Exhibit 10.1

 

 

 

CREDIT AGREEMENT

among

SANDERSON FARMS, INC.

and

BMO HARRIS BANK N.A.,

as Agent

AGFIRST FARM CREDIT BANK,

AGSTAR FINANCIAL SERVICES, PCA,

FARM CREDIT BANK OF TEXAS,

FARM CREDIT SERVICES OF AMERICA, PCA,

REGIONS BANK,

as Co-Documentation Agents

BANK OF THE WEST,

FARM CREDIT MID-AMERICA, PCA,

1ST FARM CREDIT SERVICES, PCA,

GREENSTONE FARM CREDIT SERVICES, ACA,

NORTHWEST FARM CREDIT SERVICES, PCA,

UNITED FCS, PCA D/B/A FCS COMMERCIAL FINANCE GROUP,

as Co-Syndication Agents

and

THE FROM TIME TO TIME BANKS PARTIES HERETO

April 28, 2017

 

 

 

BMO CAPITAL MARKETS, AGFIRST FARM CREDIT BANK, AGSTAR FINANCIAL SERVICES, PCA,
FARM CREDIT BANK OF TEXAS, FARM CREDIT SERVICES OF AMERICA, PCA, AND REGIONS
BANK, AS JOINT LEAD ARRANGERS AND JOINT BOOK RUNNERS

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SANDERSON FARMS, INC.

CREDIT AGREEMENT

TABLE OF CONTENTS

 

SECTION   HEADING                                           PAGE  

SECTION 1.

 

THE CREDITS

     1  

Section 1.1.

 

The Revolving Credit

     1  

Section 1.2.

 

The Revolving Notes

     3  

Section 1.3.

 

Swing Loans

     3  

Section 1.4.

 

Interest Rates

     5  

      (a)

 

Domestic Rate

     5  

      (b)

 

Eurodollar Rate

     6  

      (c)

 

Default Rate

     6  

Section 1.5.

 

Manner of Borrowing and Rate Selection

     6  

Section 1.6.

 

Letters of Credit

     7  

Section 1.7.

 

Reimbursement Obligation

     10  

Section 1.8.

 

Participation in L/Cs

     11  

Section 1.9.

 

Substitution of Lenders

     11  

Section 1.10.

 

Defaulting Lenders

     12  

Section 1.11.

 

Cash Collateral for Fronting Exposure

     14  

SECTION 2.

 

FEES, PREPAYMENTS AND TERMINATIONS

     15  

Section 2.1.

 

Commitment Fee

     15  

Section 2.2.

 

Agent’s Fee

     15  

Section 2.3.

 

Optional Prepayments

     15  

Section 2.4.

 

Mandatory Prepayments

     16  

Section 2.5.

 

Terminations

     16  

SECTION 3.

 

PLACE AND APPLICATION OF PAYMENTS

     16  

SECTION 4.

 

DEFINITIONS

     17  

SECTION 5.

 

REPRESENTATIONS AND WARRANTIES

     31  

Section 5.1.

 

Organization and Qualification

     31  

Section 5.2.

 

Financial Reports

     31  

Section 5.3.

 

Litigation; Tax Returns; Approvals

     31  

Section 5.4.

 

Regulation U

     32  

Section 5.5.

 

No Default

     32  

Section 5.6.

 

ERISA

     32  

Section 5.7.

 

Compliance with Laws

     32  

Section 5.8.

 

Security Interests and Indebtedness

     32  

Section 5.9.

 

Subsidiaries

     32  

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Section 5.10.

 

Accurate Information

     32  

Section 5.11.

 

Enforceability

     33  

Section 5.12.

 

OFAC

     33  

Section 5.13.

 

Trademarks, Franchises, and Licenses

     33  

Section 5.14.

 

Governmental Authority and Licensing

     33  

Section 5.15.

 

Good Title

     33  

Section 5.16.

 

Affiliate Transactions

     34  

Section 5.17.

 

Investment Company

     34  

Section 5.18.

 

Other Agreements

     34  

Section 5.19.

 

Solvency

     34  

Section 5.20.

 

No Broker Fees

     34  

SECTION 6.

 

CONDITIONS PRECEDENT

     34  

Section 6.1.

 

General

     34  

Section 6.2.

 

Initial Extension of Credit

     34  

Section 6.3.

 

Each Extension of Credit

     36  

Section 6.4.

 

Legal Matters

     36  

Section 6.5.

 

Closing Fee

     37  

SECTION 7.

 

COVENANTS

     37  

Section 7.1.

 

Maintenance of Property

     37  

Section 7.2.

 

Taxes

     37  

Section 7.3.

 

Maintenance of Insurance

     37  

Section 7.4.

 

Financial Reports

     37  

Section 7.5.

 

Inspection

     38  

Section 7.6.

 

Consolidation and Merger

     39  

Section 7.7.

 

Transactions with Affiliates

     39  

Section 7.8.

 

Material Subsidiaries

     39  

Section 7.9.

 

Consolidated Tangible Net Worth

     39  

Section 7.10.

 

Consolidated Indebtedness for Borrowed Money to Total Capitalization

     39  

Section 7.11.

 

Capital Expenditures

     40  

Section 7.12.

 

Compliance with OFAC Sanctions Programs

     40  

Section 7.13.

 

Liens

     41  

Section 7.14.

 

Investments, Loans, Advances and Acquisitions

     42  

Section 7.15.

 

Sale of Tangible Fixed Assets

     43  

Section 7.16.

 

Notice of Suit or Adverse Change in Business or Default

     44  

Section 7.17.

 

ERISA

     44  

Section 7.18.

 

Use of Proceeds

     44  

Section 7.19.

 

Compliance with Laws, etc

     45  

Section 7.20.

 

Environmental Covenant

     45  

Section 7.21.

 

No Changes in Fiscal Year

     45  

Section 7.22.

 

Change in the Nature of Business

     45  

Section 7.23.

 

No Restrictions

     45  

Section 7.24.

 

Maintenance of Subsidiaries

     45  

 

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SECTION 8.

 

EVENTS OF DEFAULT AND REMEDIES

     46  

Section 8.1.

 

Definitions

     46  

Section 8.2.

 

Remedies for Non-Bankruptcy Defaults

     47  

Section 8.3.

 

Remedies for Bankruptcy Defaults

     48  

SECTION 9.

 

CHANGE IN CIRCUMSTANCES REGARDING EURODOLLAR LOANS

     48  

Section 9.1.

 

Change of Law

     48  

Section 9.2.

 

Unavailability of Deposits or Inability to Ascertain the Adjusted Eurodollar
Rate

     49  

Section 9.3.

 

Taxes, Increased Costs and Reduced Return

     49  

Section 9.4.

 

Funding Indemnity

     51  

Section 9.5.

 

Lending Branch

     51  

Section 9.6.

 

Discretion of Bank as to Manner of Funding

     51  

SECTION 10.

 

THE AGENT

     52  

Section 10.1.

 

Appointment and Authorization of Agent

     52  

Section 10.2.

 

Agent and its Affiliates

     52  

Section 10.3.

 

Action by Agent

     52  

Section 10.4.

 

Consultation with Experts

     53  

Section 10.5.

 

Liability of Agent; Credit Decision

     53  

Section 10.6.

 

Indemnity

     53  

Section 10.7.

 

Resignation of Agent and Successor Agent

     54  

Section 10.8.

 

L/C Issuer and Swing Line Bank

     54  

Section 10.9.

 

Designation of Additional Agents

     54  

SECTION 11.

 

MISCELLANEOUS

     55  

Section 11.1.

 

Amendments and Waivers

     55  

Section 11.2.

 

Waiver of Rights

     55  

Section 11.3.

 

Several Obligations

     55  

Section 11.4.

 

Non-Business Day

     56  

Section 11.5.

 

Survival of Indemnities

     56  

Section 11.6.

 

Documentary Taxes

     56  

Section 11.7.

 

Representations

     56  

Section 11.8.

 

Notices

     56  

Section 11.9.

 

Costs and Expenses; Environmental Indemnity; Indemnity

     57  

Section 11.10.

 

Counterparts

     58  

Section 11.11.

 

Successors and Assigns; Governing Law; Entire Agreement

     58  

Section 11.12.

 

No Joint Venture

     58  

Section 11.13.

 

Severability

     58  

Section 11.14.

 

Table of Contents and Headings

     59  

Section 11.15.

 

Sharing of Payments

     59  

Section 11.16.

 

Participants

     59  

Section 11.17.

 

Assignments

     60  

 

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Section 11.18.

 

Confidentiality

     62  

Section 11.19.

 

Waiver of Jury Trial

     63  

Section 11.20.

 

USA Patriot Act

     63  

Section 11.21.

 

Taxes

     63  

Section 11.22.

 

Waiver of Borrower’s Rights

     67  

 

Exhibit A

 

Revolving Credit Note

Exhibit B

 

Swing Note

Exhibit C

 

Reserved

Exhibit D

 

Guaranty Agreement

Exhibit E

 

Compliance Certificate

Exhibit F

 

Environmental Disclosure

Exhibit G

 

Schedule of Subsidiaries

Exhibit H

 

Litigation; Tax Returns; Approval

Exhibit I

 

Assignment and Acceptance

EXHIBIT J-1

 

Form of U.S. Tax Compliance Certificate

EXHIBIT J-2

 

Form of U.S. Tax Compliance Certificate

EXHIBIT J-3

 

Form of U.S. Tax Compliance Certificate

EXHIBIT J-4

 

Form of U.S. Tax Compliance Certificate

Exhibit K

 

Commitment Amount Increase Request

Exhibit L

 

Term Note

Schedule 1

 

Commitments

 

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SANDERSON FARMS, INC.

CREDIT AGREEMENT

This Credit Agreement is entered into as of April 28, 2017, by and among
SANDERSON FARMS, INC., a Mississippi corporation (the “Company”), the several
financial institutions from time to time party to this Agreement, as Banks, and
BMO HARRIS BANK N.A., as Agent as provided herein. All capitalized terms used
herein without definition shall have the same meanings herein as such terms are
defined in Section 4 hereof.

PRELIMINARY STATEMENT

The Company has requested, and the Banks have agreed to extend, certain credit
facilities on the terms and conditions of this Agreement.

NOW, THEREFORE, in consideration of the mutual agreements contained herein, and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto hereby agree as follows:

 

SECTION 1. THE CREDITS.

Section 1.1.    The Revolving Credit. (a) Subject to all of the terms and
conditions hereof, the Banks agree, severally and not jointly, to extend a
revolving credit to the Company (the “Revolving Credit”) which may be utilized
by the Company in the form of loans (individually a “Revolving Credit Loan” and
collectively the “Revolving Credit Loans”) and L/Cs (as hereinafter defined).
The aggregate principal amount of all Revolving Credit Loans, Swing Loans (as
hereinafter defined) and Reimbursement Obligations (as hereinafter defined) at
any time outstanding plus the maximum amount available to be drawn under all
L/Cs outstanding from time to time shall not exceed the sum of the Banks’
Revolving Credit Commitments (as hereinafter defined) in effect from time to
time during the term of this Agreement. The Revolving Credit shall be available
to the Company, and may be availed of by the Company from time to time, be
repaid and used again, during the period from the date hereof to and including
April 28, 2022 (the “Revolving Credit Termination Date”).

(b)    Loans under the Revolving Credit may be Eurodollar Loans or Domestic Rate
Loans. All Revolving Credit Loans shall be made from each Bank in proportion to
its Commitment Percentage (as hereinafter defined). Each Domestic Rate Loan
shall be in an amount not less than $1,000,000 or such greater amount which is
an integral multiple of $100,000 and each Eurodollar Loan shall be in an amount
not less than $3,000,000 or such greater amount which is an integral multiple of
$500,000.

(c)    The Company may, on one or more occasions, on any Business Day prior to
the Revolving Credit Termination Date, elect to either increase the aggregate
amount of the Revolving Credit Commitments or to obtain term loans (individually
a “Term Loan” and collectively the “Term Loans”), in each case by delivering a
Commitment Amount Increase Request substantially in the form attached hereto as
Exhibit K or in such other form acceptable to

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the Administrative Agent at least five (5) Business Days prior to the desired
effective date of such increase (the “Commitment Amount Increase”) or the date
the Term Loans are to be made, identifying an additional Bank (or additional
Revolving Credit Commitments for existing Bank(s)) and the amount of its
Revolving Credit Commitment (or additional amount of its Revolving Credit
Commitment(s)) or the Banks that are willing to make the requested Term Loans;
provided, however, that (i) any increase of the aggregate amount of the
Revolving Credit Commitments to an amount that, together with the aggregate
amount of Term Loans, if any, then outstanding would exceed $1,050,000,000 and
the making of Term Loans in an aggregate principal amount that, together with
the aggregate amount of the Revolving Credit Commitments then in effect would
exceed $1,050,000,000 will require the approval of the Required Banks, (ii) any
increase of the aggregate amount of the Revolving Credit Commitments and the
aggregate amount of requested Term Loans shall be in an amount not less than
$25,000,000, (iii) no Event of Default shall have occurred and be continuing at
the time of the request or on the effective date of the Commitment Amount
Increase or the date the Term Loans are requested to be made, (iv) all
representations and warranties contained in Section 5 hereof shall be true and
correct to the extent specified in Section 6.3(a) hereof at the effective date
of such Commitment Amount Increase or the date the Term Loans are requested to
be made, (v) the Agent’s consent (which shall not be unreasonably withheld)
shall be required for any increase in the amount of an existing Bank’s Revolving
Credit Commitment or the addition of a new Bank, (vi) each Bank or other
financial institution that elects to make a Term Loan shall enter into an
amendment to this Agreement (the “Term Loan Amendment”) giving effect to the
modifications permitted by this Section 1.1(c) executed by the Company and
acknowledged by the Guarantor Subsidiaries and the Agent, and (vii) on the
effective date of a Commitment Amount Increase and on the date Term Loans are
requested to be made under this Section 1.1(c), as the case may be, the Company
and the Guarantor Subsidiaries shall have delivered to the Agent and the Banks
or other financial institutions providing the Commitment Amount Increase or
making the Term Loans resolutions of their respective Boards of Directors
authorizing such Commitment Amount Increase or Term Loans, the Term Loan
Amendment and the Term Notes (as defined below), together with such officer’s
certificates and legal opinions as the Agent and such Banks may reasonably
request. The effective date of the Commitment Amount Increase or the date the
Term Loans are to be made shall be agreed upon by the Company and the Agent.
Upon the effectiveness thereof, the new Bank(s) (and/or, if applicable, existing
Bank(s)) shall advance Revolving Credit Loans in an amount sufficient such that
after giving effect to its advance each Bank shall have outstanding its
Commitment Percentage of Revolving Credit Loans or make the requested Term
Loans. It shall be a condition to such effectiveness and the making of Term
Loans that (x) if any Eurodollar Loans are outstanding under the Revolving
Credit on the date of such effectiveness of a Commitment Amount Increase, such
Eurodollar Loans shall be deemed to be prepaid on such date and the Company
shall pay any amounts owing to the Banks pursuant to Section 9.4 hereof, and
(y) the Company shall not have terminated any portion of the Revolving Credit
Commitments pursuant to Section 2.5 hereof. The Company agrees to pay any
reasonable out-of-pocket expenses of the Agent relating to any Commitment Amount
Increase and the making of any Term Loans under this Section 1.1(c).
Notwithstanding anything herein to the contrary, no Bank shall have any
obligation to increase its Revolving Credit Commitment or make any Term Loan and
no Bank’s Revolving Credit Commitment shall be increased without its consent
thereto, and each Bank may at its option, unconditionally and without cause,
decline to increase its Revolving Credit Commitment or make any Term Loan
hereunder.

 

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Each Term Loan made pursuant to this Section 1.1(c) shall be evidenced by a
promissory note of the Company in the form of Exhibit L attached hereto,
appropriately completed (individually a “Term Note” and collectively the “Term
Notes”) payable to the order of the Bank that made such Term Loan. The Term
Loans shall rank pari passu in right of payment with the Revolving Credit Loans
and shall mature no earlier than the Revolving Credit Termination Date. The Term
Loan Amendment may, without the consent of any other Banks, effect such
amendments to this Agreement and the other Loan Documents as may be necessary or
appropriate, in the reasonable opinion of the Agent and the Company, to effect
the provisions of this Section 1.1(c) with respect to the Term Loans, including
appropriate amendment to the definitions of the terms “Required Banks,”
“Commitment Percentage” and “Loans” to include the Term Loans and the Banks
making the same on the same basis as the Revolving Credit Loans.

Section 1.2.    The Revolving Notes. All Revolving Credit Loans made by each
Bank under its Revolving Credit Commitment shall be evidenced by a single
Revolving Credit Note of the Company substantially in the form of Exhibit A
hereto (individually, a “Revolving Note” and together, the “Revolving Notes”)
payable to the order of such Bank in the principal amount of such Revolving
Credit Commitment, but the aggregate principal amount of indebtedness evidenced
by such Revolving Note at any time shall be, and the same is to be determined
by, the aggregate principal amount of all Revolving Credit Loans made by such
Bank to the Company pursuant hereto on or prior to the date of determination
less the aggregate amount of principal repayments on such Revolving Credit Loans
received by or on behalf of such Bank on or prior to such date of determination.
Each Revolving Note shall be dated as of the execution date of this Agreement,
shall be delivered concurrently herewith, and shall be expressed to mature on
the Revolving Credit Termination Date and to bear interest as provided in
Section 1.4 hereof. Each Bank shall record on its books or records or on a
schedule to its Revolving Note the amount of each Revolving Credit Loan made by
it hereunder, whether each Revolving Credit Loan is a Domestic Rate Loan or
Eurodollar Loan, and, with respect to Eurodollar Loans, the interest rate and
Interest Period applicable thereto, and all payments of principal and interest
and the principal balance from time to time outstanding, provided that prior to
any transfer or assignment of such Revolving Note all such amounts shall be
recorded on the schedule to such Revolving Note. The record thereof, whether
shown on such books or records or on the schedule to the Revolving Note, shall
be prima facie evidence as to all such amounts; provided, however, that the
failure of any Bank to record, or any mistake in recording, any of the foregoing
shall not limit or otherwise affect the obligation of the Company to repay all
Revolving Credit Loans made hereunder together with accrued interest thereon.

Section 1.3.    Swing Loans. (a) Generally. Subject to the terms and conditions
hereof, as part of the Revolving Credit, the Swing Line Bank may, in its
discretion, make swing line loans in U.S. Dollars to the Company (individually a
“Swing Loan” and collectively the “Swing Loans”) which shall not in the
aggregate at any time outstanding exceed the Swing Line Sublimit. Swing Loans
may be availed of from time to time and borrowings thereunder may be repaid and
used again during the period ending on the Revolving Credit Termination Date.
Each Swing Loan shall be in a minimum amount of $250,000 or such greater amount
which is an integral multiple of $100,000.

 

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All Swing Loans made by the Swing Line Bank shall be evidenced by a Swing Note
of the Company (the “Swing Note”) payable to the order of the Swing Line Bank in
the amount of its Swing Line Sublimit, the Swing Note to be in the form attached
hereto as Exhibit B. Without regard to the face principal amount of the Swing
Note, the actual principal amount at any time outstanding and owing by the
Company on account thereof during the period ending on the Revolving Credit
Termination Date shall be the sum of all advances then or theretofore made
thereon less all principal payments actually received thereon during such
period.

(b)    Interest on Swing Loans. Each Swing Loan shall bear interest until
maturity (whether by acceleration or otherwise) at a rate per annum equal to
(i) the sum of the Domestic Rate plus the Applicable Margin for Domestic Rate
Loans under the Revolving Credit as from time to time in effect (computed on the
basis of a year of 365 or 366 days, as the case may be, for the actual number of
days elapsed) or (ii) the Swing Line Bank’s Quoted Rate (computed on the basis
of a year of 360 days for the actual number of days elapsed). Interest on each
Swing Loan bearing interest at the Domestic Rate shall be payable quarterly in
arrears on the last day of each calendar quarter and at maturity (whether by
acceleration or otherwise), and interest on each Swing Loan bearing interest at
the Swing Line Bank’s Quoted Rate shall be due and payable by the Company on the
last day of each Interest Period and at maturity (whether by acceleration or
otherwise). If any Swing Loan is not paid when due it shall bear interest at a
rate per annum (computed on the basis of a year of 365 or 366 days, as the case
may be, for the actual number of days elapsed) determined by adding the
Applicable Margin to the Domestic Rate as in effect from time to time plus 1.5%.
Interest on all Swing Loans after maturity shall be due and payable upon demand.

(c)    Requests for Swing Loans. The Company shall give the Agent prior notice
(which may be written or oral) (i) no later than 2:00 p.m. (Chicago time) on the
date upon which the Company requests that any Swing Loan bearing interest at the
Domestic Rate plus the Applicable Margin be made, and (ii) no later than 12:00
noon (Chicago time) on the date upon which the Company requests that any Swing
Loan bearing interest at the Swing Line Bank’s Quoted Rate be made, and such
notice shall include the amount and date of such Swing Loan, and, if applicable,
the Interest Period requested therefor. The Agent shall promptly advise the
Swing Line Bank of any such notice received from the Company. After receiving
such notice, the Swing Line Bank shall in its discretion quote an interest rate
to the Company at which the Swing Line Bank would be willing to make such Swing
Loan available to the Company for the Interest Period so requested (the rate so
quoted for a given Interest Period being herein referred to as “Swing Line
Bank’s Quoted Rate”). The Company acknowledges and agrees that the interest rate
quote is given for immediate and irrevocable acceptance. If the Company does not
so immediately accept the Swing Line Bank’s Quoted Rate for the full amount
requested by the Company for such Swing Loan, the Swing Line Bank’s Quoted Rate
shall be deemed immediately withdrawn and such Swing Loan shall bear interest at
the rate per annum determined by adding the Applicable Margin for Domestic Rate
Loans under the Revolving Credit to the Domestic Rate as from time to time in
effect. Subject to the terms and conditions hereof, the proceeds of each Swing
Loan extended to the Company shall be deposited or otherwise wire transferred to
the Company’s Designated Disbursement Account or as the Company, the Agent, and
the Swing Line Bank may otherwise agree. Anything contained in the foregoing to
the contrary notwithstanding, the undertaking of the Swing Line Bank to make

 

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Swing Loans shall be subject to all of the terms and conditions of this
Agreement (provided that the Swing Line Bank shall be entitled to assume that
the conditions precedent to an advance of any Swing Loan have been satisfied
unless notified to the contrary by the Agent or the Required Banks).

(d)    Refunding Loans. In its sole and absolute discretion, the Swing Line Bank
may at any time, on behalf of the Company (which hereby irrevocably authorizes
the Swing Line Bank to act on its behalf for such purpose) and with notice to
the Company and the Agent, request each Bank to make a Revolving Credit Loan in
the form of a Domestic Rate Loan in an amount equal to such Bank’s Commitment
Percentage of the amount of the Swing Loans outstanding on the date such notice
is given. Unless an Event of Default described in Section 8.1(j) or 8.1(k)
exists with respect to the Company, regardless of the existence of any other
Event of Default, each Bank shall make the proceeds of its requested Revolving
Credit Loan available to the Agent for the account of the Swing Line Bank, in
immediately available funds, at the Agent’s office in Chicago, Illinois (or such
other location designated by the Agent), before 3:00 p.m. (Chicago time) on the
Business Day following the date such notice is given. The Agent shall promptly
remit the proceeds of such Borrowing to the Swing Line Bank to repay the
outstanding Swing Loans.

(e)    Participations. If any Bank refuses or otherwise fails to make a
Revolving Credit Loan when requested by the Swing Line Bank pursuant to
Section 1.3(d) above (because an Event of Default described in Section 8.1(j) or
8.1(k) exists with respect to the Company or otherwise), such Bank will, by the
time and in the manner such Revolving Credit Loan was to have been funded to the
Swing Line Bank, purchase from the Swing Line Bank an undivided participating
interest in the outstanding Swing Loans in an amount equal to its Commitment
Percentage of the aggregate principal amount of Swing Loans that were to have
been repaid with such Revolving Credit Loans. Each Bank that so purchases a
participation in a Swing Loan shall thereafter be entitled to receive its
Commitment Percentage of each payment of principal received on the Swing Loan
and of interest received thereon accruing from the date such Bank funded to the
Swing Line Bank its participation in such Loan. The several obligations of the
Banks under this Section shall be absolute, irrevocable, and unconditional under
any and all circumstances whatsoever and shall not be subject to any set-off,
counterclaim or defense to payment which any Bank may have or have had against
the Company, any other Bank, or any other Person whatsoever. Without limiting
the generality of the foregoing, such obligations shall not be affected by any
Potential Default or Event of Default which may then be continuing hereunder or
by any reduction or termination of the Commitments of any Bank, and each payment
made by a Bank under this Section shall be made without any offset, abatement,
withholding, or reduction whatsoever.

Section 1.4.    Interest Rates. (a) Domestic Rate. Each Domestic Rate Loan shall
bear interest (computed on the basis of a year of 365 or 366 days, as the case
may be, and actual days elapsed) on the unpaid principal amount thereof from the
date such Loan is made until maturity (whether by acceleration, upon prepayment
or otherwise) at a rate per annum equal to the sum of the Applicable Margin plus
the Domestic Rate from time to time in effect, payable quarterly in arrears on
the last day of each calendar quarter, commencing on June 30, 2017, and at
maturity (whether by acceleration, upon prepayment or otherwise).

