" shall mean the advances of the proceeds of the
Loan made pursuant to Article IV.
"Agreement" shall mean this Loan Agreement, including any
amendments hereto.
"Applicable Margin" shall mean the Applicable Margin (as
defined in the Credit Agreement) for LIBOR Rate Loans, as
specified in the Credit Agreement.
"Bank" shall mean First Union National Bank of Virginia, as
the obligee of the Repayment Obligation, or any successor as such
obligee.
"Borrower" shall mean WLR Foods, Inc., a Virginia
corporation.
"Business Day" shall mean any a Business Day (as defined in
the Credit Agreement) with respect to LIBOR Rate Loans.
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"Closing Date" shall mean the date of the execution and
delivery of this Agreement.
"Credit Agreement" shall mean the Credit Agreement dated the
date hereof among the Bank as agent, the Borrower, the Guarantors
and the lenders referred to therein (including the Bank), as the
same may hereafter be modified or amended with the consent of the
Bank. If the Credit Agreement shall terminate, whether by its
terms or at the option of any person, the term "Credit Agreement"
shall be deemed to refer to the Credit Agreement as in effect
immediately prior to such termination.
"Event of Default" shall mean any of the events set forth in
Section 8.1.
"Guarantors" shall mean, collectively, Xxxxxxx Foods, Inc.
(which was formerly known as Xxxxxxx-Xxxxxxxx, Inc.) and Cassco
Ice & Cold Storage, Inc., both of which are Virginia
corporations.
"Guaranty" shall mean the guaranty by the Guarantors
provided for in Article VII.
"LIBOR" shall mean the LIBOR Rate (as defined in the Credit
Agreement) for a period of one month.
"LIBOR Rate Loans" shall mean LIBOR Rate Loans (as defined
in the Credit Agreement).
"Loan" shall mean a revolving loan in the maximum amount of
$10,000,000 made by the Bank to the Borrower as provided for in
this Agreement.
"Obligors" shall mean, collectively, the Borrower and the
Guarantors.
"Payment of the Loan" shall mean payment in full of the
Repayment Obligation and the making in full of all other Required
Payments due and payable at the time of such payment.
"Prime Rate" shall mean the rate of interest established by
First Union National Bank of Virginia from time to time as its
prime rate, with the effective date of any change in the Prime
Rate being the effective date of the applicable change in the
prime rate so established. The Prime Rate is not the lowest or
most favorable rate of interest charged by First Union National
Bank to its customers.
"Repayment Obligation" shall mean the Borrower's obligation
to repay the Loan, together with interest thereon, as provided in
Article V.
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"Required Payment" shall mean any payment of money required
under the terms of this Agreement to be made by the Obligors.
"Security" shall mean any funds, agreements, property,
rights or interests of any nature whatsoever, guaranties of and
any subordination and/or standby agreements related to the
Obligations (as defined in Section 7.1) which have been or
hereafter are mortgaged, pledged, assigned, transferred, executed
or delivered, directly or indirectly, to the Bank as security for
or guaranty of the payment or performance of any Obligation.
"Termination Date" shall mean March 31, 1998, or such later
date as may have been agreed to in writing by the Bank.
Section 1.2 Rules of Construction. The following rules
shall apply to the construction of this Agreement unless the
context otherwise requires:
(a) Words importing the singular number shall include
the plural number and vice versa, and any gender shall connote
any other gender.
(b) All references herein to particular articles or
sections are references to articles or sections of this Agreement
unless otherwise indicated.
(c) The headings and Table of Contents herein are
solely for convenience of reference and shall not constitute a
part of this Agreement, nor shall they affect its meaning,
construction or effect.
(d) Words importing the prepayment or calling for
prepayment of the Repayment Obligation shall not be deemed to
refer to or connote the payment of the Repayment Obligation at
its stated maturity.
ARTICLE II
Representations
Section 2.1 Representations by Obligors. Each Obligor
makes the following representations as the basis for its
undertakings hereunder:
(a) Such Obligor is a stock corporation duly organized
under the laws of Virginia and is in good standing therein, has
the power and authority to enter into this Agreement and the
transactions contemplated thereby and to perform its obligations
hereunder, and by proper corporate action has duly authorized the
execution and delivery of this Agreement.
