Sanderson Farms, Inc. Guaranty Agreement
Exhibit
10.2
Xxxxxxxxx Farms, Inc.
Guaranty Agreement
Guaranty Agreement
Bank of Montreal
Chicago, Illinois
Chicago, Illinois
The Banks and L/C Issuers from time to time parties to the Credit Agreement (as hereinafter
defined)
Ladies and Gentlemen:
Reference is made to that certain Credit Agreement dated as of May 1, 2008 (such Credit
Agreement, as the same may be modified or amended from time to time, being hereinafter referred to
as the “Credit Agreement”) by and among Xxxxxxxxx Farms, Inc., a Mississippi corporation (the
“Company”), and Bank of Montreal, individually and in its capacity as agent thereunder (“BMO”), and
the lenders and letter of credit issuers from time to time parties thereto (all of said lenders
being referred to collectively as the “Banks” and individually as a “Bank”, and such letter of
credit issuers being referred to collectively as “L/C Issuers” and individually as an “L/C Issuer”;
and said BMO as agent for the Banks and L/C Issuers under the Credit Agreement being hereinafter
referred to in such capacity as the “Agent”; the Banks, the L/C Issuers and the Agent being
referred to collectively as the “Guaranteed Creditors” and individually as a “Guaranteed
Creditor”), pursuant to which said Banks agree to make available to the Company a Revolving Credit,
with all loans thereunder to be evidenced by the Revolving Notes of the Company and pursuant to
which BMO agrees to make available to the Company a Swingline with all loans thereunder to be
evidenced by the Swing Note of the Company (all such Revolving Notes and the Swing Note being
hereinafter referred to collectively as the “Notes” and individually as a “Note”). In addition the
Company may request the L/C Issuers to issue letters of credit for the Company’s account and the
other Banks will acquire risk participations in such letters of credit and all obligations of the
Company with request thereto (the “Reimbursement Obligations”). All of the Company’s indebtedness,
obligations and liabilities to the Guaranteed Creditors under the Credit Agreement and the other
Loan Documents, including, without limitation, all such indebtedness, obligations and liabilities
evidenced by the Notes and the Reimbursement Obligations, and all extensions or renewals of any of
the foregoing, are hereinafter collectively referred to as the “Indebtedness”. All defined terms
used herein shall have the meanings set forth in the Credit Agreement unless expressly defined
herein.
The undersigned are wholly-owned subsidiaries of the Company. As an inducement to each of you
to accept and enter into said Credit Agreement, and in consideration of credit extended and to be
extended by the Guaranteed Creditors to the Company under said Credit Agreement, the undersigned
(hereinafter collectively referred to as the “Guarantors”), acknowledging that the Guaranteed
Creditors have informed the Company that said credit would not be extended but for this guarantee,
hereby jointly and severally guarantee the full and prompt
payment to each Guaranteed Creditor at maturity (whether by acceleration, lapse of time or
otherwise) and at all times thereafter of principal of and interest on all Indebtedness of the
Company under the Credit Agreement, and all extensions or renewals of all or any part thereof and
all other indebtedness, liabilities and obligations of the Company to the Guaranteed Creditors
under the Credit Agreement. Notwithstanding anything in this Guaranty to the contrary, the right
of recovery against each Guarantor under this Guaranty shall not exceed $1.00 less than the lowest
amount which would render such Guarantor’s obligations under this Guaranty void or voidable under
applicable law, including fraudulent conveyance law.
The undersigned further jointly and severally acknowledge and agree with the Guaranteed
Creditors that this Guaranty and the undertaking of the Guarantors in connection therewith shall be
on and subject to the following terms and conditions:
1. This Guaranty of payment by the Guarantors shall be a continuing, absolute and
unconditional guaranty and shall remain in full force and effect until all Indebtedness of
the Company to the Guaranteed Creditors shall be fully paid and satisfied and all
commitments of the Guaranteed Creditors under the Credit Agreement to extend credit to or
for the account of the Company shall have terminated. The dissolution, liquidation or
insolvency (howsoever evidenced) of, or the institution of bankruptcy or receivership
proceedings against any one or more of the Guarantors or the Company shall not terminate
this Guaranty.
2. The obligations and liabilities of the Guarantors, or any of them, hereunder shall
not be affected or impaired by any irregularity, invalidity or unenforceability of or in any
of the Notes or of any agreement, instrument or other document evidencing or creating or
providing for the same.
3. The obligations and liabilities of the Guarantors, or any of them, hereunder shall
not be affected or impaired by (and the Guaranteed Creditors are hereby expressly authorized
to make from time to time without notice to the Guarantors) any sale, pledge, surrender,
compromise, settlement, release, renewal, extension, indulgence, amendment, alteration,
substitution, exchange, change in, modification or other disposition of any of the Credit
Agreement, the Notes, any other Loan Documents (as defined in the Credit Agreement), any
other guaranty thereof, or of any security or collateral therefor.
4. The obligations and liabilities of the Guarantors or any of them hereunder shall not
be affected or impaired by any acceptance by the Guaranteed Creditors, or any of them, of
any security or collateral for, or other guarantors upon any of the Indebtedness or by any
failure, neglect, omission, delay or partial action on the part of the Guaranteed Creditors,
or any of them, in the administration of the Indebtedness or to realize upon or protect any
of the Indebtedness or any security or collateral therefor, or to exercise any lien upon or
right of appropriation of any moneys, credits or property of the Company possessed by any of
the Guaranteed Creditors toward the liquidation of the Indebtedness or by any application of
payments or credits thereon or by any other circumstances whatsoever (with or without notice
to or the knowledge of the Guarantors,
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or any of them) which may in any manner or to any extent vary the risk of the Guarantors, or
any of them, hereunder or may otherwise constitute a legal or equitable discharge of a
surety or guarantor; it being the purpose and intent that this guaranty of payment and the
obligations and liability of the Guarantors hereunder shall be absolute and unconditional
under any and all circumstances and shall not be discharged except by payment and
performance as herein provided.