 

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(b)    Eurodollar Rate. Each Eurodollar Loan shall bear interest (computed on
the basis of a year of 360 days and actual days elapsed) on the unpaid principal
amount thereof from the date such Loan is made or created until the last day of
the Interest Period applicable thereto or, if earlier, until maturity (whether
by acceleration or otherwise) at a rate per annum equal to the sum of the
Applicable Margin plus the Adjusted Eurodollar Rate, payable on the last day of
each Interest Period applicable thereto and at maturity (whether by acceleration
or otherwise) and, with respect to any Eurodollar Loan with an Interest Period
in excess of three months, on every date which is three months after the date
such Loan is made or created; provided that if on the last day of the Interest
Period applicable to any Eurodollar Loan the Company does not pay such Loan,
such Loan shall automatically become a Domestic Rate Loan as of the day
immediately following the last day of the Interest Period applicable thereto.

(c)    Default Rate. During the existence of any Event of Default and if so
requested by the Agent or the Required Banks, all Revolving Credit Loans and
Reimbursement Obligations outstanding hereunder shall bear interest (computed on
the basis of a year of 365 or 366 days, as the case may be, and actual days
elapsed) payable on demand, at a rate per annum equal to:

(i)    with respect to any Domestic Rate Loan, the sum of 2% plus the Applicable
Margin plus the Domestic Rate from time to time in effect; and

(ii)    with respect to any Eurodollar Loan, the sum of 2% plus the rate of
interest in effect thereon at the time of such default until the end of the
Interest Period then applicable thereto, and, thereafter, at a rate per annum
equal to the sum of 2% plus the Applicable Margin plus the Domestic Rate from
time to time in effect.

Section 1.5.    Manner of Borrowing and Rate Selection. (a) Except as otherwise
provided in Section 1.3(c) hereof and in Section 1.7 hereof, the Company shall
give telephonic, telex or telecopy notice to the Agent (which notice, if
telephonic, shall be promptly confirmed in writing) no later than (i) 11:00 a.m.
(Chicago time) on the date the Banks are requested to make each Domestic Rate
Loan and (ii) 11:00 a.m. (Chicago time) on the date at least three (3) Business
Days prior to the date of (x) each Eurodollar Loan which the Banks are requested
to make and (y) the conversion of any Domestic Rate Loan into a Eurodollar Loan.
Each such notice shall specify the date of the Loan requested (which shall be a
Business Day), the amount of such Loan or the amount to be converted, as the
case may be, whether the Loan is to be made available by means of a Domestic
Rate Loan or Eurodollar Loan and, with respect to Eurodollar Loans, the Interest
Period applicable thereto; provided, that in no event shall the principal amount
of any requested Revolving Credit Loan plus the aggregate principal amount of
all Revolving Credit Loans and Swing Loans outstanding hereunder exceed the
amounts specified in Section 1.1(a) hereof. Upon notice to the Company by the
Agent or Required Banks, no Borrowing of Eurodollar Loans shall be advanced,
continued, or created by conversion if any Event of Default or Potential Default
then exists. The Company agrees that the Agent may rely on any such telephonic,
telex or telecopy notice given by any person who the Agent reasonably believes
is the chief executive officer, the chief accounting officer, the chief
financial officer or the corporate cashier of the Company without the necessity
of independent investigation and in the event any notice by such means conflicts
with the written confirmation, such notice shall govern if any Bank has acted in
good faith reliance thereon. The Agent shall, on the day any such notice is

 

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received by it, give prompt telephonic, telex or telecopy (if telephonic, to be
confirmed in writing within one Business Day) notice of the receipt of notice
from the Company hereunder to each of the Banks, and, if such notice requests
the Banks to make or effect by conversion any Eurodollar Loans, the Agent shall
confirm to the Company by telephonic, telex or telecopy means, which
confirmation shall be conclusive and binding on the Company in the absence of
manifest error, the Interest Period and the interest rate applicable thereto
promptly after such rate is determined by the Agent.

(b)    Subject to the provisions of Section 6 hereof, the proceeds of each Loan
shall be made available to the Company at the principal office of the Agent in
Chicago, Illinois, in immediately available funds, on the date such Loan is
requested to be made by crediting the Company’s general operating account
maintained with the Agent in Chicago, Illinois. Not later than 3:00 p.m. Chicago
time, on the date specified for any Loan to be made hereunder, each Bank shall
make its Commitment Percentage of such Loan available to the Company in
immediately available funds at the principal office of the Agent.

(c)    Unless the Agent shall have been notified by a Bank prior to the date of
a Loan to be made by such Bank (which notice shall be effective upon receipt)
that such Bank does not intend to make the proceeds of such Loan available to
the Agent, the Agent may assume that such Bank has made such proceeds available
to the Agent on such date and the Agent may in reliance upon such assumption
(but shall not be required to) make available to the Company a corresponding
amount. If such corresponding amount is not in fact made available to the Agent
by such Bank, the Agent shall be entitled to receive such amount on demand from
such Bank (or, if such Bank fails to pay such amount forthwith upon such demand,
to recover such amount, together with interest thereon at the rate otherwise
applicable thereto under Section 1.4 hereof, from the Company) together with
interest thereon in respect of each day during the period commencing on the date
such amount was made available to the Company and ending on the date the Agent
recovers such amount, at a rate per annum equal to the effective rate charged to
the Agent for overnight Federal funds transactions with member banks of the
Federal Reserve System for each day, as determined by the Agent (or, in the case
of a day which is not a Business Day, then for the preceding Business Day) (the
“Fed Funds Rate”). Nothing in this Section 1.5(c) shall be deemed to permit any
Bank to breach its obligations to make Loans under the Revolving Credit or to
limit the Company’s claims against any Bank for such breach.

Section 1.6.    Letters of Credit. (a) Subject to all the terms and conditions
hereof, satisfaction of all conditions precedent to borrowing under this
Agreement and so long as no Potential Default or Event of Default is in
existence, at the Company’s request, the L/C Issuer shall issue, at any time
before the Revolving Credit Termination Date, letters of credit (an “L/C” and
collectively the “L/Cs”) for the account of the Company subject to availability
under the Revolving Credit, and the Banks hereby agree to participate therein as
more fully described in Section 1.8 hereof. Each L/C shall be issued pursuant to
an application for letter of credit (collectively the “L/C Agreements” and
individually an “L/C Agreement”) in a form that is mutually acceptable to the
Company and the L/C Issuer, shall conform to the general requirements of the L/C
Issuer for the issuance of letters of credit as to form and substance, shall be
in U.S. Dollars and shall be a letter of credit which the L/C Issuer may
lawfully issue. The L/Cs shall consist of standby and commercial letters of
credit in an aggregate face amount not to

 

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exceed $30,000,000. Each L/C shall have an expiry date not more than one year
from the date of issuance thereof. The Company agrees that if on the Revolving
Credit Termination Date any L/C remains outstanding the Company shall then
deliver to the Agent, without notice or demand, Cash Collateral in an amount
equal to 105% of the aggregate amount of each L/C then outstanding (which shall
be held by the Agent pursuant to the terms of Section 1.6(g) hereof). The amount
available to be drawn under each L/C issued and outstanding pursuant hereto
shall be deducted from the credit otherwise available under the Revolving Credit
but shall not reduce the Revolving Credit Commitments of the Banks hereunder. In
consideration of the issuance of L/Cs the Company agrees to pay the applicable
L/C Issuer for the pro rata benefit of the Banks a fee (the “L/C Participation
Fee”) in the amount of the rate per annum (computed on the basis of a 360 day
year and actual days elapsed) equal to the Applicable Margin as in effect from
time to time for Eurodollar Loans of the undrawn amount for each standby L/C
issued for the account of the Company hereunder, payable quarterly in arrears on
the last day of each March, June, September and December commencing June 30,
2017, and on the Revolving Credit Termination Date. The Company shall also pay
the L/C Issuers a fronting fee in the amount of one-eighth of one percent
(0.125%) of the face amount of each standby L/C issued hereunder, payable on the
date of issuance of each such standby L/C hereunder and on the date of each
extension, if any, of the expiry date of each such standby L/C and the relevant
L/C Issuer’s usual and customary fees with respect to each trade letter of
credit issued hereunder, payable upon negotiation thereof. In addition, the
Company shall pay to the relevant L/C Issuer for its own account such L/C
Issuer’s standard charges for letters of credit with respect to each L/C.
Notwithstanding anything contained herein to the contrary, the L/C Issuer shall
be under no obligation to issue, extend or amend any L/C if a default of any
Bank’s obligations to fund under Section 1.8 exists or any Bank is at such time
a Defaulting Lender hereunder, unless the L/C Issuer has entered into
arrangements with the Company or such Bank satisfactory to the L/C Issuer to
eliminate the L/C Issuer’s risk with respect to such Bank.

(b)    Upon satisfaction of all conditions precedent to the initial Loan
hereunder, without any further action on the part of the Company, the Existing
L/C Issuer, the Agent or any Bank, (i) each of the letters of credit (the
“Existing L/Cs”) previously issued by the Existing L/C Issuer for the account of
the Company under the Existing Agreement shall be deemed for all purposes of
this Agreement to be an L/C issued hereunder, (ii) each application and
agreement for a letter of credit pursuant to which each Existing L/C was issued
shall be deemed for all purposes of this Agreement to be an L/C Agreement, and
(iii) all of the Company’s indebtedness, obligations and liabilities to the
Existing L/C Issuer with respect to the Existing L/Cs shall be deemed to be
Reimbursement Obligations of the Company for all purposes of this Agreement.

(c)    Notwithstanding anything contained in any L/C Agreement to the contrary:
(i) the Company shall pay fees in connection with each L/C as set forth in
Section 1.6(a) hereof, (ii) prior to the occurrence and continuance of an Event
of Default, unless required by Section 2.4 hereof, the Agent will not call for
the funding by the Company of any amount under an L/C issued for the Company’s
account, or for any other form of additional collateral security for the
Company’s obligations in connection with such L/C under the L/C Agreements, and
(iii) prior to the occurrence and continuance of an Event of Default or the
Revolving Credit Termination Date, unless required by Section 1.6(a) or
Section 2.4 hereof, the Agent will not call for the funding by the Company of an
L/C issued for its account prior to being presented with a

 

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draft drawn thereunder (or, in the event the draft is a time draft, prior to its
due date). If an L/C Issuer issues any L/C with an expiration date that is
automatically extended unless such L/C Issuer gives notice that the expiration
date will not so extend beyond its then scheduled expiration date, such L/C
Issuer will give such notice of non-renewal before the time necessary to prevent
such automatic extension if before such required notice date (i) the expiration
date of such L/C if so extended would be after the Revolving Credit Termination
Date, (ii) the Revolving Credit Commitments have been terminated, (iii) an Event
of Default or Potential Default has occurred and is continuing, or (iv) the
renewal term for such L/C would exceed one year from the renewal date.

(d)    The Agent shall give prompt telecopy notice to each Bank of each issuance
of, or amendment to, an L/C specifying the effective date of the L/C or
amendment, the amount, the beneficiary, and the expiration date of the L/C, in
each case as established originally or through the relevant amendment, as
applicable, the account party or parties for the L/C, each Bank’s pro rata
participation in such L/C and whether the Agent has classified the L/C as a
commercial, performance, or financial letter of credit for regulatory reporting
purposes.

(e)    The Banks shall, ratably in accordance with their respective Commitment
Percentages, indemnify the L/C Issuers (to the extent not reimbursed by the
Company) against any cost, expense (including reasonable counsel fees and
disbursements), claim, demand, action, loss or liability (except such as result
from such L/C Issuer’s gross negligence or willful misconduct) that the L/C
Issuers may suffer or incur in connection with any L/C. The obligations of the
Banks under this Section 1.6(e) and all other parts of this Section 1.6 shall
survive termination of this Agreement and of all L/C Agreements, and all drafts
or other documents presented in connection with drawings thereunder.

(f)    The Company’s obligation to reimburse the Reimbursement Obligations as
provided in Section 1.7 shall be absolute, unconditional and irrevocable, and
shall be performed strictly in accordance with the terms of this Agreement and
the relevant L/C Agreement under any and all circumstances whatsoever and
irrespective of (i) any lack of validity or enforceability of any L/C or this
Agreement, or any term or provision therein, (ii) any draft or other document
presented under a L/C proving to be forged, fraudulent or invalid in any respect
or any statement therein being untrue or inaccurate in any respect,
(iii) payment by an L/C Issuer under a L/C against presentation of a draft or
other document that does not strictly comply with the terms of such L/C, or
(iv) any other event or circumstance whatsoever, whether or not similar to any
of the foregoing, that might, but for the provisions of this Section, constitute
a legal or equitable discharge of, or provide a right of setoff against, the
Company’s obligations hereunder. None of the Agent, the Banks, or the
L/C Issuers shall have any liability or responsibility by reason of or in
connection with the issuance or transfer of any L/C or any payment or failure to
make any payment thereunder (irrespective of any of the circumstances referred
to in the preceding sentence), or any error, omission, interruption, loss or
delay in transmission or delivery of any draft, notice or other communication
under or relating to any L/C (including any document required to make a drawing
thereunder), any error in interpretation of technical terms or any consequence
arising from causes beyond the control of the L/C Issuers; provided that the
foregoing shall not be construed to excuse the L/C Issuers from liability to the
Company to the extent of any direct damages (as opposed to consequential
damages, claims in respect of which

 

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are hereby waived by the Company to the extent permitted by applicable law)
suffered by the Company that are caused by such L/C Issuer’s failure to exercise
care when determining whether drafts and other documents presented under a L/C
comply with the terms thereof. The parties hereto expressly agree that, in the
absence of gross negligence or willful misconduct on the part of an L/C Issuer
(as finally determined by a court of competent jurisdiction), such L/C Issuer
shall be deemed to have exercised care in each such determination. In
furtherance of the foregoing and without limiting the generality thereof, the
parties agree that, with respect to documents presented which appear on their
face to be in substantial compliance with the terms of a L/C, the relevant
L/C Issuer may, in its sole discretion, either accept and make payment upon such
documents without responsibility for further investigation, regardless of any
notice or information to the contrary, or refuse to accept and make payment upon
such documents if such documents are not in strict compliance with the terms of
such L/C.

(g)    All amounts available for drawing under any or all outstanding L/Cs
required under any of Sections 1.6(a) or 2.4 hereof shall be held by the Agent
in one or more separate collateral accounts (each such account, and the credit
balances, properties, and any investments from time to time held therein, and
any substitutions for such account, any certificate of deposit or other
instrument evidencing any of the foregoing and all proceeds of and earnings on
any of the foregoing being collectively called the “Collateral Account”) as
security for, and for application by the Agent (to the extent available) to, the
reimbursement of any payment under any L/C then or thereafter made by the
L/C Issuer. The Collateral Account shall be held in the name of and subject to
the exclusive dominion and control of the Agent for the benefit of the Agent,
the Banks, and the L/C Issuer. If and when requested by the Company, the Agent
shall invest funds held in the Collateral Account from time to time in direct
obligations of, or obligations the principal of and interest on which are
unconditionally guaranteed by, the United States of America with a remaining
maturity of one year or less, provided that the Agent is irrevocably authorized
to sell investments held in the Collateral Account when and as required to make
payments out of the Collateral Account for application to amounts due and owing
from the Borrower to the L/C Issuer, the Agent or the Banks. Subject to the
terms of Sections 1.10 and 1.11, if the Company shall have made payment of all
obligations referred to above required under Section 2.4, at the request of the
Company the Agent shall release to the Company amounts held in the Collateral
Account so long as at the time of the release and after giving effect thereto no
Potential Default or Event of Default exists. After all L/Cs have expired or
been cancelled, at the request of the Company, the Agent shall release any
remaining amounts held in the Collateral Account following payment in full in
cash of all Reimbursement Obligations.

Section 1.7.    Reimbursement Obligation. The Company is obligated, and hereby
unconditionally agrees, to pay in immediately available funds to the Agent for
the account of the L/C Issuers and the Banks who are participating in L/Cs
pursuant to Section 1.8 hereof the face amount of each draft drawn, presented
and paid by an L/C Issuer under the terms of an L/C issued by such L/C Issuer
hereunder (the obligation of the Company under this Section 1.7 with respect to
any L/C is a “Reimbursement Obligation”). If at any time the Company fails to
pay any Reimbursement Obligation when due, the Company shall be deemed to have
automatically requested a Domestic Rate Loan from the Banks hereunder, as of the
maturity date of such Reimbursement Obligation, the proceeds of which Loan shall
be used to repay such

 

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Reimbursement Obligation. Such Loan shall only be made if the conditions
precedent contained in Section 6.3 hereof are satisfied or, if they are not
satisfied, upon approval by all of the Banks, and shall be subject to
availability under the Revolving Credit. If such Loan is not made by the Banks
for any reason, the unpaid amount of such Reimbursement Obligation shall be due
and payable to the Agent for the pro rata benefit of the Banks upon demand and
shall bear interest at the rate of interest specified in Section 1.4(c)(i)
hereof.

Section 1.8.    Participation in L/Cs. Each of the Banks will acquire a risk
participation in each L/C upon the issuance thereof, ratably in accordance with
its Commitment Percentage. In the event any Reimbursement Obligation is not
immediately paid by the Company pursuant to Section 1.7 hereof, or if any L/C
Issuer is required at any time to return to the Company or to a trustee,
receiver, liquidator, custodian or other Person any portion of any payment of
any Reimbursement Obligation, each Bank will pay to such L/C Issuer funds in an
amount equal to such Bank’s Commitment Percentage of such Reimbursement
Obligation. At the election of all of the Banks, such funding by the Banks of
the unpaid Reimbursement Obligations shall be treated as additional Revolving
Credit Loans to the Company hereunder rather than a purchase of participations
by the Banks in the related L/C held by the applicable L/C Issuer. The
obligation of the Banks to the L/C Issuers under this Section 1.8 shall be
absolute and unconditional and shall not be affected or impaired by any Event of
Default or Potential Default which may then be continuing hereunder. The Agent
shall notify each Bank by telephone of its Commitment Percentage of such unpaid
Reimbursement Obligation. If such notice has been given to each Bank by 12:00
Noon, Chicago time, each Bank agrees to pay the relevant L/C Issuer in
immediately available and freely transferable funds on the same Business Day its
Commitment Percentage of such Reimbursement Obligation. Funds shall be so made
available at the account designated by the Agent in such notice to the Banks.
Upon the election by the Banks to treat such funding as additional Revolving
Credit Loans hereunder and payment by each Bank, such Loans shall bear interest
in accordance with Section 1.4(a) hereof. The Agent shall share with each Bank
on a pro rata basis relative to its Commitment Percentage a portion of each
payment of a Reimbursement Obligation (whether of principal or interest) and any
L/C Participation Fee payable by the Company. Any such amount shall be promptly
remitted to the Banks when and as received by the Agent from the Company.

Section 1.9.    Substitution of Lenders. In the event (a) the Company receives a
claim from any Bank for compensation under Section 9.3 or 11.21 hereof, (b) the
Company receives notice from any Bank of any illegality pursuant to Section 9.1
hereof, (c) any Bank becomes a Defaulting Lender or such Bank is a Subsidiary or
Affiliate of a Person who has been deemed insolvent or becomes the subject of a
bankruptcy or insolvency proceeding or a receiver or conservator has been
appointed for any such Person, or (d) a Bank fails to consent to an amendment or
waiver requested under Section 11.1 hereof at a time when the Required Banks
have approved such amendment or waiver (any such Bank referred to in clause (a),
(b), (c), or (d) above being hereinafter referred to as an “Affected Lender”),
the Company may, in addition to any other rights the Company may have hereunder
or under applicable law, require any such Affected Lender to assign, at par,
without recourse, all of its interest, rights, and obligations hereunder
(including all of its Commitments and the Loans and participation interests in
L/Cs and other amounts at any time owing to it hereunder and the other Loan
Documents) to an Eligible Assignee specified by the Company, provided that
(i) such assignment shall not conflict

 

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with or violate any law, rule or regulation or order of any court or other
governmental authority, (ii) the Company shall have paid to the Affected Lender
all monies (together with amounts due such Affected Lender under Section 9.4
hereof as if the Loans owing to it were prepaid rather than assigned) other than
such principal owing to it hereunder, (iii) the assignment is entered into in
accordance with, and subject to the consents required by, Section 11.17 hereof
(provided any assignment fees and reimbursable expenses due thereunder shall be
paid by the Company), and (iv) the Company shall have paid to the Agent the
reasonable out-of-pocket costs and expenses incurred by the Agent in connection
with such assignment.

Section 1.10.    Defaulting Lenders. (a) Defaulting Lender Adjustments.
Notwithstanding anything to the contrary contained in this Agreement, if any
Bank becomes a Defaulting Lender, then, until such time as such Bank is no
longer a Defaulting Lender, to the extent permitted by applicable law:

(i)    Waivers and Amendments. Such Defaulting Lender’s right to approve or
disapprove any amendment, waiver or consent with respect to this Agreement shall
be restricted as set forth in the definition of Required Banks.

(ii)    Defaulting Lender Waterfall. Any payment of principal, interest, fees or
other amounts received by the Agent for the account of such Defaulting Lender
(whether voluntary or mandatory, at maturity, pursuant to Section 8 or
otherwise) or received by the Agent from a Defaulting Lender pursuant to
Section 11.15 hereto shall be applied at such time or times as may be determined
by the Agent as follows: first, to the payment of any amounts owing by such
Defaulting Lender to the Agent hereunder; second, to the payment on a pro rata
basis of any amounts owing by such Defaulting Lender to any L/C Issuer or the
Swing Line Bank hereunder; third, to Cash Collateralize the L/C Issuer’s
Fronting Exposure with respect to such Defaulting Lender in accordance with
Section 1.11; fourth, as the Company may request (so long as no Default or Event
of Default exists), to the funding of any Loan in respect of which such
Defaulting Lender has failed to fund its portion thereof as required by this
Agreement, as determined by the Agent; fifth, if so determined by the Agent and
the Company, to be held in a deposit account and released pro rata in order to
(x) satisfy such Defaulting Lender’s potential future funding obligations with
respect to Loans under this Agreement and (y) Cash Collateralize the L/C
Issuer’s future Fronting Exposure with respect to such Defaulting Lender with
respect to future L/Cs issued under this Agreement, in accordance with
Section 1.11; sixth, to the payment of any amounts owing to the Banks, the L/C
Issuer or the Swing Line Bank as a result of any judgment of a court of
competent jurisdiction obtained by any Bank, the L/C Issuer or the Swing Line
Bank against such Defaulting Lender as a result of such Defaulting Lender’s
breach of its obligations under this Agreement; seventh, so long as no Default
or Event of Default exists, to the payment of any amounts owing to the Company
as a result of any judgment of a court of competent jurisdiction obtained by the
Company against such Defaulting Lender as a result of such Defaulting Lender’s
breach of its obligations under this Agreement; and eighth, to such Defaulting
Lender or as otherwise directed by a court of competent jurisdiction; provided
that if (x) such payment is a payment of the principal amount of any Loans or
L/C Obligations in respect of which such Defaulting Lender has not fully funded
its

 

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appropriate share, and (y) such Loans were made or the related L/Cs were issued
at a time when the conditions set forth in Section 6.3 were satisfied or waived,
such payment shall be applied solely to pay the Loans of, and L/C Obligations
owed to, all Non-Defaulting Lenders on a pro rata basis prior to being applied
to the payment of any Loans of, or L/C Obligations owed to, such Defaulting
Lender until such time as all Loans and funded and unfunded participations in
L/C Obligations and Swing Loans are held by the Banks pro rata in accordance
with their Commitment Percentages of the relevant Commitments without giving
effect to Section 1.10(a)(iv) below. Any payments, prepayments or other amounts
paid or payable to a Defaulting Lender that are applied (or held) to pay amounts
owed by a Defaulting Lender or to post Cash Collateral pursuant to this
Section 1.10(a)(ii) shall be deemed paid to and redirected by such Defaulting
Lender, and each Bank irrevocably consents hereto.

(iii)    Certain Fees.

(A)    No Defaulting Lender shall be entitled to receive any commitment fee for
any period during which that Bank is a Defaulting Lender (and the Company shall
not be required to pay any such fee that otherwise would have been required to
have been paid to that Defaulting Lender).

(B)    Each Defaulting Lender shall be entitled to receive L/C Participation
Fees for any period during which that Lender is a Defaulting Lender only to the
extent allocable to its Commitment Percentage of the stated amount of L/Cs for
which it has provided Cash Collateral pursuant to Section 1.11.

(C)    With respect to any L/C Participation Fee not required to be paid to any
Defaulting Lender pursuant to clause (B) above, the Borrower shall (x) pay to
each Non-Defaulting Lender that portion of any such fee otherwise payable to
such Defaulting Lender with respect to such Defaulting Lender’s participation in
L/C Obligations or Swing Loans that has been reallocated to such Non-Defaulting
Lender pursuant to clause (iv) below, (y) pay to each L/C Issuer and Swing Line
Bank, as applicable, the amount of any such fee otherwise payable to such
Defaulting Lender to the extent allocable to such L/C Issuer’s or Swing Line
Bank’s Fronting Exposure to such Defaulting Lender, and (z) not be required to
pay the remaining amount of any such fee.