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(b) The execution and delivery of, and compliance by
such Obligor with the terms and conditions of, this Agreement
will not constitute or result in a default under or violation of
(i) such Obligor's articles of incorporation or bylaws, (ii) any
agreement or other instrument to which such Obligor is a party or
by which it or its property is bound, or (iii) any constitutional
or statutory provision or order, rule, regulation, decree or
ordinance of any court, government or governmental authority
having jurisdiction over such Obligor or its property.
(c) Such Obligor has obtained all consents, approvals,
authorizations and orders of any governmental or regulatory
authority that are required to be obtained by such Obligor as a
condition precedent to the execution and delivery of this
Agreement or the performance by such Obligor of its obligations
hereunder.
(d) No Event of Default has occurred and is
continuing, and no event has occurred and is continuing which,
with notice or lapse of time or both, would constitute an Event
of Default.
ARTICLE III
Acceptance of Repayment Obligation
Section 3.1 Acquisition by Bank. The Bank represents
that it is acquiring the Repayment Obligation for its own account
for investment and has no present intention of reselling or
disposing of the Repayment Obligation or engaging in any
"distribution" thereof (as that term is used in the Securities
Act of 1933, as amended, and the regulations of the Securities
and Exchange Commission thereunder). The Bank represents that it
is familiar with the operations and financial condition of the
Obligors based upon information furnished to the Bank by the
Obligors and has made such inquiries as it deems appropriate in
connection with the acquisition of the Repayment Obligation.
The Bank shall not assign or offer any portion of the
Repayment Obligation, or any participation therein, for sale in
any state of the United States without first (a) either (i)
taking all necessary action to qualify such portion for offer and
sale under the securities and "Blue Sky" laws of the United
States and such state or (ii) determining that no such action is
necessary because of a registration exemption or exemptions, and
(b) providing to the purchaser of such portion, or any
participant therein, all material information in the Bank's
possession necessary to evaluate the risks and merits of the
investment represented by the purchase of or participation in
such portion.
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The Obligors represent that neither this Agreement nor any
information (financial or otherwise) furnished by or on behalf of
the Obligors in connection with the negotiation or the making of
the Loan contains any untrue statement of a material fact or
omits (when considered together with all information furnished) a
material fact necessary to make the statements contained therein,
in the light of the circumstances in which they were made, not
misleading. There is no fact that the Obligors have not
disclosed in writing to the Bank that materially affects
adversely or, so far as the Obligors can now foresee, based on
facts known to them, will have a material adverse effect on the
properties, business, profits or condition (financial or
otherwise) of any Obligor or the ability of any Obligor to
perform its obligations hereunder.
Section 3.2 Conditions Precedent to Loan. The Bank shall
be required to make the Loan only upon delivery to it, in form
and substance satisfactory to it, of the following:
(a) An executed copy of this Agreement.
(b) Evidence of the due authorization, execution and
delivery of this Agreement by the parties thereto.
(c) Certified copies of (i) the resolutions of the
Obligors' boards of directors authorizing execution and delivery
of this Agreement, (ii) the articles of incorporation of each
Obligor, and (iii) the bylaws of each Obligor.
(d) An opinion of counsel for the Obligors.
(e) Such other documentation, certificates and
opinions as may be reasonably required by the Bank.
Section 3.3 Existing Agreement. On and after the Closing
Date, the Loan Agreement dated as of March 1, 1995 among the
Borrower, the Bank and the Guarantors, as modified by a
Modification Agreement dated as of April 1, 1996 (the "Existing
Agreement") shall be interpreted as though the Closing Date were
the Termination Date (as defined in the Existing Agreement).
Thus, no more advances shall be made to the Borrower under the
Existing Agreement after the Closing Date, and the Borrower shall
pay to the Bank on the Closing Date the principal amount of the
Repayment Obligation (as defined in the Existing Agreement),
together with all interest then accrued.