5. In order to hold the Guarantors, or any of them, liable hereunder, there shall be no
obligation on the part of any Guaranteed Creditor, at any time, to resort for payment to any
person directly liable in respect of the Indebtedness or to any other guaranty, or to any
other person, their properties or estates, or to resort to any collateral, security,
property, liens or other rights or remedies whatsoever, and the Guaranteed Creditors shall
have the right to enforce this guaranty of payment irrespective of whether or not other
proceedings or steps are pending seeking resort to or realization upon or from any of the
foregoing. The Guarantors jointly and severally agree to pay all reasonable out-of-pocket
expenses, including court costs and reasonable attorneys’ fees, paid or incurred by the
Guaranteed Creditors or any of them in endeavoring to collect on the Indebtedness or any
part thereof and in enforcing this Guaranty.
6. The granting of credit to the Company by any Guaranteed Creditor from time to time
in addition to the Indebtedness under the Credit Agreement without notice to the Guarantors,
or any of them, is hereby authorized and shall in no way affect or impair the obligations
and liability of the Guarantors, or any of them, hereunder.
7. The payment by any Guarantor of any amount or amounts under this guaranty of payment
shall not entitle it, either at law, in equity or otherwise, to any right, title or interest
(whether by way of subrogation or otherwise) in and to any of the Indebtedness, or in and to
any security or collateral therefor, or in or to any amounts at any time paid or payable
under or pursuant to any guaranty by any other person of all or part of Indebtedness, or in
and to any amounts theretofore, then or thereafter paid or applicable to the payment of the
Indebtedness, howsoever such payment or payments may arise, until all of the Indebtedness
has been fully paid and all obligations of the Guaranteed Creditors to extend credit to or
for the benefit of the Company shall have terminated or expired.
8. This Guaranty Agreement may be enforced by the Guaranteed Creditors acting jointly,
or it may be enforced by any Guaranteed Creditor acting alone or separately with respect to
the Indebtedness which it holds. Any Guaranteed Creditor may, without any notice to the
Guarantors, sell, assign or transfer, to the extent permitted in the Credit Agreement, the
Indebtedness held by it, or any part thereof, or grant participations therein; and in that
event, each and every immediate and successive assignee, transferee or holder of or
participant in all or any part of the Indebtedness shall, to the extent permitted in the
Credit Agreement, have the right to enforce this Guaranty, by suit or otherwise, for the
benefit of such assignee, transferee, holder or participant as fully as if such assignee,
transferee, holder or participant were herein by name specifically given such rights, powers
and benefits; but each Guaranteed Creditor shall
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have an unimpaired right to enforce this Guaranty Agreement for its own benefit or for the
benefit of any such participant as to so much of the Indebtedness that it has not sold,
assigned or transferred.
9. If any payment applied by any Guaranteed Creditor to any of the Indebtedness is
thereafter set aside, recovered, rescinded or required to be returned for any reason
(including, without limitation, the bankruptcy, insolvency or reorganization of the Company
or any other obligor), the Indebtedness to which such payment was applied shall for the
purposes of this Guaranty be deemed to have continued in existence, notwithstanding such
application, and this Guaranty shall be enforceable as to such of the Indebtedness as fully
as if such application had never been made.
10. This Guaranty Agreement shall be construed according to the internal laws of the
state of Illinois, in which State it shall be performed by the Guarantors. This Guaranty
Agreement and every part hereof shall be binding upon the Guarantors jointly and severally
and upon their respective legal representatives, successors and assigns of each and all of
the undersigned, and shall inure to the benefit of the Guaranteed Creditors and their
respective successors, legal representatives and assigns.
11. This writing is intended by the parties to be a complete and final expression of
this Guaranty Agreement and is also intended as a complete and exclusive statement of the
terms of that agreement. No course of dealing, course of performance or trade usage, and no
parole evidence of any nature, shall be used to supplement or modify any terms hereof, nor
are there any conditions to the full effectiveness of this Guaranty Agreement.
12. Each Guarantor and, by their acceptance of this Guaranty, each Guaranteed
Creditor hereby irrevocably waives any and all right to trial by jury in any legal
proceeding arising out of or relative to this Guaranty or the transactions contemplated
hereby.
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Dated as of this 1st day of May, 2008.
| Xxxxxxxxx Farms, Inc. (Foods Division) | |||||
Attest: |
|||||
| By | /s/ D. Xxxxxxx Xxxxxxxx | ||||
/s/ Xxxxx
X. Xxxxxx
|
Its | Treasurer & Chief Financial Officer | |||
| Xxxxxxxxx Farms, Inc. (Production Division) | |||||
Attest: |
|||||
| By | /s/ D. Xxxxxxx Xxxxxxxx | ||||
/s/ Xxxxx
X. Xxxxxx
|
Its | Treasurer & Chief Financial Officer | |||
| Xxxxxxxxx Farms, Inc. (Processing Division) | |||||
Attest: |
|||||
| By | /s/ D. Xxxxxxx Xxxxxxxx | ||||
/s/ Xxxxx
X. Xxxxxx
|
Its | Treasurer & Chief Financial Officer | |||
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