(iv)    Reallocation of Participations to Reduce Fronting Exposure. All or any
part of such Defaulting Lender’s participation in L/C Obligations and Swing
Loans shall be reallocated among the Non-Defaulting Lenders in accordance with
their respective Commitment Percentages of the relevant Commitments (calculated
without regard to such Defaulting Lender’s Commitments) but only to the extent
that (x) the conditions set forth in Section 6.3 are satisfied at the time of
such reallocation (and, unless the Company, after receiving written notice,
shall have otherwise notified the Agent at such time, the Company shall be
deemed to have represented and warranted that such conditions are satisfied at
such time), and (y) such reallocation does not cause the aggregate Revolving
Loans and interests in L/C Obligations and Swing Loans of any

 

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Non-Defaulting Lender to exceed such Non-Defaulting Lender’s Revolving Credit
Commitment. No reallocation hereunder shall constitute a waiver or release of
any claim of any party hereunder against a Defaulting Lender arising from that
Bank having become a Defaulting Lender, including any claim of a Non-Defaulting
Lender as a result of such Non-Defaulting Lender’s increased exposure following
such reallocation.

(v)    Repayment of Swing Loans. If the reallocation described in clause
(iv) above cannot, or can only partially, be effected, the Company shall,
without prejudice to any right or remedy available to it hereunder or under law,
prepay Swing Loans in an amount equal to the Swing Line Bank’s Fronting
Exposure.

(b)    Defaulting Lender Cure. If the Company, the Agent, the Swing Line Bank
and each L/C Issuer agree in writing that a Bank is no longer a Defaulting
Lender, the Agent will so notify the parties hereto, whereupon as of the
effective date specified in such notice and subject to any conditions set forth
therein (which may include arrangements with respect to any Cash Collateral),
that Bank will, to the extent applicable, purchase at par that portion of
outstanding Loans of the other Banks or take such other actions as the Agent may
determine to be necessary to cause the Loans and funded and unfunded
participations in L/Cs and Swing Loans to be held pro rata by the Banks in
accordance with their respective Committed Percentages of the relevant
Commitments (without giving effect to Section 1.10(a)(iv)), whereupon such Bank
will cease to be a Defaulting Lender; provided that no adjustments will be made
retroactively with respect to fees accrued or payments made by or on behalf of
the Company while that Bank was a Defaulting Lender; and provided, further, that
except to the extent otherwise expressly agreed by the affected parties, no
change hereunder from Defaulting Lender to Bank will constitute a waiver or
release of any claim of any party hereunder arising from that Bank’s having been
a Defaulting Lender.

(c)    New Swing Loans/Letters of Credit. So long as any Bank is a Defaulting
Lender, (i) the Swing Line Bank shall not be required to fund any Swing Loans
unless it is satisfied that it will have no Fronting Exposure after giving
effect to such Swing Loan and (ii) no L/C Issuer shall be required to issue,
extend, renew or increase any L/C unless it is satisfied that it will have no
Fronting Exposure after giving effect thereto.

Section 1.11.    Cash Collateral for Fronting Exposure. At any time that there
shall exist a Defaulting Lender, within one (1) Business Day following the
written request of the Agent or any L/C Issuer (with a copy to the Agent) the
Defaulting Lender shall Cash Collateralize the L/C Issuers’ Fronting Exposure
with respect to such Defaulting Lender (determined after giving effect to
Section 1.10(a)(iv) and any Cash Collateral provided by such Defaulting Lender
pursuant to Section 1.10(a)(ii)) in an amount not less than the Minimum
Collateral Amount.

(a)    Grant of Security Interest. The Defaulting Lender hereby grants to the
Agent, for the benefit of the L/C Issuers, and agrees to maintain, a first
priority security interest in all such Cash Collateral as security for such
Defaulting Lender’s obligation to fund participations in respect of L/C
Obligations, to be applied pursuant to clause (b) below. If at any time the
Agent determines that Cash Collateral is subject to any right or claim of any
Person other than the Agent and the L/C Issuers as herein provided, or that the
total amount of such Cash Collateral is

 

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less than the Minimum Collateral Amount, the Defaulting Lender shall, promptly
upon demand by the Agent, pay or provide to the Agent additional Cash Collateral
in an amount sufficient to eliminate such deficiency (after giving effect to any
Cash Collateral provided by the Defaulting Lender pursuant to Section
1.10(a)(ii)).

(b)    Application. Notwithstanding anything to the contrary contained in this
Agreement, Cash Collateral provided under this Section 1.11 or Section 1.10 in
respect of L/Cs shall be applied to the satisfaction of the Defaulting Lender’s
obligation to fund participations in respect of L/C Obligations (including any
interest accrued on such obligation) for which the Cash Collateral was so
provided, prior to any other application of such property as may otherwise be
provided for herein.

(c)    Termination of Requirement. Cash Collateral (or the appropriate portion
thereof) provided to reduce any L/C Issuer’s Fronting Exposure shall no longer
be required to be held as Cash Collateral pursuant to this Section 1.11
following (i) the elimination of the applicable Fronting Exposure (including by
the termination of Defaulting Lender status of the applicable Bank), or (ii) the
determination by the Agent and each L/C Issuer that there exists excess Cash
Collateral.

 

SECTION 2. FEES, PREPAYMENTS AND TERMINATIONS.

Section 2.1.    Commitment Fee. For the period from the date hereof to and
including the Revolving Credit Termination Date or such earlier date on which
the Revolving Credit is terminated in whole pursuant to Section 2.5 hereof, the
Company shall pay to the Agent for the account of the Banks a commitment fee
with respect to the Revolving Credit at the annual rate equal to the Applicable
Margin in effect as of the time such fee is payable on the average daily unused
amount of the Banks’ Revolving Credit Commitments hereunder in effect from time
to time (but without reduction on account of any outstanding Swing Loans), all
such fees to be payable quarterly in arrears on the last day of each calendar
quarter (commencing on June 30, 2017), unless the Revolving Credit is terminated
in whole pursuant to Section 2.5 hereof on an earlier date, in which event the
commitment fee for the final period shall be paid on the date of such earlier
termination in whole, and all such fees to be computed on the basis of a year of
360 days and the actual number of days elapsed.

Section 2.2.    Agent’s Fee. The Company shall pay to and for the sole account
of the Agent fees in an amount and payable at such times as the Company and the
Agent may agree upon in writing, including without limitation the fees provided
for in the letter agreement dated March 31, 2017, from the Company to the Agent.
Such fee payments shall be in addition to any fees and charges the Agent may be
entitled to receive under Section 10 hereunder or under the other Loan
Documents.

Section 2.3.    Optional Prepayments. (a) The Company shall have the privilege
of prepaying without premium or penalty and in whole or in part (but if in part,
then in a minimum principal amount of $1,000,000 or such greater amount which is
an integral multiple of $100,000) any Domestic Rate Loan at any time upon prior
telex or telephonic notice to the Agent on or before 12:00 noon on the same
Business Day.

 

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(b)    The Company may prepay any Eurodollar Loan, subject to Section 9.4
hereof, which prepayment may be made in whole or in part (but, if in part, then
in an amount not less than $3,000,000 or such greater amount which is an
integral multiple of $500,000) upon three (3) Business Days’ prior notice to the
Agent (which notice shall be irrevocable once given, must be received by the
Agent no later than 11:00 a.m., Chicago time on the third Business Day preceding
the date of such prepayment and shall specify the principal amount to be
prepaid); provided, however, that after giving effect to any such prepayment the
outstanding principal amount of any such Eurodollar Loan prepaid in part shall
not be less than $3,000,000. Any such prepayment shall be effected by payment of
the principal amount to be prepaid and accrued interest thereon to the
prepayment date, plus any amount certified by any Bank to be payable under
Section 9.4 hereof with respect to such prepayment.

(c)    Any amount prepaid under the Revolving Credit may, subject to the terms
and conditions of this Agreement, be borrowed, repaid and borrowed again.

(d)    The Company may not voluntarily prepay any Swing Loan bearing interest at
a Swing Line Bank’s Quoted Rate before its scheduled maturity date.

Section 2.4.    Mandatory Prepayments. The Company shall not permit the sum of
the principal amount of all Revolving Credit Loans, Swing Loans, L/Cs and unpaid
Reimbursement Obligations at any time outstanding to exceed the Banks’ Revolving
Credit Commitments. The Company will make such payments on any outstanding Loans
and, if necessary, deposit with the Agent Cash Collateral for any then
outstanding L/Cs, which are necessary to cure any such excess within two
(2) Business Days after receipt of written notice from any Bank of the
occurrence thereof without any further notice or demand from the Agent or any of
the Banks, all of which are expressly waived by the Company. Any amount repaid
under the Revolving Credit may, subject to the terms and conditions of this
Agreement, be borrowed, repaid and borrowed again.

Section 2.5.    Terminations. The Company shall have the right at any time upon
five (5) Business Days’ (or such shorter period to which the Agent may agree)
prior written notice to the Agent to terminate the Revolving Credit without
penalty in whole or in part (but only in a minimum principal amount of
$5,000,000 or such greater amount which is an integral multiple of $5,000,000);
provided, however, that the Company may not terminate any portion of the
Revolving Credit which represents outstanding Revolving Credit Loans, Swing
Loans, L/Cs or Reimbursement Obligations. Each termination of the Revolving
Credit shall automatically terminate each Bank’s Revolving Credit Commitment by
its Commitment Percentage of such termination. Any termination of the Revolving
Credit pursuant to this Section may not be reinstated.

 

SECTION 3. PLACE AND APPLICATION OF PAYMENTS.

All payments of principal and interest made by the Company in respect of the
Notes, Reimbursement Obligations and all fees payable by the Company hereunder,
shall be made to the Agent at its principal office in Chicago, Illinois and in
immediately available funds, prior to 12:00 noon on the date such payment is due
without set-off, counterclaim or deduction other than

 

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those permitted or required by Section 11.21. Any payments received after 12:00
noon Chicago time (or after such later time as the Banks may otherwise direct)
shall be deemed received upon the following Business Day. The Agent shall remit
to each Bank its proportionate share of each payment of principal, interest and
fees, received by the Agent, on the same Business Day on which such payment is
received before 12:00 noon, Chicago time, or is deemed to have been received by
the Agent. In the event the Agent does not remit any amount to any Bank when
required by the preceding sentence, the Agent shall pay to such Bank interest on
such amount until paid at a rate per annum equal to the Fed Funds Rate. The
Company hereby authorizes the Agent to automatically debit its general operating
account with the Agent or one of its Affiliates for any principal, interest and
fees when due from the Company under the Notes or this Agreement and to transfer
the amount so debited from such account to the Agent for application as herein
provided, but the Agent shall give prompt telephonic notice thereof to the
Company.

 

SECTION 4. DEFINITIONS.

The terms hereinafter set forth when used herein shall have the following
meanings:

“Adjusted Eurodollar Rate” means a rate per annum determined pursuant to the
following formula:

 

Adjusted Eurodollar Rate    =   

Eurodollar Rate

        

100% - Reserve Percentage

  

“Administrative Questionnaire” means an Administrative Questionnaire in a form
supplied by the Agent.

“Affiliate” means, with respect to any Person, another Person that directly or
indirectly Controls, is Controlled by, or is under common control with the
Person specified.

“Agent” means BMO Harris Bank N.A., in its capacity as Agent hereunder, and any
successor in such capacity pursuant to Section 10.7 hereof.

“Agreement” shall mean this Credit Agreement as supplemented and amended from
time to time.

“Anniversary Date” shall mean October 31 in each calendar year during the term
of this Agreement.

 

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“Applicable Margin” with respect to Domestic Rate Loans, Eurodollar Loans, the
L/C Participation Fee payable pursuant to Section 1.6(a) hereof, and the
commitment fee payable under Section 2.1 hereof, shall each mean the rate
specified for such obligation below in Levels I, II, III and IV for the range of
Leverage Ratio specified for each Level:

 

     LEVEL I   LEVEL II   LEVEL III   LEVEL IV

Leverage Ratio

   <25%   > 25% and
<35%   > 35% and
<45%   >
45%

Eurodollar Loans and L/C Participation Fee

   1.25%   1.50%   2.00%   2.50%

Domestic Rate Loans

   0.25%   0.50%   1.00%   1.50%

Commitment Fee

   0.20%   0.25%   0.30%   0.35%

Not later than ten (10) Business Days after receipt by the Banks of the
Compliance Certificate called for by Section 7.4(c) hereof for the applicable
fiscal quarter (commencing with the fiscal quarter ending April 30, 2017), the
Agent shall determine the Leverage Ratio for the applicable period and shall
promptly notify the Company of such determination and of any change in the
Applicable Margins resulting therefrom. Any such change in the Applicable
Margins shall be effective as of the date the Agent so notifies the Company with
respect to all Loans outstanding and L/C Participation Fees and commitment fees
payable, on such date, and such new Applicable Margins shall continue in effect
until the effective date of the next quarterly redetermination in accordance
with this Section. Each determination of the Leverage Ratio and Applicable
Margins by the Agent in accordance with this Section shall be conclusive and
binding on the Company absent manifest error. From the date hereof until the
Applicable Margins are first adjusted pursuant hereto, the Applicable Margins
shall be those set forth in Level I above.

“Approved Fund” means any Fund that is administered or managed by (a) a Bank,
(b) an Affiliate of a Bank, or (c) an entity or an Affiliate of an entity that
administers or manages a Bank.

“Assignment and Acceptance” means an assignment and acceptance entered into by a
Bank and an Eligible Assignee (with the consent of any party whose consent is
required by Section 11.17 hereof), and accepted by the Agent, in substantially
the form of Exhibit I or any other form approved by the Agent.

“Bank” and “Banks” means and includes BMO Harris Financing, Inc. and the other
financial institutions from time to time party to this Agreement, including each
Person that becomes a Bank pursuant to Section 1.1(c) hereof and each assignee
Bank pursuant to Section 11.17 hereof, and unless the context otherwise
requires, the Swing Line Bank.

“Business Day” shall mean any day except Saturday or Sunday on which banks are
open for business in Chicago, Illinois and, with respect to Eurodollar Loans,
dealing in United States dollar deposits in London, England and Nassau, Bahamas.

“Capitalized Lease” shall mean any lease or obligation for rentals which is
required to be capitalized on a consolidated balance sheet of the Company and
its Subsidiaries in accordance with generally accepted accounting principles.

 

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“Cash Collateralize” means, to pledge and deposit with or deliver to the Agent,
for the benefit of one or more of the L/C Issuer or Banks, as collateral for L/C
Obligations or obligations of Banks to fund participations in respect of L/C
Obligations, cash or deposit account balances subject to a first priority
perfected security interest in favor of the Agent or, if the Agent and each
applicable L/C Issuer shall agree in their sole discretion, other credit
support, in each case pursuant to documentation in form and substance
satisfactory to the Agent and each applicable L/C Issuer. “Cash Collateral”
shall have a meaning correlative to the foregoing and shall include the proceeds
of such cash collateral and other credit support.

“CERCLA” shall mean the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended from time to time.

“CERCLIS” shall mean the CERCLA data base created and maintained by the United
States Environmental Protection Agency pursuant to CERCLA.

“Change in Law” shall have the meaning specified in Section 9.3 hereof.

“Change of Control” means any of (a) the acquisition by any “person” or “group”
(as such terms are used in sections 13(d) and 14(d) of the Securities Exchange
Act of 1934, as amended) at any time of beneficial ownership of a majority of
the voting power in the elections of directors, other than any employee stock
ownership plan established by the Company, or (b) the failure of individuals who
are members of the board of directors (or similar governing body) of the Company
on March 31, 2017 (together with any new or replacement directors whose initial
nomination for election was approved by a majority of the directors who were
either directors on such date or previously so approved) to constitute a
majority of the board of directors (or similar governing body) of the Company.

“Code” means the Internal Revenue Code of 1986, as amended from time to time, or
any successor legislation.

“Collateral Account” shall have the meaning specified in Section 1.6(g).

“Commitment” shall mean a Revolving Credit Commitment of any Bank, and
“Commitments” shall mean the Revolving Credit Commitment of a Bank or Banks.

“Commitment Percentage” means, for each Bank, the percentage of the Revolving
Credit Commitments represented by such Bank’s Revolving Credit Commitment or, if
the Revolving Credit Commitments have been terminated, the percentage held by
such Bank (including through participation interests in Reimbursement
Obligations) of the aggregate principal amount of all Revolving Credit Loans,
L/Cs and Reimbursement Obligations then outstanding.

“Commodity Exchange Act” means the Commodity Exchange Act (7 U.S.C. § 1 et
seq.), as amended from time to time, and any successor statute.

 

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“Connection Income Taxes” means Other Connection Taxes that are imposed on or
measured by net income (however denominated) or that are franchise Taxes or
branch profit Taxes.

“Control” means the possession, directly or indirectly, of the power to direct
or cause the direction of the management or policies of a Person, whether
through the ability to exercise voting power, by contract or otherwise.
“Controlling” and “Controlled” have meanings correlative thereto. Without
limiting the generality of the foregoing, a Person shall be deemed Controlled by
another Person if such other Person possesses, directly or indirectly, the power
to vote ten percent (10%) or more of the securities having ordinary voting power
for the election of directors or the equivalent.

“Company” shall have the meaning specified in the first paragraph of this
Agreement.

“Consolidated Deferred Income Taxes” shall mean, for any period, all deferred
federal, state or other income taxes of the Company and its Subsidiaries for
such period as shown on the most recent financial statements of the Company.

“Consolidated Indebtedness for Borrowed Money” shall mean, with respect to the
Company, all Indebtedness for Borrowed Money (as defined herein) of the Company
and its Subsidiaries determined on a consolidated basis in accordance with
generally accepted accounting principles consistently applied.

“Consolidated Net Income” for any period shall mean net income of the Company
and its Subsidiaries as determined and computed on a consolidated basis
according to generally accepted accounting principles (as defined herein),
consistently applied.

“Consolidated Net Worth” shall mean as of any time the same is to be determined
the aggregate of capital (including without limitation redeemable preferred
stock), surplus (exclusive of any surplus arising by virtue of any appraisal or
revaluation of any assets) and retained earnings of the Company and its
Subsidiaries as determined on a consolidated basis in accordance with generally
accepted accounting principles (as defined herein) consistently applied.

“Consolidated Tangible Net Worth” shall mean Consolidated Net Worth less the
amount of all Intangible Assets of the Company and its Subsidiaries determined
on a consolidated basis in accordance with generally accepted accounting
principles, consistently applied.

“Debtor Relief Laws” means the Bankruptcy Code of the United States of America,
and all other liquidation, conservatorship, bankruptcy, assignment for the
benefit of creditors, moratorium, rearrangement, receivership, insolvency,
reorganization, or similar debtor relief laws of the United States or other
applicable jurisdictions from time to time in effect.

“Defaulting Lender” means, subject to Section 1.10(b), any Bank that (a) has
failed to (i) fund all or any portion of its Loans within two (2) Business Days
of the date such Loans were required to be funded hereunder unless such Bank
notifies the Agent and the Company in writing

 

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that such failure is the result of such Bank’s determination that one or more
conditions precedent to funding (each of which conditions precedent, together
with any applicable default, shall be specifically identified in such writing)
has not been satisfied, or (ii) pay to the Agent, any L/C Issuer, the Swing Line
Bank or any other Bank any other amount required to be paid by it hereunder
(including in respect of its participation in L/Cs or Swing Loans) within two
(2) Business Days of the date when due, (b) has notified the Company, the Agent,
any L/C Issuer or the Swing Line Bank in writing that it does not intend to
comply with its funding obligations hereunder, or has made a public statement to
that effect (unless such writing or public statement relates to such Bank’s
obligation to fund a Loan hereunder and states that such position is based on
such Bank’s determination that a condition precedent to funding (which condition
precedent, together with any applicable default, shall be specifically
identified in such writing or public statement) cannot be satisfied), (c) has
failed, within three (3) Business Days after written request by the Agent or the
Company, to confirm in writing to the Agent and the Company that it will comply
with its prospective funding obligations hereunder (provided that such Bank
shall cease to be a Defaulting Lender pursuant to this clause (c) upon receipt
of such written confirmation by the Agent and the Company), or (d) has, or has a
direct or indirect parent company that has, at any time after the date of this
Agreement (i) become the subject of a proceeding under any Debtor Relief Law, or
(ii) had appointed for it a receiver, custodian, conservator, trustee,
administrator, assignee for the benefit of creditors or similar Person charged
with reorganization or liquidation of its business or assets, including the
Federal Deposit Insurance Corporation or any other state or federal regulatory
authority acting in such a capacity; provided that a Bank shall not be a
Defaulting Lender solely by virtue of the ownership or acquisition of any equity
interest in that Bank or any direct or indirect parent company thereof by a
Governmental Authority so long as such ownership interest does not result in or
provide such Bank with immunity from the jurisdiction of courts within the
United States or from the enforcement of judgments or writs of attachment on its
assets or permit such Bank (or such Governmental Authority) to reject,
repudiate, disavow or disaffirm any contracts or agreements made with such Bank.
Any determination by the Agent that a Bank is a Defaulting Lender under clauses
(a) through (d) above shall be conclusive and binding absent manifest error, and
such Bank shall be deemed to be a Defaulting Lender (subject to Section 1.10(b))
upon delivery of written notice of such determination to the Company, the L/C
Issuer, the Swing Line Bank and each Bank.

“Domestic Rate” means, for any day, the rate per annum equal to the greatest of:
(a) the rate of interest announced or otherwise established by the Agent from
time to time as its prime commercial rate as in effect on such day, with any
change in the Domestic Rate resulting from a change in said prime commercial
rate to be effective as of the date of the relevant change in said prime
commercial rate (it being acknowledged and agreed that such rate may not be the
Agent’s best or lowest rate), (b) the sum of (i) the rate determined by the
Agent to be the average (rounded upward, if necessary, to the next higher 1/100
of 1%) of the rates per annum quoted to the Agent at approximately 10:00 a.m.
(Chicago time) (or as soon thereafter as is practicable) on such day (or, if
such day is not a Business Day, on the immediately preceding Business Day) by
two or more Federal funds brokers selected by the Agent for sale to the Agent at
face value of Federal funds in the secondary market in an amount equal or
comparable to the principal amount for which such rate is being determined, plus
(ii) 1/2 of 1%, and (c) the LIBOR Quoted Rate for such day plus 1.00%. As used
herein, the term “LIBOR Quoted Rate” means, for any day, the

 

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rate per annum equal to quotient of (i) the rate per annum (rounded upwards, if
necessary, to the next higher one hundred-thousandth of a percentage point) for
deposits in U.S. Dollars for a one-month interest period as reported on the
applicable Bloomberg screen page (or such other commercially available source
providing such quotations as may be agreed to by the Agent and Company from time
to time if Bloomberg is not available) as of 11:00 a.m. (London, England time)
on such day (or, if such day is not a Business Day, on the immediately preceding
Business Day) divided by (ii) one (1) minus the Reserve Percentage, provided
that in no event shall the “LIBOR Quoted Rate” be less than 0.00%.

“Domestic Rate Loan” means a Revolving Credit Loan which bears interest as
provided in Section 1.4(a) hereof.

“Economic Development Bonds” means any industrial revenue bonds, economic
development bonds or other similar notes, debentures or instruments issued by or
on behalf of a governmental entity, unit or authority for the benefit of the
Company or a Subsidiary for the purpose of financing or refinancing Property
(including by means of a sale and leaseback or similar transaction involving
Property of the Company or a Subsidiary).

“Eligible Assignee” means (a) a Bank, (b) an Affiliate of a Bank, (c) an
Approved Fund, and (d) any other Person (other than a natural person) approved
by (i) the Agent, (ii) in the case of any assignment of a Commitment, the
L/C Issuers, and (iii) unless an Event of Default has occurred and is
continuing, the Company (each such approval not to be unreasonably withheld or
delayed); provided that notwithstanding the foregoing, “Eligible Assignee” shall
not include the Company or any Subsidiary or any of the Company’s or such
Subsidiary’s Affiliates or Subsidiaries.

“Environmental Laws” shall mean all applicable federal, state and local
environmental, health and safety statutes and regulations.

“ERISA” shall mean the Employee Retirement Income Security Act of 1974, as
amended.

“Eurodollar Loan” means a Revolving Credit Loan which bears interest as provided
in Section 1.4(b) hereof.

“Eurodollar Rate” shall mean for each Interest Period applicable to a Eurodollar
Loan, (a) the LIBOR Index Rate for such Interest Period, if such rate is
available, and (b) if the LIBOR Index Rate cannot be determined, the arithmetic
average of the rates of interest per annum (rounded upwards, if necessary, to
nearest 1/100 of 1%) at which deposits in U.S. dollars in immediately available
funds are offered to the Agent at 11:00 a.m. (London, England time) two
(2) Business Days before the beginning of such Interest Period by three (3) or
more major banks in the interbank eurodollar market for a period equal to such
Interest Period and in an amount equal or comparable to the principal amount of
the Eurodollar Loan scheduled to be made by the Agent during such Interest
Period, provided that in no event shall the Eurodollar Rate be less than 0.00%.

 

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“Event of Default” shall mean any event or condition identified as such in
Section 8.1 hereof.