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ARTICLE IV
Loan
Section 4.1 Loan. The Bank shall make the Loan by making
Advances to the Borrower in such amounts as may be requested from
time to time by the Borrower; provided that no Advance shall be
made which would cause the outstanding principal amount of the
Repayment Obligation to exceed $10,000,000. The Loan shall be a
revolving loan, and the Borrower may reborrow principal amounts
of the Repayment Obligation which have previously been paid,
subject to the limitation set forth in the preceding sentence.
Section 4.2 Advances. An Advance shall be made by one or
more checks or wire transfers paid to the Borrower; provided that
the Bank may elect to make any Advance by crediting the Account
with the amount of the Advance.
The Bank shall not be required to make any requested Advance
until the Bank shall have received all of the items specified in
Section 3.2, even if the Bank shall have made any earlier Advance
without having received all of such items. The Bank also shall
not be required to make any requested Advance at any time that an
event has occurred and is continuing which constitutes or, with
notice or lapse of time or both, would constitute an Event of
Default. As a condition to the making of any Advance, the Bank
may require satisfactory evidence or representations as to the
absence of such an event.
No Advance shall be made after the Termination Date.
Section 4.3 Note. Upon the request of the Bank, the
Borrower shall execute and deliver to the Bank a promissory note,
satisfactory to the Bank, to evidence the Borrower's obligation
to make the principal and interest payments provided for in
Section 5.4; provided that the Borrower shall be required to make
such payments regardless of whether such a promissory note shall
have been so executed and delivered. Any amount at any time paid
to the holder of such promissory note as a payment of principal
of or interest on such promissory note shall be credited against
the Borrower's obligations hereunder (but subject to collection
of any instrument, draft, check or order for payment received by
such holder).
ARTICLE V
Payments
Section 5.1 Amounts Payable. (a) The Borrower shall make
all payments of the Repayment Obligation, as and when the same
become due (whether at maturity, by acceleration or otherwise),
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in the manner set forth herein and shall make all other Required
Payments in the manner set forth in this Agreement. Payments to
the Bank shall be made in lawful money of the United States of
America at the address of the Bank set forth in Section 9.7 or at
such other place as the Bank may direct in writing.
(b) The Borrower shall pay (i) the reasonable fees and
expenses of the Bank and counsel to the Bank and all other costs,
fees and expenses incidental to the financing hereunder and the
costs of producing this Agreement, (ii) all taxes of any kind
whatsoever lawfully assessed, levied or imposed with respect to
the transactions contemplated by this Agreement, and (iii) all
costs of collection (including reasonable counsel fees) in the
event of a default in the payment of the principal of or interest
on the Repayment Obligation or other charges payable under this
Agreement. The obligations of the Borrower under this subsection
shall survive Payment of the Loan.
Section 5.2 Default in Payments. If the Borrower should
fail to make any Required Payment of principal of and/or interest
on the Repayment Obligation by the date which is seven days after
the due date for such Required Payment, the Borrower shall pay
the Bank a late charge in an amount equal to the lesser of (a) 5%
of the amount of such Required Payment or (b) $200. If the
Borrower should fail to make any other Required Payment when due,
the Borrower shall, to the extent permitted by law, pay interest
thereon at the Prime Rate plus 0.5%.
Section 5.3 Unconditional Obligations. The obligations
of the Obligors to make Required Payments and to perform and
observe all other covenants, conditions and agreements hereunder
shall be general obligations of the Obligors and shall be
absolute and unconditional, irrespective of any defense or any
rights of setoff, recoupment or counterclaim any Obligor might
otherwise have against the Bank. Nothing in this section shall
be construed as a waiver by the Obligors of any rights or claims
any of them may have against the Bank under this Agreement or
otherwise, but any recovery upon such rights and claims shall be
had from the Bank separately. The Obligors shall not suspend or
discontinue any such payment hereunder or fail to observe and
perform any of their other covenants, conditions and agreements
under this Agreement for any cause, including without limitation
any acts or circumstances that may constitute failure of
consideration, or commercial frustration of purpose, or any
change in the tax or other laws of the United States of America,
the Commonwealth of Virginia or any political subdivision of
either, or any failure of the Bank to observe and perform any
covenant, condition or agreement, whether express or implied, or
any duty, liability or obligation contained in or arising out of
or in connection with this Agreement.