“Excluded Swap Obligation” means, with respect to any Guarantor Subsidiary, any
Swap Obligation if, and to the extent that, all or a portion of the Guarantee of
such Guarantor Subsidiary of, or the grant by such Guarantor Subsidiary of a
security interest to secure, such Swap Obligation (or any Guarantee thereof) is
or becomes illegal under the Commodity Exchange Act or any rule, regulation or
order of the Commodity Futures Trading Commission (or the application or
official interpretation of any thereof) by virtue of such Guarantor Subsidiary’s
failure for any reason not to constitute an “eligible contract participant” as
defined in the Commodity Exchange Act and the regulations thereunder at the time
the Guarantee of such Guarantor Subsidiary or the grant of such security
interest becomes effective with respect to such related Swap Obligation. If a
Swap Obligation arises under a master agreement governing more than one swap,
such exclusion shall apply only to the portion of such Swap Obligation that is
attributable to swaps for which such Guarantee or security interest is or
becomes illegal.

“Excluded Taxes” means any of the following Taxes imposed on or with respect to
a Recipient or required to be withheld or deducted from a payment to a
Recipient, (a) Taxes imposed on or measured by net income (however denominated),
franchise Taxes, and branch profits Taxes, in each case, (i) imposed as a result
of such Recipient being organized under the laws of, or having its principal
office or, in the case of any Bank, its applicable lending office located in,
the jurisdiction imposing such Tax (or any political subdivision thereof) or
(ii) that are Other Connection Taxes, (b) in the case of a Bank, U.S. federal
withholding Taxes imposed on amounts payable to or for the account of such Bank
with respect to an applicable interest in a Loan or Commitment pursuant to a law
in effect on the date on which (i) such Bank acquires such interest in the Loan
or Commitment (other than pursuant to an assignment request by the Company under
Section 1.9) or (ii) such Bank changes its lending office, except in each case
to the extent that, pursuant to Section 11.21 amounts with respect to such Taxes
were payable either to such Bank’s assignor immediately before such Bank became
a party hereto or to such Bank immediately before it changed its lending office,
(c) Taxes attributable to such Recipient’s failure to comply with
Section 11.21(g), and (d) any U.S. federal withholding Taxes imposed under
FATCA.

“Existing Agreement” shall mean the Credit Agreement dated as of April 24, 2015,
among the Company, BMO Harris Bank N.A., individually as an L/C Issuer and as
agent thereunder, and the other banks and financial institutions party thereto,
as Banks (the banks named or referred to are the “Existing Lenders”).

“Existing L/C Issuer” means BMO Harris Bank N.A.

“Existing L/Cs” is defined in Section 1.6(b)

“FATCA” means Sections 1471 through 1474 of the Code, as of the date of this
Agreement (or any amended or successor version that is substantively comparable
and not materially more onerous to comply with), any current or future
regulations or official interpretations thereof, and any agreements entered into
pursuant to Section 1471(b)(1) of the Code.

 

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“Fed Funds Rate” shall have the meaning specified in Section 1.5(c) hereof.

“Foreign Lender” means a Bank that is not a U.S. Person.

“Fronting Exposure” means, at any time there is a Defaulting Lender, (a) with
respect to any L/C Issuer, such Defaulting Lender’s Percentage of the
outstanding L/C Obligations with respect to L/Cs issued by such L/C Issuer other
than L/C Obligations as to which such Defaulting Lender’s participation
obligation has been reallocated to other Banks or Cash Collateralized in
accordance with the terms hereof, and (b) with respect to the Swing Line Bank,
such Defaulting Lender’s Percentage of outstanding Swing Loans made by the Swing
Line Bank other than Swing Loans as to which such Defaulting Lender’s
participation obligation has been reallocated to other Banks.

“Fund” means any Person (other than a natural person) that is (or will be)
engaged in making, purchasing, holding or otherwise investing in commercial
loans and similar extensions of credit in the ordinary course of its business.

“generally accepted accounting principles” shall mean generally accepted
accounting principles consistently applied and maintained throughout the period
indicated and consistent with the latest audited consolidated financial
statements delivered to the Banks pursuant to Section 7.4.

“Governmental Authority” means the government of the United States of America or
any other nation, or of any political subdivision thereof, whether state or
local, and any agency, authority, instrumentality, regulatory body, court,
central bank or other entity exercising executive, legislative, judicial,
taxing, regulatory or administrative powers or functions of or pertaining to
government (including any supra-national bodies such as the European Union or
the European Central Bank).

“Guarantee” of or by any Person (the “guarantor”) means any obligation,
contingent or otherwise, of the guarantor guaranteeing or having the economic
effect of guaranteeing any indebtedness or other obligation of any other Person
(the “primary obligor”) in any manner, whether directly or indirectly, and
including any obligation of the guarantor, direct or indirect, (a) to purchase
or pay (or advance or supply funds for the purchase or payment of) such
Indebtedness or other obligation or to purchase (or to advance or supply funds
for the purchase of) any security for the payment thereof, (b) to purchase or
lease property, securities or services for the purpose of assuring the owner of
such Indebtedness or other obligation of the payment thereof, (c) to maintain
working capital, equity capital or any other financial statement condition or
liquidity of the primary obligor so as to enable the primary obligor to pay such
indebtedness or other obligation, or (d) as an account party in respect of any
letter of credit or letter of guaranty issued to support such indebtedness or
obligation; provided, that the term Guarantee shall not include endorsements for
collection or deposit in the ordinary course of business.

 

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“Guarantor Subsidiaries” shall mean collectively Sanderson Farms, Inc. (Foods
Division), Sanderson Farms, Inc. (Production Division), Sanderson Farms, Inc.
(Processing Division) and any Material Subsidiary which has complied with
Section 7.8 hereof, so long as each such corporation is a party to the
Subsidiary Guaranty, and “Guarantor Subsidiary” shall mean any of the Guarantor
Subsidiaries.

“Indebtedness for Borrowed Money” of any Person shall mean the aggregate
principal amount, without duplication and without giving effect to intercompany
transactions that would be eliminated in preparing consolidated financial
statements of the Company and its Subsidiaries in accordance with generally
accepted accounting principles, consistently applied, of:

(a)    all indebtedness, obligations and liabilities of such Person with respect
to borrowed money;

(b)    all Guarantees, endorsements and other contingent obligations of such
Person with respect to indebtedness arising from money borrowed by others;

(c)    all reimbursement and other obligations with respect to letters of credit
that have been funded and all indebtedness, obligations and liabilities with
respect to bankers’ acceptances;

(d)    the amount shown on such Person’s balance sheet with respect to
Capitalized Leases; and

(e)    all indebtedness, obligations and liabilities representing the deferred
purchase price of property, except for trade payables on ordinary business
terms;

provided that for purposes of determining compliance with the financial
covenants contained in Sections 7.9, 7.10 and 7.11 of this Agreement, the term
“Indebtedness for Borrowed Money” shall not include indebtedness relating to the
Economic Development Bonds so long as the Company or a Subsidiary of the Company
is the holder of such Economic Development Bonds.

“Indemnified Taxes” means (a) all Taxes other than Excluded Taxes, imposed on or
with respect to any payment made by or on account of any obligation of any Loan
Party under any Loan Document, and (b) to the extent not otherwise described in
(a), Other Taxes that are not Excluded Taxes.

“Intangible Assets” shall mean amortizable loan costs, business acquisition
costs, license agreements, trademarks, trade names, patents, capitalized
research and development, proprietary products (the results of past research and
development treated as long term assets and excluded from inventory), goodwill
and all other assets which would be classified as intangible assets (all
determined in accordance with generally accepted accounting principles
consistently applied).

“Interest Period” shall mean (a) with respect to any Eurodollar Loan, the period
used for the computation of interest commencing on the date the relevant
Eurodollar Loan is made, continued or effected by conversion and concluding on
the date one, two, three or six months

 

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thereafter as selected by the Company in its notice as provided herein, and
(b) with respect to any Swing Loan at the Swing Line Bank’s Quoted Rate, the
period used for the computation of interest commencing on the date the relevant
Swing Loan is made and concluding on the date 1 to 10 days thereafter as
selected by the Company in its notice as provided herein, provided that all of
the foregoing provisions relating to Interest Periods are subject to the
following:

(i)    if any Interest Period would otherwise end on a day which is not a
Business Day, that Interest Period shall be extended to the next succeeding
Business Day, unless in the case of an Interest Period for a Eurodollar Loan the
result of such extension would be to carry such Interest Period into another
calendar month in which event such Interest Period shall end on the immediately
preceding Business Day;

(ii)    no Interest Period may extend beyond the Revolving Credit Termination
Date;

(iii)    the interest rate to be applicable to each Eurodollar Loan or Swing
Loan at the Swing Line Bank’s Quoted Rate for each Interest Period shall apply
from and including the first day of such Interest Period to but excluding the
last day thereof; and

(iv)    no Interest Period may be selected if after giving effect thereto the
Company will be unable to make a principal payment scheduled to be made during
such Interest Period without paying part of a Eurodollar Loan on a date other
than the last day of the Interest Period applicable thereto.

For purposes of determining an Interest Period, a month means a period starting
on one day in a calendar month and ending on a numerically corresponding day in
the next calendar month, provided, however, if an Interest Period begins on the
last day of a month or if there is no numerically corresponding day in the month
in which an Interest Period is to end, then such Interest Period shall end on
the last Business Day of such month.

“IRS” means the United States Internal Revenue Service.

“L/C” and “L/Cs” shall have the meanings specified in Section 1.6(a) hereof.

“L/C Agreement” and “L/C Agreements” shall have the meanings specified in
Section 1.6(a) hereof.

“L/C Issuer” means (a) the Existing L/C Issuer with respect to Existing L/Cs,
(b) BMO Harris Bank N.A. (or an Affiliate thereof) or another Bank designated by
the Company and approved by the Agent for any L/Cs issued under this Agreement,
each in their capacity as the issuer of L/Cs hereunder, and (c) their successors
in such capacity.

“L/C Obligations” means the aggregate undrawn face amounts of all outstanding
L/Cs and all unpaid Reimbursement Obligations.

 

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“L/C Participation Fee” shall have the meaning specified in Section 1.6(a)
hereof.

“Leverage Ratio” shall have the meaning specified in Section 7.10 hereof.

“LIBOR Index Rate” shall mean, for any Interest Period applicable to a
Eurodollar Loan, the rate per annum (rounded upwards, if necessary, to the next
higher one hundred-thousandth of a percentage point) for deposits in U.S.
Dollars for a period equal to such Interest Period as reported on the applicable
Bloomberg screen page (or such other commercially available source providing
such quotations as may be agreed to by Agent and Company from time to time if
Bloomberg is not available) as of 11:00 a.m. (London, England time) on the day
two (2) Business Days before the commencement of such Interest Period.

“Loan” shall mean a Revolving Credit Loan or a Swing Loan and “Loans” shall mean
any two or more Revolving Credit Loans or Swing Loans.

“Loan Documents” shall mean this Agreement and any and all exhibits hereto, the
Notes, the L/C Agreements and the Subsidiary Guaranty.

“Long Term Indebtedness for Borrowed Money” shall mean Indebtedness for Borrowed
Money which would be classified as long term indebtedness in accordance with
generally accepted accounting principles, consistently applied.

“Material Adverse Effect” means a material adverse change in, or material
adverse effect upon, the operations, business, Property, or condition (financial
or otherwise) of the Company and its Subsidiaries taken as a whole, except that
in determining whether such a change or effect has occurred, any such change or
effect that results primarily from general economic conditions or conditions
affecting the poultry industry generally shall be disregarded entirely.

“Material Subsidiary” shall mean each Subsidiary whose assets have a book value
in excess of 5% of the aggregate book value of the total assets of the Company
and its Subsidiaries on a consolidated basis in accordance with generally
accepted accounting principles, consistently applied.

“Minimum Collateral Amount” means, at any time, (a) with respect to Cash
Collateral consisting of cash or deposit account balances, an amount equal to
105% of the Fronting Exposure of all L/C Issuers with respect to L/Cs issued and
outstanding at such time, and (b) otherwise, an amount determined by the Agent
and the L/C Issuer in their sole discretion.

“Net Proceeds of Stock” shall mean an amount (but not less than zero) equal to
the change in the Company’s Consolidated Tangible Net Worth resulting from any
transaction in which the Company or any Subsidiary issues shares of its capital
stock, determined on a pro forma basis in accordance with generally accepted
accounting principles consistently applied.

“Non-Defaulting Lender” means, at any time, each Bank that is not a Defaulting
Lender at such time.

 

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“Note” shall mean either a Revolving Note or the Swing Note, and “Notes” shall
mean any two or more Revolving Notes or the Swing Note.

“OFAC” means the United States Department of Treasury Office of Foreign Assets
Control.

“OFAC Event” means the event specified in Section 7.12(c) hereof.

“OFAC Sanctions Programs” means all laws, regulations, and Executive Orders
administered by OFAC, including without limitation, the Bank Secrecy Act,
anti-money laundering laws (including, without limitation, the Uniting and
Strengthening America by Providing Appropriate Tools Required to Intercept and
Obstruct Terrorism Act of 2001, Pub. L. 107-56 (a/k/a the USA Patriot Act)), and
all economic and trade sanction programs administered by OFAC, any and all
similar United States federal laws, regulations or Executive Orders, and any
similar laws, regulators or orders adopted by any State within the United
States.

“OFAC SDN List” means the list of the Specially Designated Nationals and Blocked
Persons maintained by OFAC.

“Other Connection Taxes” means, with respect to any Recipient, Taxes imposed as
a result of a present or former connection between such Recipient and the
jurisdiction imposing such Tax (other than connections arising from such
Recipient having executed, delivered, become a party to, performed its
obligations under, received payments under, received or perfected a security
interest under, engaged in any other transaction pursuant to or enforced any
Loan Document, or sold or assigned an interest in any Loan or Loan Document).

“Other Taxes” means all present or future stamp, court or documentary,
intangible, recording, filing or similar Taxes that arise from any payment made
under, from the execution, delivery, performance, enforcement or registration
of, from the receipt or perfection of a security interest under, or other
similar Tax with respect to, any Loan Document, except any such Taxes that are
Other Connection Taxes imposed with respect to an assignment (other than an
assignment made pursuant to Section 1.9).

“Person” shall mean and include any individual, sole proprietorship,
partnership, joint venture, trust, unincorporated organization, association,
corporation, institution, entity, party or government (whether national,
federal, state, county, city, municipal, or otherwise, including, without
limitation, any instrumentality, division, agency, body or department thereof).

“PBGC” shall mean the Pension Benefit Guaranty Corporation.

“Plan” shall mean any employee benefit plan covering any officers or employees
of the Company or any Subsidiary, any benefits of which are, or are required to
be, guaranteed by the PBGC.

 

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“Potential Default” shall mean any event or condition specified in Section
8.1(a)(ii), (d), (e), (g), (h), (i) and (k) which, with the lapse of time, or
giving of notice, or both, would constitute an Event of Default.

“Property” shall mean all assets and properties of any nature whatsoever,
whether real or personal, tangible or intangible.

“Qualified ECP Guarantor” means, in respect of any Swap Obligation, each of the
Company or Guarantor Subsidiary that has total assets exceeding $10,000,000 at
the time the relevant Guarantee or grant of the relevant security interest
becomes effective with respect to such Swap Obligation or such other person as
constitutes an “eligible contract participant” under the Commodity Exchange Act
or any regulations promulgated thereunder and can cause another person to
qualify as an “eligible contract participant” at such time by entering into a
keepwell under Section 1a(18)(A)(v)(II) of the Commodity Exchange Act.

“Recipient” means (a) the Agent, (b) any Bank, and (c) any L/C Issuer, as
applicable.

“Reimbursement Obligation” shall have the meaning set forth in Section 1.7
hereof.

“Required Banks” means, as of the date of determination thereof, Banks whose
outstanding Loans and interests in L/Cs and Reimbursement Obligations and unused
Revolving Credit Commitments constitute more than 50% of the sum of the total
outstanding Loans, interests in L/Cs and Reimbursement Obligations, and unused
Revolving Credit Commitments of the Banks. To the extent provided in the last
paragraph of Section 11.1, the Loans and interests in L/Cs and Reimbursement
Obligations and unused Revolving Credit Commitments of any Defaulting Lender
shall be disregarded in determining Required Banks at any time.

“Reserve Percentage” means the daily arithmetic average maximum rate at which
reserves (including, without limitation, any supplemental, marginal and
emergency reserves) are imposed on member banks of the Federal Reserve System
during the applicable Interest Period by the Board of Governors of the Federal
Reserve System (or any successor) under Regulation D on “eurocurrency
liabilities” (as such term is defined in Regulation D), subject to any
amendments of such reserve requirement by such Board or its successor, taking
into account any transitional adjustments thereto. For purposes of this
definition, the Eurodollar Loans shall be deemed to be Eurocurrency liabilities
as defined in Regulation D without benefit or credit for any prorations,
exemptions or offsets under Regulation D.

“Revolving Credit” shall have the meaning specified in Section 1.1(a).

“Revolving Credit Commitment” means, as to any Bank, the obligation of such Bank
to make Revolving Credit Loans and to participate in Swing Loans and L/Cs issued
for the account of the Company hereunder in an aggregate principal or face
amount at any one time outstanding not to exceed the amount set forth opposite
such Bank’s name on Schedule 1 attached hereto and made a part hereof, as the
same may be reduced or modified at any time or from time to time pursuant to the
terms hereof. The Company and the Banks acknowledge and agree that the Revolving
Credit Commitments of the Banks aggregate $900,000,000 on the date hereof.

 

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“Revolving Credit Loan” and “Revolving Credit Loans” shall have the meanings
specified in Section 1.1(a) hereof.

“Revolving Credit Termination Date” shall have the meaning set forth in Section
1.1(a) hereof.

“Revolving Note” or “Revolving Notes” shall have the meanings specified in
Section 1.2 hereof.

“Subsidiary” shall mean any corporation or other entity at least a majority of
the outstanding voting stock (or equivalent) of which is at the time owned
directly or indirectly by the Company and/or its Subsidiaries.

“Subsidiary Guaranty” shall mean the Guaranty Agreement of the Guarantor
Subsidiaries in the form of Exhibit D hereto.

“Swap Obligation” means, with respect to any Guarantor Subsidiary, any
obligation to pay or perform under any agreement, contract or transaction that
constitutes a “swap” within the meaning of Section 1a(47) of the Commodity
Exchange Act.

“Swing Line Bank” means BMO Harris Financing, Inc., acting in its capacity as
the Lender of Swing Loans hereunder, or any successor Bank acting in such
capacity appointed pursuant to Section 11.17 hereof.

“Swing Line Bank’s Quoted Rate” is defined in Section 1.3(c) hereof.

“Swing Line Sublimit” means $10,000,000, as reduced pursuant to the terms
hereof.

“Swing Loan” and “Swing Loans” each is defined in Section 1.3 hereof.

“Swing Note” shall have the meaning specified in Section 1.3(a) hereof.

“Taxes” means all present or future taxes, levies, imposts, duties, deductions,
withholdings (including backup withholding), assessments, fees or other charges
imposed by any Governmental Authority, including any interest, additions to tax
or penalties applicable thereto.

“Total Capitalization” shall mean the sum of (a) the outstanding principal
amount of Consolidated Indebtedness for Borrowed Money, plus (b) Consolidated
Tangible Net Worth.

“U.S. Person” means any Person that is a “United States Person” as defined in
Section 7701(a)(30) of the Code.

“U.S. Tax Compliance Certificate” has the meaning assigned to such term in
subsection (f) of Section 11.21.

“Withholding Agent” means the Company, any Guarantor Subsidiary and the Agent.

 

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SECTION 5. REPRESENTATIONS AND WARRANTIES.

The Company represents and warrants to the Banks as follows:

Section 5.1.    Organization and Qualification. The Company is duly organized
and validly existing under the laws of the State of Mississippi, has full and
adequate corporate power to carry on its business as now conducted, is duly
licensed or qualified in all jurisdictions wherein the failure to be so licensed
or qualified would have a Material Adverse Effect, has full corporate right,
power and authority to enter into this Agreement and the other Loan Documents to
which it is a party, to make the borrowings herein provided for and encumber its
assets as collateral security therefor, to execute and issue the Notes in
evidence thereof, and to perform its obligations under the Loan Documents; and
the Company’s execution of this Agreement does not, nor does the performance or
observance by the Company of any of the matters or things provided for in this
Agreement and the other Loan Documents, contravene any provision of law or any
charter or by-law provision or any covenant, indenture or agreement of or
judgment, order or decree applicable to or affecting the Company or any of its
Property.

Section 5.2.    Financial Reports. The Company has heretofore delivered to the
Agent a copy of the annual audit report as of October 31, 2016, of the Company
and its Subsidiaries and unaudited financial statements of the Company and its
Subsidiaries as of, and for the three (3) month period ended January 31, 2017.
Such financial statements have been prepared in accordance with generally
accepted accounting principles (except that such unaudited financial statements
may omit any footnotes), on a basis consistent, except as otherwise noted
therein, with that of the previous fiscal year or period and fairly reflect the
financial position of the Company as of the dates thereof, and the results of
its operations for the periods covered thereby, and as of the respective dates
of such financial statements the Company and its Subsidiaries had no significant
known contingent liabilities required to be disclosed in financial statements or
notes thereto under generally accepted accounting principles other than as
indicated on said financial statements or notes thereto or otherwise disclosed
in writing to the Banks prior to the execution of this Agreement. Since
January 31, 2017, there has been no Material Adverse Effect, except those
disclosed in the Company’s reports under the Securities Exchange Act of 1934, as
amended, and filed prior to the date of this Agreement or in writing to the
Banks prior to the date of this Agreement.

Section 5.3.    Litigation; Tax Returns; Approvals. There is no known
litigation, labor controversy or governmental proceeding pending, nor to the
best knowledge of the Company threatened, against the Company or any Subsidiary
which can reasonably be expected to result in any Material Adverse Effect,
except for such litigation, labor controversies, and/or governmental proceedings
disclosed in Exhibit H or in what are, at the applicable time or times at which
this representation and warranty must be correct, the Company’s most recent
Annual Report on Form 10-K filed with the Securities and Exchange Commission and
any Quarterly Reports on Form 10-Q and Current Reports on Form 8-K filed
subsequent to such Form 10-K. All United States federal income tax returns for
the Company and its Subsidiaries required to be filed have been filed on a
timely basis (taking into account any extensions duly obtained therefor), and
all amounts required to be paid as shown by said returns have been paid. Except
as disclosed on Exhibit H, (a) there are no pending or, to the best of the
Company’s knowledge, threatened

 

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objections to or controversies in respect of the United States federal income
tax returns of the Company and its Subsidiaries for any fiscal year except such
objection or controversies that are being contested in good faith by appropriate
proceedings and adequate reserves have been provided therefor in accordance with
generally accepted accounting principles consistently applied, and (b) no
authorization, consent, license, exemption or filing or registration with any
court or governmental department, agency or instrumentality, is or will be
necessary to the valid execution, delivery or performance by the Company or any
Subsidiary of the Loan Documents, except those as may have been obtained.

Section 5.4.    Regulation U. Neither the Company nor any Subsidiary is engaged
in the business of extending credit for the purpose of purchasing or carrying
margin stock (within the meaning of Regulation U of the Board of Governors of
the Federal Reserve System) and no part of the proceeds of any Loan or other
extension of credit hereunder will be used to purchase or carry any margin stock
or to extend credit to others for such a purpose.

Section 5.5.    No Default. No Potential Default or Event of Default is existing
under this Agreement.

Section 5.6.    ERISA. As of the date of this Agreement neither the Company nor
any Subsidiary sponsors, maintains or participates in any Plan.

Section 5.7.    Compliance with Laws. The Company and its Subsidiaries are in
compliance with the requirements of all federal, state and local laws, rules and
regulations applicable to or pertaining to their Property or business operations
(including, without limitation, the Occupational Safety and Health Act of 1970,
the Americans with Disabilities Act of 1990, and laws and regulations
establishing quality criteria and standards for air, water, land and toxic or
hazardous wastes and substances), where any such non-compliance, individually or
in the aggregate, could reasonably be expected to have a Material Adverse
Effect.

Section 5.8.    Security Interests and Indebtedness. There are no security
interests, liens or encumbrances on any of the assets or Property of the Company
or any Subsidiary except the security interests, liens and charges which are now
existing and those which are permitted by Section 7.13 of this Agreement.

Section 5.9.    Subsidiaries. As of the date hereof, the Company’s only
Subsidiaries are identified on Exhibit G hereof. Each of the Company’s
Subsidiaries is duly organized and validly existing under the laws of the state
or country of its incorporation, has full and adequate corporate power to carry
on its business as now conducted, is duly licensed or qualified to do business
in all jurisdictions wherein the failure to be so licensed or qualified would
have a Material Adverse Effect and has, except as set forth in the opinions
delivered in satisfaction of Section 6.4 hereof, full corporate right, power and
authority to enter into the Loan Documents executed and delivered by it and to
perform its obligations under the Loan Documents.

Section 5.10.    Accurate Information. Taken as a whole, the written
information, exhibits and reports furnished by the Company and its Subsidiaries
to the Banks in connection with the negotiation and performance of the Loan
Documents and the Company’s reports under the

 

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Securities Exchange Act of 1934, as amended, and filed after January 31, 2017
and before the date of this Agreement do not contain any material misstatement
of a material fact or omit to state a material fact necessary to make the
statements contained therein not misleading in light of the circumstances in
which made.

Section 5.11.    Enforceability. This Agreement and the other Loan Documents,
when executed and delivered by the Company and the Guarantor Subsidiaries, and
assuming the due execution and delivery by the other parties thereto, will be
the legal, valid and binding agreements of the Company and the Guarantor
Subsidiaries, enforceable against them in accordance with their terms, except
(a) as may be limited by (i) bankruptcy, insolvency, reorganization, fraudulent
transfer, moratorium or other similar laws or any Debtor Relief Law or judicial
decisions for the relief of debtors or the limitation of creditors’ rights
generally; and (ii) any equitable principles relating to or limiting the rights
of creditors generally or any equitable remedy which may be granted to cure any
defaults, and (b) as set forth in the opinions referred to in Section 5.9.

Section 5.12.    OFAC. (a) The Company is in compliance with the requirements of
all OFAC Sanctions Programs applicable to it, except as would not be expected to
have a Material Adverse Effect, (b) each Subsidiary of the Company is in
compliance with the requirements of all OFAC Sanctions Programs applicable to
such Subsidiary, except as would not be expected to have a Material Adverse
Effect, (c) the Company has provided to the Agent, the L/C Issuer, and the Banks
all information regarding the Company and its Affiliates and Subsidiaries
reasonably requested by the Agent, the L/C Issuer, and the Banks to comply with
all applicable OFAC Sanctions Programs, and (d) to the best of the Company’s
knowledge, neither the Company nor any of its Affiliates or Subsidiaries is, as
of the date hereof, named on the current OFAC SDN List.

Section 5.13.    Trademarks, Franchises, and Licenses. Except as would not have
a Material Adverse Effect, the Company and its Subsidiaries collectively own,
possess, or have the right to use all patents, licenses, franchises, trademarks,
trade names, trade styles, copyrights, trade secrets, know how, and confidential
commercial and proprietary information material to their businesses as now
conducted, without known conflict with any patent, license, franchise,
trademark, trade name, trade style, copyright or other proprietary right of any
other Person.

Section 5.14.    Governmental Authority and Licensing. The Company and its
Subsidiaries have received all licenses, permits, and approvals of all federal,
state, and local governmental authorities, if any, necessary to conduct their
businesses as currently conducted, in each case where the failure to obtain or
maintain the same could reasonably be expected to have a Material Adverse
Effect. No investigation or proceeding which, if adversely determined, could
result in revocation or denial of any material license, permit or approval,
which revocation or denial could reasonably be expected to have a Material
Adverse Effect, is pending or, to the knowledge of the Company, threatened.

Section 5.15.    Good Title. Except as would not have a Material Adverse Effect,
the Company and its Subsidiaries have good title (or valid leasehold interests)
to their assets as reflected on the most recent consolidated balance sheet of
the Company and its Subsidiaries furnished to the Agent and the Banks (except
for sales or other dispositions of assets thereafter in the ordinary course of
business or as permitted by this Agreement).

 

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Section 5.16.    Affiliate Transactions. Neither the Company nor any Subsidiary
is a party to any material contracts or agreements with any of its Affiliates
(other than with Guarantor Subsidiaries) on terms and conditions which are
materially less favorable to the Company or such Subsidiary than would be usual
and customary in similar contracts or agreements between Persons not affiliated
with each other.

Section 5.17.    Investment Company. Neither the Company nor any Subsidiary is
an “investment company” or a company “controlled” by an “investment company”
within the meaning of the Investment Company Act of 1940, as amended.

Section 5.18.    Other Agreements. Neither the Company nor any Subsidiary is in
default under the terms of any covenant, indenture or agreement of or affecting
such Person or any of its Property, which default, if uncured, could reasonably
be expected to have a Material Adverse Effect.

Section 5.19.    Solvency. The Company and its Subsidiaries taken as a whole are
solvent (i.e., the value of their assets exceeds the value of their
liabilities), able to pay their debts as they become due, and have sufficient
capital to carry on their business and any new businesses in which they are
about to engage.

Section 5.20.    No Broker Fees. No broker’s or finder’s fee or commission will
be payable with respect hereto or any of the transactions contemplated hereby;
and the Company hereby agrees to indemnify the Agent and the Banks against, and
agrees that it will hold the Agent and the Banks harmless from, any claim,
demand, or liability for any such broker’s or finder’s fees alleged to have been
incurred in connection herewith and any out-of-pocket expenses (including
reasonable outside attorneys’ fees) arising in connection with any such claim,
demand, or liability, other than any such fees as agreed by the Company and the
Agent.

 

SECTION 6. CONDITIONS PRECEDENT.

The obligation of the Banks to make any Loan or issue any L/C pursuant hereto
shall be subject to the following conditions precedent:

Section 6.1.    General. The Agent shall have received the notice of borrowings
and the Notes hereinabove provided for.

Section 6.2.    Initial Extension of Credit. Prior to the initial Loan or L/C
(whichever shall come first) hereunder, the Company shall have delivered to the
Agent for the benefit of the Banks in sufficient counterparts or copies for
distribution to the Banks:

(a)    this Agreement;

(b)    the Revolving Notes and the Swing Note;

 

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(c)    a fully executed Guaranty Agreement substantially in the form of Exhibit
D hereto, from the Guarantor Subsidiaries;

(d)    a pay-off letter from the Existing Lenders under the Existing Agreement
setting forth, among other things, the total amount of indebtedness outstanding
and owing to them (or outstanding letters of credit issued for the account of
the Company or any Subsidiary), which pay-off letter shall be in form and
substance acceptable to the Agent;

(e)    a good standing certificate or certificate of existence for the Company
and each Guarantor Subsidiary, dated no earlier than thirty days (30) days prior
to the date hereof, from the office of the secretary of state of the states of
their respective incorporation;

(f)    copies of the Articles of Incorporation, as restated, and all amendments
thereto, of the Company and each Guarantor Subsidiary certified by the office of
the secretary of state of their respective states of incorporation as of a date
no earlier than thirty days (30) days prior to the date hereof;

(g)    copies of the By-Laws, as restated, and all amendments thereto, of the
Company and each Guarantor Subsidiary, certified as true, correct and complete
on the date hereof by the Treasurer of the Company and each Guarantor
Subsidiary, respectively;

(h)    copies, certified by the Treasurer of the Company and each Guarantor
Subsidiary, of resolutions regarding the transactions contemplated by this
Agreement, duly adopted by the Board of Directors of the Company and each
Guarantor Subsidiary, respectively, and satisfactory in form and substance to
all of the Banks;

(i)    (1) projected financial statements for the Company and its Subsidiaries
(including a balance sheet and income statement) for each of the fiscal years
ending on October 31, 2017, October 31, 2018, October 31, 2019, October 31,
2020, and October 31, 2021, and (2) a closing balance sheet for the Company and
its Subsidiaries adjusted to give effect to the initial extensions of credit
hereunder, in each case in form and substance acceptable to the Agent;

(j)    a fully executed Internal Revenue Service Form W-9 for the Company; and

(k)    an incumbency signature certificate for the Company and each Guarantor
Subsidiary satisfactory in form and substance to all of the Banks.

In addition, at the time of the initial Loan or L/C (whichever shall come first)
hereunder, no Material Adverse Effect shall have occurred since January 31,
2017.

 

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Section 6.3.    Each Extension of Credit. As of the time of the making of each
Loan and issuing each L/C, hereunder (including the initial Loan and L/C):

(a)    each of the representations and warranties set forth in Section 5 hereof
shall have been true and correct in all material respects on the date of this
Agreement; and each of the representations and warranties set forth in
Section 5.1, the second sentence of Section 5.2 (substituting, for the financial
statements referred to in the first sentence of that Section, the latest audited
financial statements delivered to the Banks pursuant to Section 7.4(b) hereof
and the latest monthly financial statements delivered pursuant to Section 7.4(a)
for the last month in each fiscal quarter of the Company after such latest
audited financial statements), the third sentence of Section 5.2, Section 5.3,
Section 5.4, Section 5.5, Section 5.7, Section 5.8, the last sentence of
Section 5.9, Section 5.10, Section 5.11, Section 5.12, 5.13, 5.14, 5.15, 5.16,
5.17, 5.18 and 5.19 shall be and remain true and correct in all material
respects as of the time of the making of such Loan or issuing such L/C, as the
case may be, as if made again as of such time, except to the extent such
representation and warranties expressly relate to an earlier date (in which case
such representations and warranties shall be and remain true and correct in all
material respects as of such earlier date);

(b)    after giving effect to the Company’s application of the proceeds of the
Loan hereunder, no Potential Default or Event of Default shall have occurred and
be continuing;

(c)    with respect to each requested Loan and L/C, after giving effect to the
requested extension of credit and to each Loan that has been made and each L/C
and Reimbursement Obligation outstanding hereunder, the aggregate principal
amount of all Loans, L/Cs and Reimbursement Obligations then outstanding shall
not exceed the sum of the Banks’ Revolving Credit Commitments then in effect;
and

(d)    no statute, rule or regulation shall have been adopted by a jurisdiction
in which a Guarantor Subsidiary is incorporated and no judicial decision of an
appellate court of such a jurisdiction shall have been published to the effect
in any such case that guaranty agreements such as the Subsidiary Guaranty are
beyond the corporate power of corporations subject to the laws of such
jurisdiction, and neither the Company nor any Guarantor Subsidiary shall have
repudiated, disavowed or purported to terminate, repudiate or disavow any
Guarantor Subsidiary’s obligations under the Subsidiary Guaranty, unless in any
such case all of the Guarantor Subsidiaries shall have been merged into the
Company within sixty (60) days of any such event.

and the request by the Company for any Loan or L/C pursuant hereto shall be and
constitute a warranty to the foregoing effects (other than as to the matters set
forth in subsection (d) above).

Section 6.4.    Legal Matters. Legal matters incident to the execution and
delivery of the Loan Documents shall be reasonably satisfactory to each of the
Banks and their legal counsel; and prior to the initial Loan hereunder, the
Agent shall have received the favorable written opinion of Brunini, Grantham,
Grower & Hewes, PLLC, counsel for the Company and the Guarantor Subsidiaries,
substantially in form and substance satisfactory to each of the Banks and their
respective legal counsel.

 

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Section 6.5.    Closing Fee. The Agent shall have received for the pro rata
benefit of the Banks the fees agreed to between the Company and the Agent.

 

SECTION 7. COVENANTS.

It is understood and agreed that so long as credit is in use or available under
this Agreement, any L/C is outstanding hereunder or any amount remains unpaid on
any Note or Reimbursement Obligation, except to the extent compliance in any
case or cases is waived in writing by the Required Banks:

Section 7.1.    Maintenance of Property. The Company will, and will cause each
Subsidiary to, keep and maintain all of the material Properties necessary or
useful in their business taken as a whole in good condition, and make all
necessary material renewals, replacements, additions, betterments and
improvements thereto; provided, however, that nothing in this Section shall
prevent the Company or any Subsidiary from discontinuing the operating and
maintenance of any of its Properties if such discontinuance is, in the judgment
of the Company, desirable in the conduct of its business and not disadvantageous
in any material respect to the Banks as holders of the Notes.

Section 7.2.    Taxes. The Company will, and will cause each Subsidiary to, duly
pay and discharge all material taxes, rates, assessments, fees and governmental
charges upon or against the Company or any Subsidiary or against its Properties
in each case before the same becomes delinquent and before penalties accrue
thereon unless and to the extent that the same is being contested in good faith
and by appropriate proceedings and adequate reserves, determined in accordance
with generally accepted accounting principles consistently applied, have been
established with respect thereto.

Section 7.3.    Maintenance of Insurance. The Company will, and will cause each
Subsidiary to, maintain insurance with insurers recognized as financially sound
and reputable by prudent business persons in such forms and amounts and against
such risks as the Company reasonably believes is prudent and normal within the
industry. The Company shall, at the Agent’s request, provide copies to the Agent
of all insurance policies and other materials related thereto maintained by the
Company and its Subsidiaries. The Company shall furnish each Bank as soon as
available, and in any event no later than each Anniversary Date, a summary of
its insurance coverage which summary shall be reasonably satisfactory in form
and substance to the Banks.

Section 7.4.    Financial Reports. The Company will, and will cause each
Subsidiary to, maintain a system of accounting in accordance with sound
accounting practice and will furnish promptly to the Banks and their duly
authorized representatives such information respecting the business and
financial condition of the Company and its Subsidiaries as may from time to time
be reasonably requested and, without any request, will furnish each Bank:

(a)    as soon as available, and in any event within forty (40) days after the
close of each monthly fiscal period of the Company, a copy of consolidated
balance sheets and consolidated profit and loss statements for the Company and
its Subsidiaries (for such

 

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monthly period and the year to date) for such period of the Company and for the
corresponding periods of the preceding fiscal year, all in reasonable detail,
prepared by the Company and accompanied by a certificate of the chief financial
officer, chief executive officer or chief accounting officer of the Company to
the effect that said financial statements were prepared in conformity with
generally accepted accounting principles and, in his opinion, are fairly and
accurately stated;

(b)    as soon as available, and in any event within ninety (90) days after the
close of each fiscal year of the Company, a copy of the audit report for such
fiscal year and accompanying financial statements, including consolidated
balance sheets, reconciliations of change in stockholders’ equity, profit and
loss statements and statements of cash flows for the Company and its
Subsidiaries showing in comparative form the figures for the previous fiscal
year of the Company, all in reasonable detail, accompanied by the unqualified
opinion of Ernst & Young or other independent public accountants of nationally
recognized standing selected by the Company and reasonably satisfactory to the
Required Banks;

(c)    within forty-five (45) days after the last day of the first three fiscal
quarters in each fiscal year and within ninety (90) days after the close of each
fiscal year of the Company, a Compliance Certificate in the form of Exhibit E
attached hereto, prepared and signed by the chief financial officer, chief
executive officer or chief accounting officer of the Company;

(d)    as soon as available but in any event no later than November 30 of each
year, a consolidated budget for the Company and its Subsidiaries for such fiscal
year showing the Company’s and its Subsidiaries’ projected consolidated balance
sheet and consolidated profits and losses, and a consolidated budget for the
Company and its Subsidiaries for such fiscal year showing the Company’s and its
Subsidiaries’ projected consolidated capital expenditures, all in reasonable
detail; and

(e)    as soon as available but in any event within ten (10) days of the filing
thereof, copies of all 10-K, 10-Q and 8-K filings and all shareholder proxy
materials filed by the Company or any Subsidiary with the Securities and
Exchange Commission.

Section 7.5.    Inspection. The Company shall, and shall cause each Subsidiary
to, permit the Banks, by their representatives and agents, to reasonably inspect
any of the Properties, corporate books and financial records of the Company and
each Subsidiary, to reasonably examine and make copies of the books of accounts
and other financial records of the Company and its Subsidiaries and to discuss
the affairs, finances and accounts of the Company and its Subsidiaries with, and
to be advised as to the same by, its officers at such reasonable times during
normal business hours and reasonable intervals as the Banks may request and, so
long as no Potential Default or Event of Default exists, upon reasonable prior
notice. The Company shall pay to the Banks from time to time upon demand an
amount (but not to exceed $3,000 for each inspection) sufficient to compensate
the Banks for their reasonable out-of-pocket fees, charges and expenses in
connection with any such inspection of the Company and the Subsidiaries,
provided that so long as no Event of Default shall have occurred and be
continuing, the Company shall be required to pay for only one such inspection
per year.

 

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Section 7.6.    Consolidation and Merger. The Company will not, and will not
permit any Subsidiary to, consolidate with or merge into any Person, or permit
any other Person to merge into it, or acquire (in a transaction analogous in
purpose or effect to a consolidation or merger) all or substantially all of the
Property or capital stock of any other Person except (a) as permitted by
Section 7.14(d) hereof, (b) any Subsidiary may consolidate with or merge into or
with any other Subsidiary, and (c) any Subsidiary may merge into the Company.

Section 7.7.    Transactions with Affiliates. The Company will not, and will not
permit any Subsidiary to, enter into any material transaction, including without
limitation, the purchase, sale, lease or exchange of any Property, or the
rendering of any service, with any Affiliate of the Company except in the
ordinary course of and pursuant to the reasonable requirements of the Company’s
or such Subsidiary’s business and upon fair and reasonable terms no less
favorable to the Company or such Subsidiary than would be obtained in a
comparable arm’s-length transaction with a Person not an Affiliate of the
Company; provided however that the foregoing shall not prevent any transactions
between any Guarantor Subsidiary and any other Guarantor Subsidiary or the
Company on any terms mutually acceptable to them.

Section 7.8.    Material Subsidiaries. The Company shall cause each Material
Subsidiary, whether now existing or hereafter created or acquired, to execute
and deliver to the Agent for the benefit of the Banks, within thirty (30) days
of becoming a Material Subsidiary, a guaranty substantially in the form of the
Subsidiary Guaranty, together with items described in Sections 6.2(c), (d), (e),
(f) and (g) and 6.4 of this Agreement (each dated as of the date of the
Subsidiary Guaranty to which it relates) with respect to such Material
Subsidiary and such guaranty.

Section 7.9.    Consolidated Tangible Net Worth. The Company will maintain at
all times Consolidated Tangible Net Worth in an amount not less than
$850,000,000 increasing on the last day of each fiscal quarter (commencing with
the fiscal quarter ending April 30, 2017) by an amount equal to (a) 100% of any
Net Proceeds of Stock issued during such quarter plus (b) 60% of an amount (but
not less than zero) equal to (i) the Company’s Consolidated Net Income for such
fiscal quarter, minus (ii) the aggregate amount of all dividends declared during
such fiscal quarter rounded to the next highest $100,000.

Section 7.10.    Consolidated Indebtedness for Borrowed Money to Total
Capitalization. The Company will not permit the ratio of its Consolidated
Indebtedness for Borrowed Money to its Total Capitalization (the “Leverage
Ratio”), expressed as a percentage, at any time to exceed 50% (at any time, the
“Scheduled Ratio”); provided that the Company may elect to increase the maximum
Leverage Ratio permitted by this Section (the “Maximum Leverage Ratio”) by 5%
above the Scheduled Ratio then in effect (e.g., 50% to 55%) for four
(4) consecutive fiscal quarters by giving written notice to the Agent of such
election (the “Increase Notice”) in connection with the construction of any of
three (3) new poultry processing complexes including two greenfield processing
complexes at locations to be determined by the Company but within the United
States and one processing complex in Tyler, Texas (such poultry processing

 

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complexes are referred to collectively as the “New Processing Complexes” and
individually as a “New Processing Complex”). The Maximum Leverage Ratio will
increase to a level 5% above the Scheduled Ratio then in effect on the first day
of the fiscal quarter in which the Agent receives the Increase Notice and will
continue in effect at such level for the following three (3) fiscal quarters,
provided that the Maximum Leverage Ratio shall revert to the Scheduled Ratio if
the Company has not begun and does not begin construction of the New Processing
Complex described in the applicable Increase Notice within three (3) months of
the date on which the Agent receives the Increase Notice. The Company may give
only one Increase Notice during the term of this Agreement.

Section 7.11.    Capital Expenditures. (a) The Company will not, and will not
permit any Subsidiary to, spend or be obligated to spend during any fiscal year
for capital expenditures (as defined and classified in accordance with generally
accepted accounting principles as, with respect to the definition and
classifications of operating leases, existing on the date of this Credit
Agreement, consistently applied, including without limitation any such capital
expenditures in respect of Capitalized Leases but excluding any acquisition
permitted by Section 7.14(d) which might constitute such a capital expenditure,
and the capital expenditures permitted by clauses (b) and (c) below) in an
aggregate amount for the Company and its Subsidiaries in excess of $100,000,000
during its fiscal year ending October 31, 2017, increasing by $5,000,000 during
each fiscal year of the Company ending thereafter to and including fiscal year
2022, commencing with the fiscal year ending October 31, 2018, plus in each case
up to $15,000,000 which may be carried over from the fiscal year ending
October 31, 2016 into the fiscal year ending October 31, 2017, and $20,000,000
which may be carried over from any fiscal year ending on or after October 31,
2017, into the immediately following fiscal year (the “Carryover Amount”)
permitted to be spent in the preceding fiscal year but not actually spent
therein. For purposes of this Section, any capital expenditures made in any
fiscal year shall be applied first to the Carryover Amount, if any, available
during such fiscal year.

(b)    The Company will not, and will not permit any Subsidiary to, spend or be
obligated to spend capital expenditures (as defined and classified in accordance
with generally accepted accounting principles consistently applied) in
connection with (i) add-on construction to the Jackson, Mississippi further
processing complex in excess of $15,000,000 during the term of this Agreement,
(ii) construction of a Tyler, Texas chicken processing complex in excess of
$200,500,000 during the term of this Agreement, (iii) the construction of a new
greenfield further processing complex at a location to be determined in excess
of $60,000,000 during the term of this Agreement, and (iv) the construction of
an additional new greenfield chicken processing complex at a location to be
determined in excess of $210,000,000 during the term of this Agreement.

(c)    The Company will not, and will not permit any Subsidiary to, spend or be
obligated to spend capital expenditures (as defined and classified in accordance
with generally accepted accounting principles consistently applied) in
connection with the purchase of up to three new aircraft before October 31,
2020, in excess of $70,000,000 in the aggregate.

Section 7.12.    Compliance with OFAC Sanctions Programs. (a) The Company shall
at all times comply with the requirements of all OFAC Sanctions Programs
applicable to the Company and shall cause each of its Subsidiaries to comply
with the requirements of all OFAC Sanctions Programs applicable to such
Subsidiary, except in any such case as would not have a Material Adverse Effect.

 

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(b)    The Company shall provide the Agent, the L/C Issuer, and the Banks any
information they may request regarding the Company, its Affiliates, and its
Subsidiaries necessary for the Agent, the L/C Issuer, and the Banks to comply
with all applicable OFAC Sanctions Programs; subject however, in the case of
Affiliates, to the Company’s ability to provide information applicable to them.

(c)    If the Company obtains actual knowledge or receives any written notice
that the Company, any Affiliate or any Subsidiary is named on the then current
OFAC SDN List (such occurrence, an “OFAC Event”), the Company shall promptly
(i) give written notice to the Agent, the L/C Issuer, and the Banks of such OFAC
Event, and (ii) comply in all material respects with all applicable laws with
respect to such OFAC Event (regardless of whether the party included on the OFAC
SDN List is located within the jurisdiction of the United States of America),
including the OFAC Sanctions Programs, and the Company hereby authorizes and
consents to the Agent, the L/C Issuer, and the Banks taking, after notifying the
Company if permitted to do so, any and all steps the Agent, the L/C Issuer, or
the Banks deem necessary, in their sole but reasonable discretion, to avoid
violation of all applicable laws with respect to any such OFAC Event, including
the requirements of the OFAC Sanctions Programs (including the freezing and/or
blocking of assets and reporting such action to OFAC).

Section 7.13.    Liens. The Company will not, and will not permit any Subsidiary
to, pledge, mortgage or otherwise encumber or subject to or permit to exist
upon, or be subjected to any lien, charge or security interest of any kind
(including any conditional sale or other title retention agreement and any lease
in the nature thereof) on, any of its Properties of any kind or character at any
time owned by the Company or any Subsidiary, other than:

(a)    liens, pledges or deposits for worker’s compensation, unemployment
insurance, old age benefits or social security obligations, taxes, assessments,
statutory obligations or other similar charges, good faith deposits made in
connection with tenders, contracts or leases to which the Company or a
Subsidiary is a party or other deposits required to be made in the ordinary
course of business, provided in each case the obligation secured is not overdue
or, if overdue, is being contested in good faith by appropriate proceedings and
adequate reserves have been provided therefor in accordance with generally
accepted accounting principles and that the obligation is not for borrowed
money, customer advances or trade payables;

(b)    the pledge of assets for the purpose of securing an appeal or stay or
discharge in the course of any legal proceedings, provided that the aggregate
amount of liabilities of the Company or a Subsidiary so secured by a pledge of
property permitted under this subsection (b) including interest and penalties
thereon, if any, shall not be in excess of $5,000,000 at any one time
outstanding;

 

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(c)    liens, pledges, mortgages, security interests or other charges existing
on the date hereof and disclosed in financial statements (or notes thereto)
referred to in Section 5.2 hereof;

(d)    liens for property taxes and assessments or governmental charges or
levies which are not yet due and payable;

(e)    liens incidental to the conduct of business or the ownership of
Properties and assets (including warehousemen’s liens, mechanic’s liens, grower
liens and attorneys’ liens and statutory landlords’ liens) or other liens of
like general nature incurred in the ordinary course of business and not in
connection with the borrowing of money, provided in each case, the obligation
secured is not overdue or, if overdue, is being contested in good faith by
appropriate actions or proceedings and for which adequate reserves, determined
in accordance with generally accepted accounting principles, have been
established;

(f)    minor survey exceptions or minor encumbrances, easements or reservations,
or rights of others for rights-of-way, utilities and other similar purposes, or
zoning or other restrictions as to the use of real properties, which are
necessary for the conduct of the activities of the Company and its Subsidiaries
or which customarily exist on properties of corporations engaged in similar
activities and similarly situated and which do not in any event materially
impair the operation of the business of the Company and its Subsidiaries taken
as a whole;

(g)    liens created solely for the purpose of securing indebtedness arising out
of a Capital Lease in connection with an aircraft rental provided that such lien
shall not extend to or cover other Property of the Company or the Guarantor
Subsidiaries;

(h)    additional pledges, mortgages, encumbrances, liens, charges and security
interests (including any conditional sale or other title retention agreement and
any lease in the nature thereof) on fixed assets (classified in accordance with
generally accepted accounting principles, consistently applied) having an
aggregate book value at the end of the fiscal quarter immediately preceding the
fiscal quarter in which the latest of such mortgages, liens, or encumbrances are
created of no more than $20,000,000 at any one time; and

(i)    liens in favor of the Agent on the Collateral Account and all amounts
held therein.