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Section 5.4 Repayment Obligation. The principal amount
of the Repayment Obligation at any time shall be equal to the
aggregate Advances theretofore made less any principal amount of
the Repayment Obligation which shall theretofore have been paid
to the Bank by the Borrower. Interest shall be payable on the
principal amount of the Repayment Obligation at a variable rate
per annum equal to LIBOR plus the Applicable Margin. For
purposes of this Agreement, (a) LIBOR as in effect on the first
Business Day of a month shall be deemed to be in effect for the
entirety of such month, and (b) the Applicable Margin as in
effect on the first Business Day of a month shall be deemed to be
in effect for the entirety of such month.
Any payment by the Borrower with respect to the Repayment
Obligation shall be applied first to the payment of interest then
accrued on the Repayment Obligation and then to the payment of
the principal amount of the Repayment Obligation.
The principal amount of the Repayment Obligation, together
with all interest then accrued, shall be due and payable in full
on the Termination Date.
The Repayment Obligation is subject to prepayment in whole
or in part, without prior notice, on any Business Day by payment
of the principal amount thereof to be prepaid, together with all
interest then accrued.
Interest on the Repayment Obligation shall be payable on the
first day of each month, beginning on the first day of the month
following the month in which the Closing Date occurs.
Unless otherwise agreed by the Borrower and the Bank, the
Bank shall debit the Account for the amount of any payment of
principal of or interest on the Repayment Obligation; provided
that the Borrower shall make any such payment to the extent that
the balance in the Account is insufficient therefor.
Notwithstanding the foregoing, so long as that certain Sweep Plus
Agreement to which the Bank and the Borrower are parties (the
"Sweep Plus Agreement") is in effect, such payment shall be made
in the manner provided in the Sweep Plus Agreement to the extent
(i) the Sweep Plus Agreement provides for such payment and (ii)
the assets available for such payment pursuant to the Sweep Plus
Agreement are sufficient to make such payment in a timely
fashion.
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ARTICLE VI
Special Covenants
Section 6.1 Incorporation of Credit Agreement. Each of
the covenants set forth in Articles VIII through X, inclusive, of
the Credit Agreement other than Section 10.10 thereof (the
"Covenants") are incorporated herein by reference, and the Bank
may enforce the Covenants in the same manner as through they were
set forth in full herein. If Article VI of the Credit Agreement
shall require that any notice or other writing be delivered to
the Agent or any Lender (both as defined in the Credit
Agreement), such notice or writing, or a copy thereof, shall be
delivered to the Bank at the same time that it is required to be
delivered to the Agent or such Lender. Notwithstanding the fact
that the Borrower shall not be required to comply with a Covenant
by reason of a consent or waiver by the Agent and/or one or more
of the Lenders, the Borrower shall nevertheless comply with such
Covenant for the benefit of the Bank unless such compliance shall
have been waived by the Bank. If the Credit Agreement or the
Borrower's obligations thereunder shall have terminated, the
Covenants and Article VI of the Credit Agreement shall be deemed
to have continued in effect for the benefit of the Bank.
Section 6.2 Indemnification. (a) The Borrower shall
protect, indemnify and save harmless the Bank and any person who
"controls" (within the meaning of Section 15 of the Securities
Act of 1933, as amended, or Section 20(a) of the Securities
Exchange Act of 1934, as amended) the Bank (collectively, the
"Indemnified Parties") from and against all liabilities,
obligations, claims, damages, penalties, causes of action, costs
and expenses (including, without limitation, attorneys' fees and
expenses and settlement amounts) imposed upon or incurred by or
asserted against any Indemnified Party on account of or related
to (i) any failure of the Obligors to comply with any of the
terms, warranties, covenants or representations set forth in this
Agreement, or (ii) any loss or damage to property or any injury
to or death of any person that may be occasioned by any cause
whatsoever pertaining to any property of the Obligors or the use
thereof; provided that such indemnity shall be effective only to
the extent of any loss that may be sustained by an Indemnified
Party in excess of the proceeds received by it from any insurance
carried with respect to such loss; and provided further that
benefits of this section shall not inure to any person other than
the Indemnified Parties. Nothing contained herein shall require
the Borrower to indemnify any Indemnified Party for any claim or
liability resulting from such Indemnified Party's negligence or
willful, wrongful acts.