Section 7.14.    Investments, Loans, Advances and Acquisitions. The Company will
not, and will not permit any Subsidiary to, make or retain any investment
(whether through the purchase of stock, obligations, capital contributions or
otherwise) in or make any loan or advance

 

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to, any other Person, or acquire substantially as an entirety the Property or
business of any other Person, other than:

(a)    investments in certificates of deposit having a maturity of two (2) years
or less issued by any Bank or any other commercial bank having a long-term
rating at the time of investment of at least AA by Standard & Poor’s Ratings
Services Group, a division of The McGraw-Hill Companies, Inc. (“S&P”) or Aa by
Moody’s Investor Services, Inc. (“Moody’s”) and a short-term rating at the time
of investment of A-1 from S&P or P-1 from Moody’s;

(b)    investments in commercial paper rated at the time of investment P-1 by
Moody’s or A-1 by S&P maturing within 270 days of the date of issuance thereof;

(c)    investments shown on the financial statements referred to in Section 5.2
in existing Subsidiaries;

(d)    acquisitions of the Property or business of any Person, provided that no
Potential Default or Event of Default shall then exist after giving effect to
such acquisition and no change of the voting control or management of the
Company shall result therefrom;

(e)    marketable full faith and credit obligations of the United States of
America or of any agency thereof for which the full faith and credit of the
United States of America has been pledged;

(f)    repurchase, reverse repurchase and security lending agreements
collateralized by securities of the type described in subsection (e), provided
that the Company or Subsidiary, as the case may be, which is a party to such
arrangement shall hold (individually or through an agent or bailee) all
securities relating thereto during the entire term of each such arrangement;

(g)    municipal debt securities commonly known as “lower floaters” or “variable
rate demand notes” so long as (i) such securities provide that the owner thereof
may require that such securities be bought from it upon 7 days notice by such
owner, and (ii) such securities shall have a long-term rating at the time of
investment of at least AA by S&P or Aa by Moody’s and a short-term rating at the
time of investment of A-1 from S&P or P-1 from Moody’s;

(h)    investments in an aggregate principal amount of up to $1,000,000 and not
otherwise permitted by this Section, in certificates of deposit in any
commercial bank;

(i)    investments in and loans and advances to the Company or any Subsidiary by
the Company or any other Subsidiary; and

(j)    a loan in a principal amount not to exceed $500,000 to the Company’s
employees’ stock ownership plan.

Section 7.15.    Sale of Tangible Fixed Assets. The Company will not, and will
not permit any Subsidiary to, sell, lease, assign, transfer or otherwise dispose
of tangible fixed assets (as

 

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classified in accordance with generally accepted accounting principles,
consistently applied) if the book value of the Property sold, leased, assigned,
transferred or otherwise disposed of in the latest such transaction, together
with the Property sold, leased, assigned, transferred or otherwise disposed of
in all other such transactions after the date of this Agreement, would exceed
15% of the book value of all of the Company’s and its subsidiaries’ tangible
assets (determined in accordance with generally accepted accounting principles,
consistently applied) at the time of the latest such transaction, except for
(a) sales of obsolete or worn-out equipment in the ordinary course of business,
(b) sales of assets of the Company where the proceeds are reinvested in new
assets within one (1) year after consummation of the sale of assets,
(c) transfer of such assets between any Subsidiary and the Company or any other
Subsidiary, to each of which this Section shall not apply, and (d) the transfer
of Property in connection with the issuance of Economic Development Bonds which
(i) are held by the Company or a Subsidiary of the Company or (ii) have an
aggregate principal amount not to exceed $100,000,000 during the term of this
Agreement.

Section 7.16.    Notice of Suit or Adverse Change in Business or Default. The
Company shall give written notice to the Agent within five (5) Business Days
after the Company learns of, or forms a belief as to the existence of, any of
the following:

(a)    any proceeding(s) being instituted or threatened in writing to be
instituted against the Company or any Subsidiary in any federal, state, local or
foreign court or before any commission or other regulatory body (federal, state,
local or foreign) that is material to the Company and its Subsidiaries taken as
a whole;

(b)    any Material Adverse Effect not reflected in financial statements
delivered to the Agent; and

(c)    the occurrence of any Potential Default or Event of Default.

Section 7.17.    ERISA. The Company will, and will cause each Subsidiary to,
promptly pay and discharge all obligations and liabilities arising under ERISA
of a character which if unpaid or unperformed is likely to result in the
imposition of a lien against any material portion of the Property of the Company
and its Subsidiaries taken as a whole and will promptly notify the Agent, upon
the Company becoming aware, of (a) the occurrence of any reportable event (as
defined in ERISA) which might result in the termination by the PBGC of any Plan,
(b) receipt of any notice from PBGC of its intention to seek termination of any
such Plan or appointment of a trustee therefor, and (c) its intention to
terminate or withdraw from any Plan. The Company will not, and will not permit
any Subsidiary to, terminate any such Plan or withdraw therefrom unless it shall
be in compliance with all of the terms and conditions of this Agreement after
giving effect to any liability to PBGC resulting from such termination or
withdrawal.

Section 7.18.    Use of Proceeds. The Company shall use the proceeds of each
Loan and other extensions of credit hereunder only to repay all of the Company’s
indebtedness under the Existing Agreement, to finance capital expenditures and
working capital and general corporate purposes of the Company and the
Subsidiaries, for permitted acquisitions, and to fund certain fees and expenses
associated with this Agreement.

 

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Section 7.19.    Compliance with Laws, etc. The Company will, and will cause
each of its Subsidiaries to, comply in all material respects with all applicable
laws, rules, regulations and orders, such compliance to include (without
limitation) the maintenance and preservation of its corporate existence and
qualification as a foreign corporation, except where the failure to so comply or
to be so qualified would not have a Material Adverse Effect.

Section 7.20.    Environmental Covenant. The Company will, and will cause each
of its Subsidiaries to, except as disclosed on Exhibit F attached hereto, use
and operate all of its facilities and Properties in compliance with all
Environmental Laws, keep all necessary material permits, approvals,
certificates, licenses and other authorizations relating to environmental
matters in effect and remain in material compliance therewith, and handle all
hazardous materials in material compliance with all applicable Environmental
Laws, except, as to each of the foregoing, where the failure to do so would not
have a Material Adverse Effect.

Section 7.21.    No Changes in Fiscal Year. The fiscal year of the Company and
its Subsidiaries ends on October 31 of each year; and the Company shall not, nor
shall it permit any Subsidiary to, change its fiscal year from its present basis
unless required by law to do so.

Section 7.22.    Change in the Nature of Business. The Company shall not, nor
shall it permit any Subsidiary to, engage in any material business or activity
if as a result the general nature of the business of the Company or any
Subsidiary would be materially changed from the general nature of the business
engaged in by it as of the date of this Agreement.

Section 7.23.    No Restrictions. Except as provided herein and except for any
existing encumbrance or restriction, the Company shall not, nor shall it permit
any Subsidiary to, directly or indirectly create or otherwise cause or suffer to
exist or become effective any consensual encumbrance or restriction of any kind
on the ability of any Subsidiary to: (a) pay dividends or make any other
distribution on its capital stock or other equity interests owned by the Company
or any other Subsidiary, (b) pay any indebtedness owed to the Company or any
other Subsidiary, (c) make loans or advances to the Company or any other
Subsidiary, (d) transfer any of its Property to the Company or any other
Subsidiary, or (e) guarantee the Company’s indebtedness, obligations and
liabilities under the Loan Documents and/or grant liens on its assets to the
Agent.

Section 7.24.    Maintenance of Subsidiaries. The Company shall not assign, sell
or transfer, nor shall it permit any Guarantor Subsidiary to issue, assign, sell
or transfer, any shares of capital stock or other equity interests of a
Guarantor Subsidiary; provided, however, that the foregoing shall not operate to
prevent (a) the issuance, sale, and transfer to any person of any shares of
capital stock of a Guarantor Subsidiary solely for the purpose of qualifying,
and to the extent legally necessary to qualify, such person as a director of
such Guarantor Subsidiary, and (b) any transaction permitted by Section 7.6
above.

 

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SECTION 8. EVENTS OF DEFAULT AND REMEDIES.

Section 8.1.    Definitions. Any one or more of the following shall constitute
an Event of Default:

(a)    (i) Default in the payment when due of any principal of or interest on
any Note or Reimbursement Obligation, whether at the stated maturity thereof or
as required by Section 2.4 hereof or at any other time provided in this
Agreement, or (ii) default in the payment of any fee or other amount payable by
the Company pursuant to this Agreement within five (5) Business Days after the
Company receives an invoice therefor;

(b)    Default in the observance or performance of any covenant set forth in
Section 7.18 hereof;

(c)    Default in the observance or performance of any covenant set forth in
Sections 7.5, 7.6, 7.8, 7.9, 7.10, 7.11, 7.12, 7.13, 7.14, 7.15, 7.16 and 7.19
hereof;

(d)    Default in the observance or performance of any covenant set forth in
Section 7.4 hereof and the continuation thereof for three (3) Business Days
after receipt of notice thereof by the Company from any Bank;

(e)    Default in the observance or performance of any other covenant,
condition, agreement or provision hereof or any of the other Loan Documents and
such default shall continue for thirty (30) days after receipt of written notice
thereof by the Company from any Bank;

(f)    Default shall occur under any evidence of Indebtedness for Borrowed Money
in an aggregate principal amount exceeding $10,000,000 issued or assumed or
guaranteed by the Company or any Subsidiary, or under any mortgage, agreement or
other similar instrument under which the same may be issued or secured and such
default shall continue for a period of time sufficient to permit the
acceleration of maturity of the indebtedness evidenced thereby or outstanding or
secured thereunder;

(g)    Any representation or warranty made by the Company or any Subsidiary
herein or in any Loan Document or in any written statement or certificate
furnished by it pursuant hereto or thereto after the date of this Agreement,
proves untrue in any material respect as of the date made or deemed made
pursuant to the terms hereof and any such breach which is capable of being cured
shall not be remedied within thirty (30) days after receipt of written notice
thereof by the Company from any Bank;

(h)    Any judgment or judgments, writ or writs, or warrant or warrants of
attachment, or any similar process or processes which order the payment of money
in excess of $100,000,000 over and above any insurance proceeds payable with
respect thereto and will have a Material Adverse Effect on the ability of the
Company and its Subsidiaries taken as a whole to continue to conduct their
business in the ordinary course, shall be entered or filed against the Company
or any Subsidiary or against any of their respective Property or assets and
remain unstayed and undischarged for a period of thirty (30) days from the date
of its entry;

 

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(i)    Any reportable event (as defined in ERISA) which constitutes grounds for
the termination of any Plan or for the appointment by the appropriate United
States District Court of a trustee to administer or liquidate any such Plan,
shall have occurred and be continuing thirty (30) days after receipt of written
notice by Company to such effect shall have been given by any Bank; or any such
Plan shall be terminated in a manner that can reasonably be expected to result
in liability under ERISA that is material to the Company and its Subsidiaries
taken as a whole; or a trustee shall be appointed by the appropriate United
States District Court to administer any such Plan, or the PBGC shall institute
proceedings to administer or terminate any such Plan, and any such
administration or termination could reasonably be expected to have a Material
Adverse Effect;

(j)    The Company or any Guarantor Subsidiary shall (i) have entered
involuntarily against it an order for relief under the Bankruptcy Code of 1978,
as amended, (ii) admit in writing its inability to pay, or not pay, its debts
generally as they become due or suspend payment of its obligations, (iii) make
an assignment for the benefit of creditors, (iv) apply for, seek, consent to, or
acquiesce in, the appointment of a receiver, custodian, trustee, conservator,
liquidator or similar official for it or any substantial part of its property,
(v) file a petition seeking relief or institute any proceeding seeking to have
entered against it an order for relief under the Bankruptcy Code of 1978, as
amended, to adjudicate it insolvent, or seeking dissolution, winding up,
liquidation, reorganization, arrangement, marshalling of assets, adjustment or
composition of it or its debts under any law relating to bankruptcy, insolvency
or reorganization or relief of debtors or fail to file an answer or other
pleading denying the material allegations of any such proceeding filed against
it, or (vi) fail to contest in good faith any appointment or proceeding
described in Section 8.1(k) hereof;

(k)    A custodian, receiver, trustee, conservator, liquidator or similar
official shall be appointed for the Company or any Guarantor Subsidiary or any
substantial part of the Property of the Company and its Subsidiaries taken as a
whole, or a proceeding described in Section 8.1(j)(v) shall be instituted
against the Company or any Guarantor Subsidiary and such appointment continues
undischarged or any such proceeding continues undismissed or unstayed for a
period of sixty (60) days;

(l)    a Change of Control shall occur; or

(m)    any of the Loan Documents shall for any reason not be or shall cease to
be in full force and effect or is declared to be null and void, or any Guarantor
Subsidiary takes any action for the purpose of terminating, repudiating or
rescinding any Loan Document executed by it or any of its obligations
thereunder.

Section 8.2.    Remedies for Non-Bankruptcy Defaults. When any Event of Default,
other than an Event of Default described in subsections (j) and (k) of
Section 8.1 hereof, has occurred

 

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and is continuing, the Agent, if directed by the Required Banks, shall give
notice to the Company and take any or all of the following actions:
(a) terminate the remaining Commitments and on the date (which may be the date
thereof) stated in such notice, (b) declare the principal of and the accrued
interest on the Notes and all Reimbursement Obligations to be forthwith due and
payable and thereupon the Notes and all Reimbursement Obligations, including
both principal and interest, shall be and become immediately due and payable
without further demand, presentment, protest or notice of any kind, and (c) take
any action or exercise any remedy under any of the Loan Documents or exercise
any other action, right, power or remedy permitted by law. Any Bank may exercise
the right of set-off with regard to any deposit accounts or other accounts
maintained by the Company with any of the Banks, and the Company’s indebtedness
hereunder shall be satisfied to the extent of any amount set-off against such
indebtedness.

Section 8.3.    Remedies for Bankruptcy Defaults. When any Event of Default
described in subsections (j) or (k) of Section 8.1 hereof has occurred and is
continuing, then the Notes and all Reimbursement Obligations shall immediately
become due and payable without presentment, demand, protest or notice of any
kind, and the obligation of the Banks to extend further credit pursuant to any
of the terms hereof shall immediately terminate.

 

SECTION 9. CHANGE IN CIRCUMSTANCES REGARDING EURODOLLAR LOANS.

Section 9.1.    Change of Law. Notwithstanding any other provisions of this
Agreement or any Note, if at any time after the date hereof with respect to
Eurodollar Loans, any Bank shall determine in good faith that any change in
applicable law or regulation (and for purposes of this Agreement, the Dodd-Frank
Wall Street Reform and Consumer Protection Act and all regulations, guidelines
or directives in connection therewith (the “Dodd-Frank Act”) are deemed to have
been adopted and gone into effect after the date hereof) or in the
interpretation thereof makes it unlawful for such Bank to make or continue to
maintain any Eurodollar Loan or to give effect to its obligations with respect
thereto as contemplated hereby, such Bank shall promptly give notice thereof to
the Company to such effect, and such Bank’s obligation to make or relend any
such affected Eurodollar Loans under this Agreement shall terminate until it is
no longer unlawful for such Bank to make or maintain such affected Loan. In the
event of such a determination, the Company shall prepay the outstanding
principal amount of any such affected Eurodollar Loan made to it, together with
all interest accrued thereon and all other amounts due and payable to the Banks
under Section 9.4 of this Agreement, on the earlier of the last day of the
Interest Period applicable thereto and the first day on which such Bank has
given the Company not less than one (1) Business Day’s prior written notice that
it is illegal for such Bank to have such Loans outstanding; provided, however,
the Company shall then be permitted to elect to borrow the principal amount of
such affected Eurodollar Loan by means of another type of Loan available
hereunder, subject to all of the terms and conditions of this Agreement. In the
event that Eurodollar Loans shall be unavailable as provided in this Section,
the Banks and the Company shall negotiate in good faith to make available to the
Company, on mutually acceptable terms, Loans bearing interest at a rate per
annum determined with reference to the rates quoted to the Agent in the
secondary market by three (3) certificate of deposit dealers of recognized
standing for the purchase at face value of the Agents’ certificates of deposit
in an amount and for an interest period equal to an amount and interest period
of the requested Loans, adjusted for reserves and FDIC insurance assessments
(the “Adjusted CD Rate”).

 

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Section 9.2.    Unavailability of Deposits or Inability to Ascertain the
Adjusted Eurodollar Rate. Notwithstanding any other provision of this Agreement
or any Note to the contrary, if prior to the commencement of any Interest Period
(a) any Bank shall reasonably determine that deposits in the amount of any
Eurodollar Loan scheduled to be outstanding are not available to it in the
relevant market, (b) any Bank shall reasonably determine that by reason of
circumstances affecting the relevant market, adequate and reasonable means do
not exist for ascertaining the Adjusted Eurodollar Rate, or (c) the Agent shall
have received notice from the Required Banks that the Adjusted Eurodollar Rate
determined or to be determined for such Interest Period will not adequately and
fairly reflect to the cost to the Banks (as conclusively certified by the Banks)
of making or maintaining their affected Loans during such Interest Period, then
the Agent shall promptly give telephonic or telex notice thereof to the Company
and the Banks (such notice to be confirmed in writing), and the obligation of
the Banks to make any such Eurodollar Loan in such amount and for such Interest
Period shall terminate until the Company shall thereafter request a Eurodollar
Loan and deposits in such amount and for the Interest Period selected by the
Company shall again be readily available in the relevant market and adequate and
reasonable means exist for ascertaining the Adjusted Eurodollar Rate. Upon the
giving of such notice, the Company may elect to either (i) pay or prepay, as the
case may be, such affected Loan or (ii) reborrow such affected Loan as another
type of Loan available hereunder, subject to all terms and conditions of this
Agreement. In the event that Eurodollar Loans are unavailable pursuant to this
Section, the Banks and the Company shall negotiate in good faith for Loans
bearing interest at a rate per annum based on the Adjusted CD Rate to be made
available to the Company.

Section 9.3.    Taxes, Increased Costs and Reduced Return. (a) With respect to
any outstanding Eurodollar Loans, if any Bank shall determine in good faith that
any change in any applicable law, treaty, regulation or guideline (including,
without limitation, Regulation D of the Board of Governors of the Federal
Reserve System) or any new law, treaty, regulation or guideline (and for
purposes of this Agreement, the Dodd-Frank Act is deemed to have been adopted
and gone into effect after the date hereof), or any interpretation or
application of any of the foregoing by any governmental authority charged with
the administration thereof or any central bank or other fiscal, monetary or
other authority having jurisdiction over such Bank or its lending branch or the
Eurodollar Loans contemplated by this Agreement (whether or not having the force
of law) (“Change in Law”) shall:

(i)    impose, modify or deem applicable any reserve, special deposit or similar
requirements against assets held by, or deposits in or for the account of, or
Eurodollar Loans by, or any other acquisition of funds or disbursements by, such
Bank (other than reserves included in the determination of the Adjusted
Eurodollar Rate);

(ii)    subject any Recipient to any Taxes (other than (A) Indemnified Taxes,
(B) Taxes described in clauses (b) through (d) of the definition of Excluded
Taxes and (C) Connection Income Taxes) on its Loans, Loan principal, letters of
credit, commitments, or other obligations, or its deposits, reserves, other
liabilities or capital attributable thereto;

 

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(iii)    change the basis of taxation of payments of principal and interest due
from the Company to such Bank hereunder or under any Note (other than by a
change in taxation of the overall net income of such Bank); or

(iv)    impose on such Bank any penalty with respect to the foregoing or any
other condition regarding this Agreement, its disbursement, any Eurodollar Loan
or any Note;

and such Bank shall determine in good faith that the result of any of the
foregoing is to increase the cost (whether by incurring a cost or adding to a
cost) to such Bank of making or maintaining any Eurodollar Loan hereunder or to
reduce the amount of principal or interest received by such Bank, then, within
thirty-five (35) days after demand by such Bank (with a copy to the Agent), the
Company shall pay to such Bank from time to time as specified by such Bank such
additional amounts as such Bank shall determine are sufficient to compensate and
indemnify it for such increased cost or reduced amount.

(b)    If, after the date hereof, any Bank or the Agent shall have determined in
good faith that the adoption of any applicable law, rule or regulation (and for
purposes of this Agreement, the Dodd-Frank Act is deemed to have been adopted
and gone into effect after the date hereof) regarding capital adequacy, or any
change therein (including, without limitation, any revision in the Final
Risk-Based Capital Guidelines of the Board of Governors of the Federal Reserve
System (12 CFR Part 208, Appendix A; 12 CFR Part 225, Appendix A) or of the
Office of the Comptroller of the Currency (12 CFR Part 3, Appendix A), or in any
other applicable capital rules heretofore adopted and issued by any governmental
authority), or any change in the interpretation, application or administration
thereof by any governmental authority, central bank or comparable agency charged
with the interpretation, application or administration thereof, or compliance by
any Bank (or its Lending Office) with any request or directive regarding capital
adequacy (whether or not having the force of law) of any such authority, central
bank or comparable agency, has or would have the effect of reducing the rate of
return on such Bank’s capital, or on the capital of any corporation controlling
such Bank, in each case as a consequence of its obligations hereunder to a level
below that which such Bank would have achieved but for such adoption, change or
compliance (taking into consideration such Bank’s policies with respect to
capital adequacy) by an amount deemed by such Bank to be material, then from
time to time, within thirty-five (35) days after receipt of demand by such Bank
(with a copy to the Agent), the Company shall pay to such Bank such additional
amount or amounts as will compensate such Bank for such reduction.

(c)    If any Bank makes such a claim for compensation, it shall provide to the
Company a certificate setting forth such increased cost or reduced amount as a
result of any event mentioned herein specifying such Change in Law and a
calculation thereof in reasonable detail and an explanation in reasonable detail
of the event giving rise to such claim, all in sufficient detail to permit the
Company to determine whether such certificate meets the standard required by
this Section, and such certificate shall be conclusive and binding on the
Company as to the requested payment becoming due by the Company as provided in
Section 9.3 except in the case of manifest error. The Company, having paid an
amount pursuant to the preceding sentence and the other provisions of this
Section 9.3, may nevertheless contest by appropriate proceedings

 

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whether the Bank sustained an increased cost or reduced amount contemplated by
Section 9.3(a) or a reduction in the rate of return contemplated by Section
9.3(b) and, if so, the amount thereof; and the Bank shall refund any amount
found in such a contest not to have been owed. Upon the imposition of any such
cost, the Company may prepay any affected Loan, subject to the provisions of
Sections 2.3 and 9.4 hereof.

Section 9.4.    Funding Indemnity. (a) In the event any Bank shall incur any
loss, cost, expense or premium (including, without limitation, any loss of
profit and any loss, cost, expense or premium incurred by reason of the
liquidation or re-employment of deposits or other funds acquired by such Bank to
fund or maintain any Eurodollar Loan or the relending or reinvesting of such
deposits or amounts paid such Bank) as a result of:

(i)    any payment or prepayment of a Eurodollar Loan on a date other than the
last day of the then applicable Interest Period; or

(ii)    any failure by the Company to borrow any Eurodollar Loan on the date
specified in the notice given pursuant to Section 1.5 hereof;

then, upon the demand of such Bank, the Company shall pay, within thirty-five
(35) days after receipt of demand by such Bank (with a copy to the Agent), to
such Bank such amount as will reimburse such Bank for such loss, cost or
expense.

(b)    If any Bank makes a claim for compensation under this Section 9.4, it
shall provide to the Company a certificate setting forth the amount of such
loss, cost or expense in reasonable detail and an explanation in reasonable
detail of the event giving rise to such claim, all in sufficient detail to
permit the Company to determine whether such certificate meets the standard
required by this Section, and such certificate shall be conclusive and binding
on the Company as to the requested payment becoming due by the Company pursuant
to Section 9.4 except in the case of manifest error. The Company, having paid an
amount pursuant to the preceding sentence and the other provisions of this
Section 9.4, may nevertheless contest by appropriate proceedings whether the
Bank sustained a loss, cost, expense or premium contemplated by Section 9.4(a)
and, if so, the amount thereof; and the Bank shall refund any amount found in
such a contest not to have been owed.