(b) The Borrower shall also indemnify and hold harmless the
Indemnified Parties against any and all losses, claims, damages
or liabilities caused by any untrue statement or alleged untrue
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statement of a material fact contained in information submitted
by any Obligor to the Bank with respect to the making of the Loan
or caused by any omission or alleged omission of any material
fact necessary to be stated therein in order to make such
statements to such Bank not misleading or incomplete.
(c) If any action is brought against any Indemnified Party
in respect of which indemnity may be sought from the Borrower
under subsection (a) or (b) above, such Indemnified Party shall
promptly notify the Borrower in writing, and the Borrower shall
assume the defense thereof, including the employment of counsel,
the payment of all expenses and the right to negotiate and
consent to settlement. Each Indemnified Party has the right to
employ separate counsel in any such action and to participate in
the defense thereof, but the fees and expenses of such counsel
will be at the expense of such Indemnified Party unless the
employment of such counsel has been specifically authorized by
the Borrower. The Borrower will not be liable for any settlement
of any such action made without its consent, but if such action
is settled with the consent of the Borrower or if there be a
final judgment for the plaintiff in such action, the Borrower
shall indemnify and hold harmless the Indemnified Parties from
and against any loss or liability by reason of such settlement or
judgment.
(d) The obligations of the Borrower under this section
shall survive Payment of the Loan. All references in this
section to any Indemnified Party shall include its directors,
officers, employees and agents.
Section 6.3 Certificate as to No Default. The Borrower
shall deliver to the Bank concurrently with the delivery of each
of the annual financial statements of the Borrower provided for
in Section 7.1(b) of the Credit Agreement a certificate signed by
the president, a vice president or the treasurer of the Borrower
stating that, during the period covered by such financial
statements and as of the date of such certificate, no event or
condition has occurred or existed, or is occurring or existing,
that constitutes or that, with notice or lapse of time or both,
would constitute an Event of Default, or if such an event or
condition has occurred or existed, or is occurring or existing,
specifying the nature and period of such event or condition and
what action the Obligors have taken, are taking or propose to
take with respect thereto. Each Obligor shall promptly notify
the Bank at any time such Obligor becomes aware of any event or
condition described in the preceding sentence.
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ARTICLE VII
Guaranty
Section 7.1 Guaranty of Obligations. The Guarantors
hereby jointly and severally guarantee to the Bank, the prompt
payment, when due, of all obligations of the Borrower under this
Agreement (the "Obligations") and agree that upon default by the
Borrower in the payment when due of any Obligation, the
Guarantors will promptly pay the same. The guaranty obligation
of the Guarantors contained in this section shall be a
continuing, absolute and unconditional guaranty. The foregoing
is a guaranty of payment, and not of collection.
Section 7.2 Waivers. (a) The Guarantors hereby waive
notice of the creation, incurrence or extension of any
Obligations now existing or hereafter arising.
(b) The Guarantors hereby waive protest, all demands and
all notices including, but not limited to, any notices in
connection with, related to or associated with, whether by law or
agreement, (i) the failure (whether partial or otherwise) by the
Borrower or by any other person to timely, properly or otherwise
pay or perform any Obligation or (ii) the creation, preservation,
perfection or enforcement or lack thereof, or any failure by any
person in respect thereof, regarding any Security.
Section 7.3 Forbearance and Modifications. The
Guarantors hereby agree that, without further notice or consent,
the same hereby being waived, and without affecting the
Guarantors' liabilities hereunder, the Bank may at any time, in
the exercise of its sole discretion, take or refrain from taking
any lawful action, including without limitation changing any
terms of all or any part of any Obligations, granting any
extensions, modifications or renewals of any Obligations,
effecting any releases, compromises or settlements or making any
other indulgences with respect to any Obligations, entering into
any agreement concerning the use of any or all of the Security or
changing the terms of any agreement concerning any or all of the
Security, consenting to the substitution, exchange or release of
all or any part of the Security or any person liable to the Bank
with respect thereto, realizing upon all or any part of the
Security in any lawful manner, or forbearing from realizing upon
all or any part of the Security.
Section 7.4 Continuing Liability. (a) The Guarantors
shall not be released from any obligations or liability under and
shall not have any rights or recourse against the Bank, for any
reason relating to (i) any default with respect to any Security
existing when the Security is accepted by the Bank or at any time
thereafter, (ii) any failure to convey, create or perfect a valid
lien or security interest in any Security, (iii) any invalidity
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or defect in any Security, (iv) the existence of any equities,
defenses or claims in favor of others with respect to any
Security, (v) failure to correctly estimate the value of any
Security or the change in value of any Security, (vi) any
deterioration, waste or loss to any Security, and/or (vii) any
rights and consents granted, waivers made or other actions taken
or not taken by the Bank hereunder. THE GUARANTORS HEREBY WAIVE
ALL SURETYSHIP AND OTHER SIMILAR DEFENSES, INCLUDING BUT NOT
LIMITED TO THE RIGHT TO REQUIRE THE BANK TO PROCEED TO ENFORCE
THE OBLIGATIONS AGAINST ANY PERSON BEFORE OR CONTEMPORANEOUSLY
WITH THE ENFORCEMENT OF THIS GUARANTY.
(b) The Guarantors' obligations and liabilities under the
Guaranty shall not be in any way affected or terminated if any
other person liable, primarily or secondarily, directly or
indirectly, for all or any part of any Obligations shall cease to
exist, dissolve, wind up its business, suspend business, make any
assignment for the benefit of creditors generally, become
insolvent or admit in writing its insolvency, generally not pay
its debts as they become due, or become a debtor in a bankruptcy
case or if a receiver, trustee or custodian is appointed for such
other person's property or is authorized to take charge of any of
its property to enforce a lien or security interest against it or
for purposes of general administration for the benefit of its
creditors, or if such other person should petition or apply to
any tribunal for any receiver for or any trustee of it or its
estate or for relief under any bankruptcy, arrangement,
reorganization, readjustment of debt, receivership, dissolution
or liquidation proceedings or under any law relating to the
relief of debtors, or have any such action commenced against it,
with or without its consent.
Section 7.5 Subrogation. The Guarantors shall not assert
any right of subrogation with respect to the Obligations or any
Security prior to Payment of the Loan. No subrogation of the
Guarantors shall require the Bank to proceed against any person
or entity or to resort to any Security or to take any other
action of any kind as a result of subrogation.
Section 7.6 Subordination. The Guarantors hereby (a)
subordinate to the Obligations any present and future debts,
obligations or liabilities, whether contingent or otherwise, of
the Borrower to any Guarantor, alone or with any other person,
(b) subordinate any liens or security interests, whether now
existing or hereafter arising, securing payment of such debts,
obligations or liabilities, and (c) agree that no Guarantor shall
ask for, demand, xxx for, take or receive any part of such debts,
obligations and liabilities while payment of any of the
Obligations is in default. If any payment is made to any
Guarantor on account of such debts, obligations or liabilities in
violation of the terms hereof, such Guarantor shall forthwith pay
all such amounts to the Bank to be credited and applied, in the
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Bank's sole discretion, to the Obligations then outstanding,
whether matured or unmatured, contingent or otherwise.
Section 7.7 Further Guaranties. Any subsequent guaranty
to or for the benefit of the Bank by any person, including any
Guarantor, shall not supersede or terminate the Guaranty, but
shall be an additional guaranty unless otherwise stated therein.