Section 9.5.    Lending Branch. Each Bank may, at its option, elect to make,
fund or maintain its Eurodollar Loans hereunder at the branch or office
specified opposite its signature on the signature page hereof or such other of
its branches or offices as such Bank may from time to time elect, subject to the
provisions of Section 1.5(b) hereof. To the extent reasonably possible, a Bank
shall designate an alternative branch or funding office with respect to its
Eurodollar Loans to reduce any liability of the Company to such Bank under
Section 9.3 hereof or to avoid the unavailability of Eurodollar Loans under
Section 9.1 hereof, so long as such designation is not otherwise disadvantageous
to the Bank.

Section 9.6.    Discretion of Bank as to Manner of Funding. Notwithstanding any
provision of this Agreement to the contrary, each Bank which is match-funding
its Eurodollar Loans shall be entitled to fund and maintain its funding of all
or any part of its Loans in any

 

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manner it sees fit, it being understood however, that for the purposes of this
Agreement all determinations hereunder shall be made as if the Banks which are
match-funding their Eurodollar Loans had actually funded and maintained each
Eurodollar Loan during each Interest Period for such Loan through the purchase
of deposits in the relevant interbank market having a maturity corresponding to
such Interest Period and bearing an interest rate equal to the Adjusted
Eurodollar Rate for such Interest Period.

 

SECTION 10. THE AGENT.

Section 10.1.    Appointment and Authorization of Agent. Each Bank and the
L/C Issuer hereby appoints BMO Harris Bank N.A. as the Agent under the Loan
Documents and hereby authorizes the Agent to take such action as Agent on its
behalf and to exercise such powers under the Loan Documents as are delegated to
the Agent by the terms thereof, together with such powers as are reasonably
incidental thereto. The Banks and L/C Issuers expressly agree that the Agent is
not acting as a fiduciary of the Banks or the L/C Issuers in respect of the Loan
Documents, the Company or otherwise, and nothing herein or in any of the other
Loan Documents shall result in any duties or obligations on the Agent or any of
the Banks or L/C Issuers except as expressly set forth herein.

Section 10.2.    Agent and its Affiliates. The Agent shall have the same rights
and powers under this Agreement and the other Loan Documents as any other Bank
and may exercise or refrain from exercising such rights and power as though it
were not the Agent, and the Agent and its affiliates may accept deposits from,
lend money to, and generally engage in any kind of business with the Company or
any Affiliate of the Company as if it were not the Agent under the Loan
Documents. The term “Bank” as used herein and in all other Loan Documents,
unless the context otherwise clearly requires, includes the Agent in its
individual capacity as a Bank (if applicable).

Section 10.3.    Action by Agent. If the Agent receives from the Company a
written notice of an Event of Default pursuant to Section 7.16 hereof, the Agent
shall promptly give each of the Banks and L/C Issuers written notice thereof.
The obligations of the Agent under the Loan Documents are only those expressly
set forth therein. Without limiting the generality of the foregoing, the Agent
shall not be required to take any action hereunder with respect to any Potential
Default or Event of Default, except as expressly provided in Section 8.2. Unless
and until the Required Banks give such direction, the Agent may (but shall not
be obligated to) take or refrain from taking such actions as it deems
appropriate and in the best interest of all the Banks and L/C Issuers. In no
event, however, shall the Agent be required to take any action in violation of
applicable law or of any provision of any Loan Document, and the Agent shall in
all cases be fully justified in failing or refusing to act hereunder or under
any other Loan Document unless it first receives any further assurances of its
indemnification from the Banks that it may require, including prepayment of any
related expenses and any other protection it requires against any and all costs,
expense, and liability which may be incurred by it by reason of taking or
continuing to take any such action. The Agent shall be entitled to assume that
no Potential Default or Event of Default exists unless notified in writing to
the contrary by a Bank, an L/C Issuer, or the Company. In all cases in which the
Loan Documents do not require the Agent to take specific action, the Agent shall
be fully justified in using its discretion in failing to take or

 

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in taking any action thereunder. Any instructions of the Required Banks, or of
any other group of Banks called for under the specific provisions of the Loan
Documents, shall be binding upon all the Banks and the holders of the Company’s
indebtedness, obligations and liabilities under the Loan Documents.

Section 10.4.    Consultation with Experts. The Agent may consult with legal
counsel, independent public accountants, and other experts selected by it and
shall not be liable for any action taken or omitted to be taken by it in good
faith in accordance with the advice of such counsel, accountants or experts.

Section 10.5.    Liability of Agent; Credit Decision. Neither the Agent nor any
of its directors, officers, agents or employees shall be liable for any action
taken or not taken by it in connection with the Loan Documents: (a) with the
consent or at the request of the Required Banks or (b) in the absence of its own
gross negligence or willful misconduct. Neither the Agent nor any of its
directors, officers, agents or employees shall be responsible for or have any
duty to ascertain, inquire into or verify: (i) any statement, warranty or
representation made in connection with this Agreement, any other Loan Document
or any Loan or L/C; (ii) the performance or observance of any of the covenants
or agreements of the Company or any Subsidiary contained herein or in any other
Loan Document; (iii) the satisfaction of any condition specified in Section 6
hereof, except receipt of items required to be delivered to the Agent; or
(iv) the validity, effectiveness, genuineness, enforceability, perfection,
value, worth or collectibility hereof or of any other Loan Document or of any
other documents or writing furnished in connection with any Loan Document; and
the Agent makes no representation of any kind or character with respect to any
such matter mentioned in this sentence. The Agent may execute any of its duties
under any of the Loan Documents by or through employees, agents, and
attorneys-in-fact and shall not be answerable to the Banks, the L/C Issuers, the
Company, or any other Person for the default or misconduct of any such agents or
attorneys-in-fact selected with reasonable care. The Agent shall not incur any
liability by acting in reliance upon any notice, consent, certificate, other
document or statement (whether written or oral) believed by it to be genuine or
to be sent by the proper party or parties. In particular and without limiting
any of the foregoing, the Agent shall have no responsibility for confirming the
accuracy of any compliance certificate or other document or instrument received
by it under the Loan Documents. The Agent may treat the payee of any of the
Company’s indebtedness, obligations and liabilities under the Loan Documents as
the holder thereof until written notice of transfer shall have been filed with
the Agent signed by such payee in form satisfactory to the Agent. Each Bank and
L/C Issuer acknowledges that it has independently and without reliance on the
Agent or any other Bank or L/C Issuer, and based upon such information,
investigations and inquiries as it deems appropriate, made its own credit
analysis and decision to extend credit to the Company in the manner set forth in
the Loan Documents. It shall be the responsibility of each Bank and L/C Issuer
to keep itself informed as to the creditworthiness of the Company and its
Subsidiaries, and the Agent shall have no liability to any Bank or L/C Issuer
with respect thereto.

Section 10.6.    Indemnity. The Banks shall ratably, in accordance with their
respective Commitment Percentage, indemnify and hold the Agent, and its
directors, officers, employees, agents, and representatives harmless from and
against any liabilities, losses, costs or expenses suffered or incurred by it
under any Loan Document or in connection with the transactions

 

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contemplated thereby, regardless of when asserted or arising, except to the
extent they are promptly reimbursed for the same by the Company and except to
the extent that any event giving rise to a claim was caused by the gross
negligence or willful misconduct of the party seeking to be indemnified. The
obligations of the Banks under this Section shall survive termination of this
Agreement. The Agent shall be entitled to offset amounts received for the
account of a Bank under this Agreement against unpaid amounts due from such Bank
to the Agent hereunder (whether as fundings of participations, indemnities or
otherwise), but shall not be entitled to offset against amounts owed to the
Agent by any Bank arising outside of this Agreement and the other Loan
Documents.

Section 10.7.    Resignation of Agent and Successor Agent. The Agent may resign
at any time by giving written notice thereof to the Banks, the L/C Issuer, and
the Company. Upon any such resignation of the Agent, the Required Banks shall
have the right to appoint a successor Agent. If no successor Agent shall have
been so appointed by the Required Banks, and shall have accepted such
appointment, within thirty (30) days after the retiring Agent’s giving of notice
of resignation then the retiring Agent may, on behalf of the Banks, appoint a
successor Agent, which may be any Bank hereunder or any commercial bank, or an
Affiliate of a commercial bank, having an office in the United States of America
and having a combined capital and surplus of at least $250,000,000 and be
approved by the Company (which approval shall not be unreasonably withheld).
Upon the acceptance of its appointment as the Agent hereunder, such successor
Agent shall thereupon succeed to and become vested with all the rights and
duties of the retiring Agent under the Loan Documents, and the retiring Agent
shall be discharged from its duties and obligations thereunder. After any
retiring Agent’s resignation hereunder as Agent, the provisions of this
Section 10 and all protective provisions of the other Loan Documents shall inure
to its benefit as to any actions taken or omitted to be taken by it while it was
Agent, but no successor Agent shall in any event be liable or responsible for
any actions of its predecessor. If the Agent resigns and no successor is
appointed, the rights and obligations of such Agent shall be automatically
assumed by the Required Banks and the Company shall be directed to make all
payments due each Bank and L/C Issuer hereunder directly to such Bank or
L/C Issuer.

Section 10.8.    L/C Issuer and Swing Line Bank. Each L/C Issuer shall act on
behalf of the Banks with respect to any L/Cs issued by it and the documents
associated therewith, and the Swing Line Bank shall act on behalf of the Banks
with respect to the Swing Loans made hereunder. The L/C Issuers and the Swing
Line Bank shall each have all of the benefits and immunities (a) provided to the
Agent in this Section 10 with respect to any acts taken or omissions suffered by
any L/C Issuer in connection with L/Cs issued by it or proposed to be issued by
it and the Agreements pertaining to such L/Cs or by the Swing Line Bank in
connection with Swing Loans made or to be made hereunder as fully as if the term
“Agent”, as used in this Section 10, included the L/C Issuers and the Swing Line
Bank with respect to such acts or omissions, and (b) as additionally provided in
this Agreement with respect to such L/C Issuer or Swing Line Bank, as
applicable.

Section 10.9.    Designation of Additional Agents. The Agent shall have the
continuing right, for purposes hereof, at any time and from time to time to
designate one or more of the Banks (and/or its or their Affiliates) as
“syndication agents,” “documentation agents,” “book

 

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runners,” “lead arrangers,” “arrangers,” or other designations for purposes
hereto, but such designation shall have no substantive effect, and such Banks
and their Affiliates shall have no additional powers, duties or responsibilities
as a result thereof.

 

SECTION 11. MISCELLANEOUS.

Section 11.1.    Amendments and Waivers. Any provision of this Agreement or the
other Loan Documents may be amended or waived if, but only if, such amendment or
waiver is in writing and is signed by (a) the Company, (b) the Required Banks,
and (c) if the rights or duties of the Agent, the relevant L/C Issuer, or the
Swing Line Bank are affected thereby, the Agent, such L/C Issuer, or the Swing
Line Bank, as applicable; provided that:

(i)    no amendment or waiver pursuant to this Section 11.1 shall (A) increase
any Commitment of any Bank without the consent of such Bank or (B) reduce the
amount of or postpone the date for any scheduled payment of any principal of or
interest on any Loan or of any Reimbursement Obligation or of any fee payable
hereunder without the consent of the Bank to which such payment is owing or
which has committed to make such Loan or L/C (or participate therein) hereunder;
and

(ii)    no amendment or waiver pursuant to this Section 11.1 shall, unless
signed by each Bank, extend the Revolving Credit Termination Date, change the
definition of Required Banks, change the provisions of this Section 11.1,
release any material guarantor, or affect the number of Banks required to take
any action hereunder or under any other Loan Document.

Notwithstanding anything to the contrary herein, no Defaulting Lender shall have
any right to approve or disapprove any amendment, waiver or consent hereunder
(and any amendment, waiver or consent which by its terms requires the consent of
all Banks or each affected Bank may be effected with the consent of the
applicable Banks other than Defaulting Lenders, whose interest shall be excluded
in calculating the Required Banks), except that (x) the Commitment of any
Defaulting Lender may not be increased or extended without the consent of such
Bank, and (y) any waiver, amendment or modification requiring the consent of all
Banks or each affected Bank that by its terms affects any Defaulting Lender more
adversely than other affected Banks shall require the consent of such Defaulting
Lender.

Section 11.2.    Waiver of Rights. No delay or failure on the part of the Agent
or any Bank or on the part of the holder or holders of any Note in the exercise
of any power or right shall operate as a waiver thereof, nor as an acquiescence
in any Potential Default or Event of Default, nor shall any single or partial
exercise of any power or right preclude any other or further exercise thereof,
or the exercise of any other power or right, and the rights and remedies
hereunder of the Agent, the Banks and of the holder or holders of any Notes are
cumulative to, and not exclusive of, any rights or remedies which any of them
would otherwise have.

Section 11.3.    Several Obligations. The commitments of each of the Banks
hereunder shall be the several obligations of each Bank and the failure on the
part of any one or more of the Banks to perform hereunder shall not affect the
obligation of the other Banks hereunder,

 

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provided that nothing herein contained shall relieve any Bank from any liability
for its failure to so perform. In the event that any one or more of the Banks
shall fail to perform its commitment hereunder, all payments thereafter received
by the Agent on the principal of Loans or Reimbursement Obligations hereunder
shall be distributed by the Agent to the Banks making such additional Loans or
Reimbursement Obligations ratably as among them in accordance with the principal
amount of additional Loans or Reimbursement Obligations made by them until such
additional Loans or Reimbursement Obligations shall have been fully paid and
satisfied, and all payments on account of interest shall be applied as among all
the Banks ratably in accordance with the amount of interest owing to each of the
Banks as of the date of the receipt of such interest payment.

Section 11.4.    Non-Business Day. (a) If any payment of principal or interest
on any Domestic Rate Loan shall fall due on a day which is not a Business Day,
interest at the rate such Loan bears for the period prior to maturity shall
continue to accrue on such principal from the stated due date thereof to and
including the next succeeding Business Day on which the same is payable.

(b)    If any payment of principal or interest on any Eurodollar Loan or Swing
Loan at the Swing Line Bank’s Quoted Rate shall fall due on a day which is not a
Business Day, the payment date thereof shall be extended to the next date which
is a Business Day and the Interest Period for such Loan shall be accordingly
extended, unless as a result thereof any payment date would fall in the next
calendar month, in which case such payment date shall be the next preceding
Business Day.

Section 11.5.    Survival of Indemnities. All indemnities and other provisions
relative to reimbursement to the Banks and L/C Issuers of amounts sufficient to
protect the yield of the Banks and L/C Issuers with respect to the Loans and
L/Cs, including, but not limited to, Sections 9.3, 9.4, and 11.9 hereof, shall
survive the termination of this Agreement and the other Loan Documents and the
payment of the Notes.

Section 11.6.    Documentary Taxes. Although the Company is of the opinion that
no documentary or similar taxes are payable in respect to this Agreement or the
Notes, the Company agrees that it will pay such taxes, including interest and
penalties, in the event any such taxes are assessed irrespective of when such
assessment is made and whether or not any credit is then in use or available
hereunder.

Section 11.7.    Representations. All representations and warranties made herein
or in certificates given pursuant hereto shall survive the execution and
delivery of this Agreement and of the Notes, and shall continue in full force
and effect with respect to the date as of which they were made and as reaffirmed
on the date of each borrowing (as and to the extent provided in Section 6.3
hereof) and as long as any credit is in use or available hereunder.

Section 11.8.    Notices. Unless otherwise expressly provided herein, all
communications provided for herein shall be in writing or by telex and shall be
deemed to have been given or made when served personally, when an answer back is
received in the case of notice by telex or 2 days after the date when deposited
in the United States mail (registered, if to the Company)

 

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addressed if to the Company to 127 Flynt Road, Laurel, Mississippi 39443,
Attention: Chief Financial Officer; if to the Agent at 115 South LaSalle Street,
Chicago, Illinois 60603, Attention: Food Group; and if to any of the Banks or
L/C Issuers, at the address for such Bank or L/C Issuer set forth on its
Administrative Questionnaire; or at such other address as shall be designated by
any party hereto in a written notice to each other party pursuant to this
Section 11.8.

Section 11.9.    Costs and Expenses; Environmental Indemnity; Indemnity. (a) The
Company agrees to pay on demand all customary and reasonable out-of-pocket costs
and expenses of the Agent in connection with the negotiation, preparation,
execution and delivery of this Agreement, the Notes and the other instruments
and documents to be delivered hereunder or in connection with the transactions
contemplated hereby (unless otherwise expressly limited herein), including the
reasonable fees and expenses of Chapman and Cutler LLP, special counsel to the
Agent; all reasonable out-of-pocket costs and expenses of the Agent and the
reasonable out-of-pocket costs and expenses of each Bank and L/C Issuer
(including in each case reasonable outside attorneys’ fees and expenses)
incurred in connection with any consents or waivers hereunder or amendments
hereto in each case requested by the Company, and all reasonable out-of-pocket
costs and expenses (including reasonable outside attorneys’ fees and expenses),
if any, incurred by the Agent, the L/C Issuers, the Banks or any other holders
of a Note in connection with the enforcement against the Company or any
Guarantor Subsidiary of this Agreement or the Notes and the other instruments
and documents to be delivered hereunder, including, without limitation, in
connection with any work-out or restructuring.

(b)    Without limiting the generality of the foregoing, the Company
unconditionally agrees to indemnify, defend and hold harmless, the Agent, each
L/C Issuer and each Bank, and covenants not to sue for any claim for
contribution against, the Agent, any L/C Issuer or any Bank for any damages,
costs, loss or expense, including without limitation, response, remedial or
removal costs, arising out of any of the following: (i) any presence, release,
threatened release or disposal of any hazardous or toxic substance or petroleum
by the Company or any Subsidiary or otherwise occurring on or with respect to
their respective Property, (ii) the operation or violation of any Environmental
Law, whether federal, state, or local, and any regulations promulgated
thereunder, by the Company or any Subsidiary or otherwise occurring on or with
respect to their respective Property, (iii) any claim for personal injury or
property damage in connection with the Company or any Subsidiary or otherwise
occurring on or with respect to their respective Property, and (iv) the
inaccuracy or breach of any environmental representation, warranty or covenant
by the Company made herein or in any loan agreement, promissory note, mortgage,
deed of trust, security agreement or any other instrument or document evidencing
or securing any indebtedness, obligations or liabilities of the Company owing to
the Agent, L/C Issuer or any Bank or setting forth terms and conditions
applicable thereto or otherwise relating thereto; provided, however, the
foregoing provisions shall not apply to damages arising from the Agent’s, such
L/C Issuer’s or such Bank’s willful misconduct or gross negligence. This
indemnification shall survive the payment and satisfaction of all indebtedness,
obligations and liabilities of the Company owing to the Agent, the L/C Issuers
and the Banks and the termination of this Agreement, and shall remain in force
beyond the expiration of any applicable statute of limitations and payment or
satisfaction in full of any single claim under this indemnification. This
indemnification shall be binding upon the successors and assigns of the Company
and shall inure to the benefit of Agent, the L/C Issuers and the Banks and their
respective directors, officers, employees, agents, and collateral trustees, and
their successors and assigns.

 

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(c)    Without limiting the foregoing, the Company unconditionally agrees to
indemnify, defend and hold harmless, the Agent, each L/C Issuer and each Bank,
and covenants not to sue for any claim for contribution against, the Agent, any
L/C Issuer or any Bank for all losses, liabilities, claims, damages and
reasonable out of pocket costs and expenses relating to or arising out of the
Loan Documents, the transactions contemplated thereby or the Company’s use of
the Loan proceeds, including, without limitation, reasonable out of pocket
attorney’s fees and settlement costs, provided, however, the foregoing
provisions shall not apply to any losses, liabilities, claims, damages and
expenses arising from the Agent’s, such L/C Issuer’s or such Bank’s willful
misconduct or gross negligence, violation of any law, rule or regulation
applicable to the Agent, such L/C Issuer or such Bank as a lender and any of the
matters covered by Sections 9.3, 9.4 or 11.21.

(d)    The provisions of this Section 11.9 shall survive payment of the Notes
and Reimbursement Obligations and the termination of the L/C Issuers’ and Banks’
Commitments hereunder.

Section 11.10.    Counterparts. This Agreement may be executed in any number of
counterparts and all such counterparts taken together shall be deemed to
constitute one and the same instrument. One or more of the Banks may execute a
separate counterpart of this Agreement which has also been executed by the
Company, and this Agreement shall become effective as and when all of the Banks
have executed this Agreement or a counterpart thereof and lodged the same with
the Agent.

Section 11.11.    Successors and Assigns; Governing Law; Entire Agreement. This
Agreement shall be binding upon each of the Company and the Banks and their
respective successors and assigns, and shall inure to the benefit of the Company
and each of the Banks and the benefit of their respective successors and
assigns, including any subsequent holder of any Note. This Agreement and the
rights and duties of the parties hereto shall be construed and determined in
accordance with the laws of the State of Illinois, without regard to Illinois
conflict of laws principles. This Agreement constitutes the entire understanding
of the parties with respect to the subject matter hereof and any prior
agreements, whether written or oral, with respect thereto are superseded hereby.
The Company may not assign any of its rights or obligations hereunder without
the written consent of all of the Banks. The Banks may assign their rights under
the Loan Documents only in accordance with Sections 11.16 and 11.17 hereof.

Section 11.12.    No Joint Venture. Nothing contained in this Agreement shall be
deemed to create a partnership or joint venture among the parties hereto.

Section 11.13.    Severability. In the event that any term or provision hereof
is determined to be unenforceable or illegal, it shall be deemed severed
herefrom to the extent of the illegality and/or unenforceability and all other
provisions hereof shall remain in full force and effect.

 

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Section 11.14.    Table of Contents and Headings. The table of contents and
section headings in this Agreement are for reference only and shall not affect
the construction of any provision hereof.

Section 11.15.    Sharing of Payments. Each Bank agrees with each other Bank
that if such Bank shall receive and retain any payment, whether by set-off or
application of deposit balances or otherwise (“Set-Off”), on any Loan,
Reimbursement Obligation or other amount outstanding under this Agreement in
excess of its ratable share of payments on all Loans, Reimbursement Obligations
and other amounts then outstanding to the Banks, then such Bank shall purchase
for cash at face value, but without recourse, ratably from each of the other
Banks such amount of the Loans and Reimbursement Obligations held by each such
other Bank (or interest therein) as shall be necessary to cause such Bank to
share such excess payment ratably with all the other Banks; provided, however,
that if any such purchase is made by any Bank, and if such excess payment or
part thereof is thereafter recovered from such purchasing Bank, the related
purchases from the other Banks shall be rescinded ratably and the purchase price
restored as to the portion of such excess payment so recovered, but without
interest. Each Bank’s ratable share of any such Set-Off shall be determined by
the proportion that the aggregate principal amount of Loans and Reimbursement
Obligations then due and payable to such Bank bears to the total aggregate
principal amount of Loans and Reimbursement Obligations then due and payable to
all the Banks.

Section 11.16.     Participants. Each Bank shall have the right at its own cost
to grant participations (to be evidenced by one or more agreements or
certificates of participation) in the Loans made and Reimbursement Obligations
and/or Commitments held by such Bank at any time and from time to time to one or
more other Persons (each a “Participant”); provided that no such participation
shall relieve any Bank of any of its obligations under this Agreement, and,
provided, further that no such participant shall have any rights under this
Agreement except as provided in this Section, and the Agent shall have no
obligation or responsibility to such participant. Any agreement pursuant to
which such participation is granted shall provide (a) that the granting Bank
shall retain the sole right and responsibility to enforce the obligations of the
Company under this Agreement and the other Loan Documents including, without
limitation, the right to approve any amendment, modification or waiver of any
provision of the Loan Documents, except that such agreement may provide that
such Bank will not agree to any modification, amendment or waiver of the Loan
Documents that would reduce the amount of or postpone any fixed date for payment
of any indebtedness, obligation or liability in which such participant has an
interest, and (b) that the participant agrees to be bound by Section 11.18 of
this Agreement to the same extent as if it were a Bank. Any party to which such
a participation has been granted shall have the benefits of Section 9.3 and
Section 9.4 hereof. The Company authorizes each Bank to disclose to any
participant or prospective participant under this Section, if such person has
agreed in writing to be bound by Section 11.18 below to the same extent as if it
were a Bank, any financial or other information pertaining to the Company or any
Subsidiary. Each Bank that sells a participation shall acting solely for this
purpose as an agent of the Company maintain a register on which it enters the
name and address of each Participant and the principal amounts (and stated
interest) of each Participant’s interest in the Loans or other obligations under
the Loan Documents (the “Participant Register”); provided that no Bank shall
have any obligation to disclose all or any portion of the Participant Register
(including the

 

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identity of any Participant or any information relating to a Participant’s
interest in any commitments, loans, letters of credit or its other obligations
under any Loan Document) to any Person except to the extent that such disclosure
is necessary to establish that such commitment, loan, letter of credit or other
obligation is in registered form under Section 5f.103-1(c) of the United States
Treasury Regulations. The entries in the Participant Register shall be
conclusive absent manifest error, and such Bank shall treat each Person whose
name is recorded in the Participant Register as the owner of such participation
for all purposes of this Agreement notwithstanding any notice to the contrary.
For the avoidance of doubt, the Agent (in its capacity as Agent) shall have no
responsibility for maintaining a Participant Register.