If any Guarantor has given a previous guaranty to the Bank, the
Guaranty shall be in addition to such previous guaranty.
ARTICLE VIII
Events of Default and Remedies
Section 8.1 Event of Default. Each of the following
shall be an Event of Default:
(a) Failure of the Borrower to make any payment of
principal of or interest on the Repayment Obligations when due
and the continuation of such failure for five days.
(b) Failure of any Obligor to observe or perform any
of its other covenants, conditions or agreements hereunder for a
period of 60 days after notice (unless the Borrower and the Bank
shall agree in writing to an extension of such time prior to its
expiration) specifying such failure and requesting that it be
remedied, given by the Bank to the Borrower, or in the case of
any such default that can be cured but cannot with due diligence
be cured within such 60-day period, failure of such Obligor to
proceed promptly to cure the same and thereafter prosecute the
curing of the same with due diligence.
(c) Reasonable determination by the Bank that any
warranty, representation or other statement by or on behalf of
any Obligor contained in this Agreement or any financial
statement or other information furnished in connection with the
making of the Loan was false or misleading in any material
respect at the time it was made or delivered.
(d) An Event of Default, as defined in the Credit
Agreement.
Section 8.2 Remedies on Default. Upon the occurrence and
continuation of an Event of Default, the Bank may:
(a) Declare all payments hereunder to be due and
payable on a date which is not earlier than 30 days after notice
of such declaration is given to the Borrower by the Bank,
whereupon the same shall become due and payable on such date.
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(b) Take whatever action at law or in equity may
appear necessary or desirable to collect the amounts then due and
thereafter to become due hereunder or to enforce observance or
performance of any covenant, condition or agreement of the
Obligors under this Agreement.
The Bank shall give notice to the Borrower of the exercise
of any of the rights or remedies under this section (i) in
writing in the manner provided in Section 9.7 and (ii) by
telephone or telegram, provided that failure to give such notice
by telephone or telegram shall not affect the validity of the
exercise of any right or remedy under this section.
Any balance of the moneys collected pursuant to action taken
under this section remaining after payment of all costs and
expenses of collection and amounts due hereunder shall be paid to
the Bank and applied toward the making of Required Payments then
due and payable, provided that after Payment of the Loan and
payment of all other sums required by applicable law any such
balance shall be paid to the Borrower.
Section 8.3 No Remedy Exclusive. No remedy herein
conferred upon or reserved to the Bank is intended to be
exclusive of any other remedy, and every remedy shall be
cumulative and in addition to every other remedy herein or now or
hereafter existing at law, in equity or by statute. No delay or
failure to exercise any right or power accruing upon an Event of
Default shall impair any such right or power or shall be
construed to be a waiver thereof, and any such right or power may
be exercised from time to time and as often as may be deemed
expedient.
Section 8.4 Counsel Fees and Other Expenses. The
Borrower shall on demand pay to the Bank the reasonable counsel
fees and other reasonable expenses incurred by the Bank in the
collection of payments hereunder or the enforcement of any other
obligation of the Borrower upon an Event of Default.
Section 8.5 No Additional Waiver Implied by One Waiver.
If any party or its assignee waives a default by any other party
under any covenant, condition or agreement herein, such waiver
shall be limited to the particular breach so waived and shall not
be deemed to waive any other breach hereunder.
ARTICLE IX
Miscellaneous
Section 9.1 Term of Agreement. This Agreement shall be
effective upon execution and delivery hereof. Subject to earlier
satisfaction upon prepayment of all of the Borrower's obligations
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hereunder and the making in full of all other Required Payments
due and payable at the date of such prepayment (but only if the
Borrower shall have agreed that it shall not be entitled to
receive any further Advances), and subject to any provisions
hereof which survive Payment of the Loan, the Obligors'
obligations hereunder shall expire on the date provided herein
for the final payment of principal on the Repayment Obligation,
or if all Required Payments have not been made on such date, when
all Required Payments shall have been made.
Section 9.2 Successors and Assigns. This Agreement shall
be binding upon, inure to the benefit of and be enforceable by
the parties hereto and their respective successors and assigns.
No assignment by any Obligor shall relieve such Obligor of its
obligations hereunder.
Section 9.3 Jurisdiction and Venue. Any judicial
proceeding to enforce performance of any obligation of any
Obligor under this Agreement may be brought before any court of
competent jurisdiction located in Harrisonburg, Virginia or in
Roanoke, Virginia or in the United States District Court for the
Western District of Virginia. If any such proceeding is brought
before any such court, no Obligor shall assert any defense
relating to the jurisdiction of such court or the venue of such
proceedings. The Obligors agree that service of process with
respect to any such proceeding may be made upon any employee or
officer of any Obligor who may be located in the Commonwealth of
Virginia at the time such service and that any such service shall
be deemed to be valid service upon any Obligor named as a party
in such proceeding.
Section 9.4 Severability. If any provision of this
Agreement shall be held invalid by any court of competent
jurisdiction, such holding shall not invalidate any other
provision hereof.
Section 9.5 Applicable Law; Entire Understanding. This
Agreement shall be governed by the applicable laws of the
Commonwealth of Virginia. This Agreement expresses the entire
understanding and all agreements between the parties and may not
be modified except in a writing signed by the parties. This
Agreement may not be modified before Payment of the Loan without
the consent of the Bank.
Section 9.6 Counterparts. This Agreement may be executed
in several counterparts, each of which shall be an original, and
all of which together shall constitute but one and the same
instrument.
Section 9.7 Notices. Except as may otherwise be provided
herein, all demands, notices, approvals, consents, requests and
other communications hereunder shall be in writing and shall be
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delivered or given by certified mail, postage prepaid, addressed
as follows:
(a) If to the Borrower, at:
For U.S. Mail: For Courier or Other Delivery:
X.X. Xxx 0000 000 Xx-xx Xxxxx
Xxxxxxxx, XX 00000-0000 Xxxxxxxxxxx, Xxxxxxxx 00000
Attn: Chief Financial Attn: Chief Financial
Officer Officer;
(b) If to either Guarantor, at:
For U.S. Mail: For Courier or Other Delivery:
c/o WLR Foods, Inc. c/o WLR Foods, Inc.
X.X. Xxx 0000 000 Xx-xx Xxxxx
Xxxxxxxx, XX 00000-0000 Xxxxxxxxxxx, Xxxxxxxx 00000
Attn: Chief Financial Attn: Chief Financial
Officer Officer; and
(c) If to the Bank, at:
First Union National Bank of Virginia
000 Xxxxx Xxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attn: Commercial Banking
Any Obligor and the Bank may, by notice given hereunder,
designate any further or different addresses to which subsequent
demands, notices, approvals, consents, requests and other
communications shall be sent or persons to whose attention the
same shall be directed.
Section 9.8 Other Agreements. To the extent that the
execution and delivery of this Agreement by any Obligor or the
performance of its obligations thereunder, would constitute a
violation of or default under any other agreement to which the
Bank and such Obligor are parties, such other agreement is hereby
amended (to the extent such amendment can be effected without the
consent of persons who are not parties to this Agreement) to
permit such execution and delivery or such performance, as the
case may be, and any default under such agreement resulting from
such execution and delivery or such performance is hereby waived.
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IN WITNESS WHEREOF, the Bank and the Obligors have caused
this Agreement to be executed in their respective names, all as
of the date first above written.
FIRST UNION NATIONAL BANK OF
VIRGINIA
By_/s/ Stewart H. Marley___________
Its___Senior Vice President___
WLR FOODS, INC.
By_/s/ Xxxxxx X. Ritter_________
Its___Treasurer_______________
XXXXXXX FOODS, INC.
By___/s/ Xxxxxx X. Ritter__________
Its______Treasurer____________
CASSCO ICE & COLD STORAGE, INC.
By__/s/ Xxxxxx X. Xxxxxxxx-Xxxxxxxxxx
Its__Assistant Treasurer______
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