Section 11.17.    Assignments. (a) Any Bank may at any time assign to one or
more Eligible Assignees all or a portion of such Bank’s rights and obligations
under this Agreement (including all or a portion of its Commitment and the Loans
at the time owing to it); provided that any such assignment shall be subject to
the following conditions:

(i)    Minimum Amounts. (A) In the case of an assignment of the entire remaining
amount of the assigning Bank’s Commitment and the Loans and participation
interest in Reimbursement Obligations at the time owing to it or in the case of
an assignment to a Bank, an Affiliate of a Bank or an Approved Fund, no minimum
amount need be assigned; and (B) in any case not described in subsection
(a)(i)(A) of this Section, the aggregate amount of the Commitment (which for
this purpose includes Loans and participation interest in L/C Obligations
outstanding thereunder) or, if the applicable Commitment is not then in effect,
the principal outstanding balance of the Loans and participation interest in L/C
Obligations of the assigning Bank subject to each such assignment (determined as
of the date the Assignment and Acceptance with respect to such assignment is
delivered to the Agent or, if “Effective Date” is specified in the Assignment
and Acceptance, as of the Effective Date) shall not be less than $5,000,000,
unless each of the Agent and, so long as no Event of Default has occurred and is
continuing, the Company otherwise consents (each such consent not to be
unreasonably withheld or delayed);

(ii)    Proportionate Amounts. Each partial assignment shall be made as an
assignment of a proportionate part of all the assigning Bank’s rights and
obligations under this Agreement with respect to the Loan or the Commitment
assigned.

(iii)    Required Consents. No consent shall be required for any assignment
except to the extent required by Section 11.17(a)(i)(B) and, in addition:

(A)    the consent of the Company (such consent not to be unreasonably withheld
or delayed) shall be required unless (x) an Event of Default has occurred and is
continuing at the time of such assignment or (y) such assignment is to a Bank,
an Affiliate of a Bank or an Approved Fund;

(B)    the consent of the Agent (such consent not to be unreasonably withheld or
delayed) shall be required for assignments in respect of the Revolving Credit if
such assignment is to a Person that is not a Bank with a Commitment in respect
of such facility, an Affiliate of such Bank or an Approved Fund with respect to
such Bank;

 

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(C)    the consent of the relevant L/C Issuer (such consent not to be
unreasonably withheld or delayed) shall be required for any assignment that
increases the obligation of the assignee to participate in exposure under one or
more applicable L/Cs (whether or not then outstanding); and

(D)    the consent of the Swing Line Bank (such consent not to be unreasonably
withheld or delayed) shall be required for any assignment that increases the
obligation of the assignee to participate in exposure under one or more Swing
Loans (whether or not then outstanding).

(iv)    Assignment and Acceptance. The parties to each assignment shall execute
and deliver to the Agent an Assignment and Acceptance, together with a
processing and recordation fee of $3,500 payable by the assignor (except in the
case of an assignment by a Bank to an Approved Fund), and the assignee, if it is
not a Bank, shall deliver to the Agent an Administrative Questionnaire.

(v)    No Assignment to Company or Affiliate. No such assignment shall be made
to the Company or any of its Affiliates or Subsidiaries.

(vi)    No Assignment to Natural Persons. No such assignment shall be made to a
natural person.

Subject to acceptance and recording thereof by the Agent pursuant to
Section 11.17(b) hereof, from and after the effective date specified in each
Assignment and Acceptance, the assignee thereunder shall be a party to this
Agreement and, to the extent of the interest assigned by such Assignment and
Acceptance, have the rights and obligations of a Bank under this Agreement, and
the assigning Bank thereunder shall, to the extent of the interest assigned by
such Assignment and Acceptance, be released from its obligations under this
Agreement (and, in the case of an Assignment and Acceptance covering all of the
assigning Bank’s rights and obligations under this Agreement, such Bank shall
cease to be a party hereto) but shall continue to be entitled to the benefits of
Sections 11.5 and 11.9 with respect to facts and circumstances occurring prior
to the effective date of such assignment. Any assignment or transfer by a Bank
of rights or obligations under this Agreement that does not comply with this
Section shall be treated for purposes of this Agreement as a sale by such Bank
of a participation in such rights and obligations in accordance with
Section 11.16 hereof.

(b)    Register. The Agent, acting solely for this purpose as an agent of the
Company, shall maintain at one of its offices in Chicago, Illinois, a copy of
each Assignment and Acceptance delivered to it and a register for the
recordation of the names and addresses of the Banks, and the Commitments of, and
principal amounts of the Loans owing to, each Bank pursuant to the terms hereof
from time to time (the “Register”). The entries in the Register shall be
conclusive, and the Company, the Agent, and the Banks may treat each Person
whose name is recorded in the Register pursuant to the terms hereof as a Bank
hereunder for all purposes of this Agreement, notwithstanding notice to the
contrary. The Register shall be available for inspection by the Company and any
Bank, at any reasonable time and from time to time upon reasonable prior notice.

 

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(c)    Any Bank may at any time pledge or grant a security interest in all or
any portion of its rights under this Agreement to secure obligations of such
Bank, including any such pledge or grant to a Federal Reserve Bank or the
central bank of the country in which such Bank is organized, and this Section
shall not apply to any such pledge or grant of a security interest; provided
that no such pledge or grant of a security interest shall release a Bank from
any of its obligations hereunder or substitute any such pledgee or secured party
for such Bank as a party hereto; provided further, however, the right of any
such pledgee or grantee (other than any Federal Reserve Bank or central bank) to
further transfer all or any portion of the rights pledged or granted to it,
whether by means of foreclosure or otherwise, shall be at all times subject to
the terms of this Agreement.

(d)    Notwithstanding anything to the contrary herein, if at any time the Swing
Line Bank assigns all of its Commitments and Loans pursuant to subsection
(a) above, the Swing Line Bank may terminate the Swing Line. In the event of
such termination of the Swing Line, the Company shall be entitled to appoint
another Bank to act as the successor Swing Line Bank hereunder (with such Bank’s
consent); provided, however, that the failure of the Company to appoint a
successor shall not affect the resignation of the Swing Line Bank. If the Swing
Line Bank terminates the Swing Line, it shall retain all of the rights of the
Swing Line Bank provided hereunder with respect to Swing Loans made by it and
outstanding as of the effective date of such termination, including the right to
require Banks to make Loans or fund participations in outstanding Swing Loans
pursuant to Section 1.3 hereof.

Section 11.18.    Confidentiality. Each Bank will keep confidential any
non-public information concerning the Company and its Subsidiaries furnished by
the Company (which is designated by the Company as confidential at the time such
information is furnished to the Bank or is actually known by such Bank to be
confidential) or obtained by such Bank through its inspections and audits
pursuant to Section 7.5 hereof or any Security Document and known by such Bank
to be confidential, except that any Bank may disclose such information (a) to
regulatory authorities having jurisdiction, (b) pursuant to subpoena or other
legal process including in connection with any pledge or assignment permitted
under Section 11.17(c), (c) to such Bank’s counsel and auditors in connection
with matters concerning this Agreement, (d) to such Bank’s consultants in
connection with negotiations concerning this Agreement or the other Loan
Documents, and (e) to prospective participants or assignees in the Loans and
participants and assignees in the Loans, provided that any Persons described in
clauses (d) and (e) shall first agree in writing to be bound to comply with the
terms of this Section to the same extent as if it were a Bank. In the situations
described above (except where the Company is a party), each Bank shall notify
the Company as promptly as practicable of the receipt of a request for such
disclosure and furnish it with a copy of such subpoena or other legal process
(to the extent such Bank is legally permitted to do so), and permit the Company
the opportunity to seek to oppose or limit any such subpoena or legal process,
at its expense, or to consent to the disclosure requested by such subpoena or
legal process. The provisions of this Section shall survive for a period of two
(2) years following the payment of the Loans and Reimbursement Obligations and
the termination of this Agreement.

 

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Section 11.19.     Waiver of Jury Trial. THE COMPANY, THE AGENT AND EACH BANK
HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL
PROCEEDING ARISING OUT OF OR RELATIVE TO ANY LOAN DOCUMENT OR THE TRANSACTIONS
CONTEMPLATED THEREBY.

Section 11.20.    USA Patriot Act. Each Bank that is subject to the requirements
of the USA Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26,
2001)) (the “Act”) hereby notifies the Company that pursuant to the requirements
of the Act, it is required to obtain, verify, and record information that
identifies the Company, which information includes the name and address of the
Company and other information that will allow such Bank to identify the Company
in accordance with the Act.

Section 11.21.    Taxes. (a) Certain Defined Terms. For purposes of this
Section, the term “Bank” includes any L/C Issuer and the term “applicable law”
includes FATCA.

(b)    Payments Free of Taxes. Any and all payments by or on account of any
obligation of the Company or any Guarantor Subsidiary under any Loan Document
shall be made without deduction or withholding for any Taxes, except as required
by applicable law. If any applicable law (as determined in the good faith
discretion of an applicable Withholding Agent) requires the deduction or
withholding of any Tax from any such payment by a Withholding Agent, then the
applicable Withholding Agent shall be entitled to make such deduction or
withholding and shall timely pay the full amount deducted or withheld to the
relevant Governmental Authority in accordance with applicable law and, if such
Tax is an Indemnified Tax, then the sum payable by the applicable Company or
Guarantor Subsidiary shall be increased as necessary so that after such
deduction or withholding has been made (including such deductions and
withholdings applicable to additional sums payable under this Section) the
applicable Recipient receives an amount equal to the sum it would have received
had no such deduction or withholding been made.

(c)    Payment of Other Taxes by the Loan Parties. The Company and the Guarantor
Subsidiaries shall timely pay to the relevant Governmental Authority in
accordance with applicable law, or at the option of the Agent timely reimburse
it for the payment of, any Other Taxes that are not Excluded Taxes.

(d)    Indemnification by the Loan Parties. The Company and the Guarantor
Subsidiaries shall jointly and severally indemnify each Recipient, within
ten (10) days after receipt of demand therefor, for the full amount of any
Indemnified Taxes (including Indemnified Taxes imposed or asserted on or
attributable to amounts payable under this Section) payable or paid by such
Recipient or required to be withheld or deducted from a payment to such
Recipient and any reasonable out-of-pocket expenses arising therefrom or with
respect thereto, whether or not such Indemnified Taxes were correctly or legally
imposed or asserted by the relevant Governmental Authority.

(e)    Indemnification by the Banks. Each Bank shall severally indemnify the
Agent, within ten (10) days after demand therefor, for (i) any Indemnified Taxes
attributable to such Bank (but only to the extent that the Company or any
Guarantor Subsidiary has not already indemnified the Agent for such Indemnified
Taxes and without limiting the obligation of the

 

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Company and the Guarantor Subsidiaries to do so), (ii) any Taxes attributable to
such Bank’s failure to comply with the provisions of Section 11.16 relating to
the maintenance of a Participant Register and (iii) any Excluded Taxes
attributable to such Bank, in each case, that are payable or paid by the Agent
in connection with any Loan Document, and any reasonable expenses arising
therefrom or with respect thereto, whether or not such Taxes were correctly or
legally imposed or asserted by the relevant Governmental Authority. A
certificate as to the amount of such payment or liability delivered to any Bank
by the Agent shall be conclusive absent manifest error. Each Bank hereby
authorizes the Agent to set off and apply any and all amounts at any time owing
to such Bank under any Loan Document or otherwise payable by the Agent to the
Bank from any other source against any amount due to the Agent under this
subsection (e).

(f)    Evidence of Payments. As soon as practicable after any payment of Taxes
by the Company or any Guarantor Subsidiary to a Governmental Authority pursuant
to this Section, such Person shall deliver to the Agent the original or a
certified copy of a receipt issued by such Governmental Authority evidencing
such payment, a copy of the return reporting such payment or other evidence of
such payment reasonably satisfactory to the Agent.

(g)    Status of Lenders. (i) Any Bank that is entitled to an exemption from or
reduction of withholding Tax with respect to payments made under any Loan
Document shall deliver to the Company and the Agent, at the time or times
reasonably requested by the Company or the Agent, such properly completed and
executed documentation reasonably requested by the Company or the Agent as will
permit such payments to be made without withholding or at a reduced rate of
withholding. In addition, any Bank, if reasonably requested by the Company or
the Agent, shall deliver such other documentation prescribed by applicable law
or reasonably requested by the Company or the Agent as will enable the Company
or the Agent to determine whether or not such Bank is subject to backup
withholding or information reporting requirements. Notwithstanding anything to
the contrary in the preceding two sentences, the completion, execution and
submission of such documentation (other than such documentation set forth in
Section 11.21(g)(ii)(A), (ii)(B) and (ii)(D) below) shall not be required if in
the Bank’s reasonable judgment the reasons for which are communicated to the
Company and the Agent, such completion, execution or submission would subject
such Bank to any material unreimbursed cost or expense or would materially
prejudice the legal or commercial position of such Bank.

(ii)    Without limiting the generality of the foregoing,

(A)    any Bank that is a U.S. Person shall deliver to the Company and the Agent
on or prior to the date on which such Bank becomes a Bank under this Agreement
(and from time to time thereafter upon the reasonable request of the Company or
the Agent), executed originals of IRS Form W-9 certifying that such Bank is
exempt from U.S. federal backup withholding tax;

(B)    any Foreign Lender shall, to the extent it is legally entitled to do so,
deliver to the Company and the Agent (in such number of copies as shall be
requested by them) on or prior to the date on which such Foreign Lender becomes
a Bank under this

 

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Agreement (and from time to time thereafter upon the reasonable request of the
Company or the Agent), whichever of the following is applicable:

(1)    in the case of a Foreign Lender claiming the benefits of an income tax
treaty to which the United States is a party (x) with respect to payments of
interest under any Loan Document, executed originals of IRS Form W-8BEN (or any
substitute form) establishing an exemption from, or reduction of, U.S. federal
withholding Tax pursuant to the “interest” article of such tax treaty, and
(y) with respect to any other applicable payments under any Loan Document, IRS
Form W-8BEN (or any substitute form) establishing an exemption from, or
reduction of, U.S. federal withholding Tax pursuant to the “business profits” or
“other income” article of such tax treaty;

(2)    executed originals of IRS Form W-8ECI (or any substitute form);

(3)    in the case of a Foreign Lender claiming the benefits of the exemption
for portfolio interest under Section 881(c) of the Code (or comparable successor
provisions), (x) a certificate substantially in the form of Exhibit J-1 to the
effect that such Foreign Lender is not a “bank” within the meaning of Section
881(c)(3)(A) of the Code (or comparable successor provisions), a “10 percent
shareholder” of the Borrower within the meaning of Section 881(c)(3)(B) of the
Code (or comparable successor provisions), or a “controlled foreign corporation”
described in Section 881(c)(3)(C) of the Code (or comparable successor
provisions) (a “U.S. Tax Compliance Certificate”) and (y) executed originals of
IRS Form W-8BEN (or any substitute form); or

(4)    to the extent a Foreign Lender is not the beneficial owner, executed
originals of IRS Form W-8IMY (or any substitute form), accompanied by IRS Form
W-8ECI (or any substitute form), IRS Form W-8BEN (or any substitute form), a
U.S. Tax Compliance Certificate substantially in the form of Exhibit J-2 or
Exhibit J-3, IRS Form W-9 (or any substitute form), and/or other certification
documents from each beneficial owner, as applicable; provided that if the
Foreign Lender is a partnership and one or more direct or indirect partners of
such Foreign Lender are claiming the portfolio interest exemption, such Foreign
Lender may provide a U.S. Tax Compliance Certificate substantially in the form
of Exhibit J-4 on behalf of each such direct and indirect partner;

(C)    any Foreign Lender shall, to the extent it is legally entitled to do so,
deliver to the Company and the Agent (in such number of copies as shall be
requested by them) on or prior to the date on which such Foreign Lender becomes
a Bank under this Agreement (and from time to time thereafter upon the
reasonable request of the Company or the Agent), executed originals of any other
form prescribed by applicable law as a basis for claiming exemption from or a
reduction in U.S. federal withholding Tax, duly completed, together with such
supplementary documentation as may be prescribed by applicable law to permit the
Company or the Agent to determine the withholding or deduction required to be
made; and

 

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(D)    if a payment made to a Bank under any Loan Document would be subject to
U.S. federal withholding Tax imposed by FATCA if such Bank were to fail to
comply with the applicable reporting requirements of FATCA (including those
contained in Section 1471(b) or 1472(b) of the Code (or comparable successor
provision), as applicable), such Bank shall deliver to the Company and the Agent
at the time or times prescribed by law and at such time or times reasonably
requested by the Company or the Agent such documentation prescribed by
applicable law (including as prescribed by Section 1471(b)(3)(C)(i) of the Code
(or comparable successor provision)) and such additional documentation
reasonably requested by the Company or the Agent as may be necessary for the
Company and the Agent to comply with their obligations under FATCA and to
determine that such Bank has complied with such Bank’s obligations under FATCA
or to determine the amount to deduct and withhold from such payment. Solely for
purposes of this clause (D), “FATCA” shall include any amendments made to FATCA
after the date of this Agreement.

Each Bank agrees that if any form or certification it previously delivered
expires or becomes obsolete or inaccurate in any respect, it shall update such
form or certification or promptly notify the Company and the Agent in writing of
its legal inability to do so and the reasons therefor.

(h)    Treatment of Certain Refunds. If any party determines, in its sole
discretion exercised in good faith, that it has received a refund of any Taxes
as to which it has been indemnified pursuant to this Agreement (including by the
payment of additional amounts pursuant to this Section), it shall pay to the
indemnifying party an amount equal to such refund (but only to the extent of
indemnity payments made under this Agreement with respect to the Taxes giving
rise to such refund), net of all otherwise unreimbursed out-of-pocket expenses
(including Taxes) of such indemnified party incurred in connection with such
refund and without interest except in the event of unreasonable delay (other
than any interest paid by the relevant Governmental Authority with respect to
such refund). The ability to reduce the payment of refunds to an indemnifying
party by otherwise unreimbursed out-of-pocket expenses (including Taxes)
incurred in connection with such refund shall apply for the purposes of this
Agreement in each case the recipient has received a refund of an indemnified
amount from a taxing authority whether under this Section 11.21, Section 9.3, or
Section 9.4, or otherwise under this Agreement. Such indemnifying party, upon
the request of such indemnified party, shall repay to such indemnified party the
amount paid over pursuant to this subsection (h) (plus any penalties, interest
or other charges imposed by the relevant Governmental Authority) in the event
that such indemnified party is required to repay such refund to such
Governmental Authority. Notwithstanding anything to the contrary in this
subsection (h), in no event will the indemnified party be required to pay any
amount to an indemnifying party pursuant to this subsection (h) the payment of
which would place the indemnified party in a less favorable net after-Tax
position than the indemnified party would have been in if the Tax subject to
indemnification had not been deducted, withheld or otherwise imposed and the
indemnification payments or additional amounts giving rise to such refund had
never been paid. This subsection shall not be construed to require any
indemnified party to make available its Tax returns (or any other information
relating to its Taxes that it deems confidential) to the indemnifying party or
any other Person.

 

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(i)    Survival. Each party’s obligations under this Section shall survive the
resignation or replacement of the Agent or any assignment of rights by, or the
replacement of, a Bank, the termination of the Commitments and the repayment,
satisfaction or discharge of all obligations under any Loan Document.

(j)    Certificate; Contest; Refund. If any recipient makes a claim for payment
from the Company or any Guarantor Subsidiary pursuant to Section 11.21(b), (c)
or (d), it shall provide to the Company a certificate setting forth such claim,
a calculation thereof in reasonable detail and an explanation in reasonable
detail of the factual and legal basis giving rise to the Tax for which payment
is sought, and a calculation thereof, all in sufficient detail to permit the
Company to determine the validity of the claim and the accuracy of the amount,
and such certificate shall be conclusive and binding on the Company as to the
requested payment becoming due by the Company pursuant to Section 11.21(b), (c)
or (d), as applicable, except in the case of manifest error. The Company, having
paid an amount pursuant to the preceding sentence and the other provisions of
Section 11.21, may nevertheless contest by appropriate proceedings whether the
Tax that is the basis of the Recipient’s claim was incurred by the Recipient
and, if so, the amount thereof; and the Recipient shall refund any amount found
in such a contest not to have been owed. If any Taxes are required to be
withheld on payments under this Agreement or indemnified pursuant to this
Section 11.21, the Company or the Guarantor Subsidiaries shall, if required by
Section 11.21, pay such amounts to the relevant taxing authority on or before
the date such payments are due, or if such amounts have already been paid by the
Recipient to the Recipient pursuant to paragraph (d) of this Section 11.21. If
the Company or a Guarantor Subsidiary believes that it is more likely than not
that an amount of such Taxes for which payment has been made or reimbursed by it
may be recovered by a request for refund or filing an amended return and the
amount of such Taxes is in excess of $100,000 (including comparable Taxes
related to the same issue that are expected to be imposed on all Recipients due
to the transactions contemplated by this Agreement), the Recipient shall at the
Company’s expense reasonably cooperate in filing a request for refund or an
amended return and reasonably respond to requests for information by the
Company, Guarantor Subsidiary or Governmental Authority. If the relevant taxing
authority does not agree to the request for refund, the Recipient shall
reasonably cooperate with the Company in contesting the denial for the request
for refund. The Recipient shall not be obligated to pursue the matter further
than one level of appeal. Under no circumstances will the Recipient be obligated
to provide the Recipient’s tax returns or other confidential information
relating to Taxes to the Company or Guarantor Subsidiaries. The Recipient shall
have no obligation to contest a denial if the Recipient reasonably determines
that the cost of the contest will be in excess of the amount in controversy.

Section 11.22.    Waiver of Borrower’s Rights. The Company acknowledges and
agrees that, to the extent the provisions of the Agricultural Credit Act of
1987, including, without limitation, 12 U.S.C. §§2199 through 2202e, and the
implementing Farm Credit Administration regulations, 12 C.F.R. §617.7000, et
seq. (collectively, the “Farm Credit Law”) apply to the Company or to the
transactions contemplated by this Agreement, they hereby irrevocably waive all
statutory or regulatory rights of a borrower to disclosure of effective interest
rates, differential interest rates, review of credit decisions, distressed loan
restructuring, and rights of first refusal under the Farm Credit Law (“Borrower
Rights”). The Company acknowledges and agrees that the waiver of Borrower Rights
provided by this Section is knowingly and voluntarily made after the Company

 

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has consulted with legal counsel of its choice and has been represented by
counsel of its choice in connection with the negotiation of this Agreement and
the waiver of Borrower Rights set forth in this Section. The Company
acknowledges that its waiver of Borrower Rights set forth in this Section is
based on its recognition that such waiver is material to induce commercial banks
and other non-Farm Credit System institutions to participate in the extensions
of credit contemplated by this Agreement and to provide extensions of credit to
the Company. Nothing contained in this Section, nor the delivery to Company of
any summary of any rights under, or any notice pursuant to, the Farm Credit Law
shall be deemed to be, or be constructed to indicate the determination or
agreement by the Company, the Agent, or any Bank that the Farm Credit Law, or
any rights thereunder, are or will be applicable to the Company or to the
transactions contemplated by this Agreement. It is the intent of the Company
that the waiver of Borrower Rights contained in this Section complies with and
meets all of the requirements of 12 C.F.R. §617.7010(c).

 

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This Credit Agreement is entered into between us for the uses and purposes
hereinabove set forth as of the date first above written.

 

SANDERSON FARMS, INC. By:  

/s/ D. Michael Cockrell

    Its: CFO and Treasurer

Accepted and Agreed to as of the day and year last above written.

 

BMO HARRIS BANK N.A., as Agent and an L/C Issuer

By:  

/s/ David Bechstein

    Its: Director

 

Sanderson Farms, Inc.

Signature Page to Credit Agreement

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“BANKS”

BMO HARRIS FINANCING, INC. By:  

/s/ David Bechstein

    Its: Director

 

Sanderson Farms, Inc.

Signature Page to Credit Agreement

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AGFIRST FARM CREDIT BANK By:  

/s/ Matt Jeffords

    Its: Vice President

 

Sanderson Farms, Inc.

Signature Page to Credit Agreement

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FARM CREDIT BANK OF TEXAS By:  

/s/ Alan Robinson

    Its: Vice President

 

Sanderson Farms, Inc.

Signature Page to Credit Agreement

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FARM CREDIT SERVICES OF AMERICA, PCA By:  

/s/ Bruce Dean

    Its: Vice President

 

Sanderson Farms, Inc.

Signature Page to Credit Agreement

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REGIONS BANK By:  

/s/ Stanley Herren

    Its: Senior Vice President

 

Sanderson Farms, Inc.

Signature Page to Credit Agreement

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BANK OF THE WEST By:  

/s/ Trevor Svoboda

    Its: Vice President

 

Sanderson Farms, Inc.

Signature Page to Credit Agreement

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1ST FARM CREDIT SERVICES, PCA By:  

/s/ Lee Fuchs

    Its: Vice President, Capital Markets Group

 

Sanderson Farms, Inc.

Signature Page to Credit Agreement

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AGSTAR FINANCIAL SERVICES, PCA By:  

/s/ Graham J. Dee

    Its: VP Capital Markets

 

Sanderson Farms, Inc.

Signature Page to Credit Agreement

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FARM CREDIT MID-AMERICA, PCA By:  

/s/ Daniel Jordan

    Its: Credit Officer Capital Markets

 

Sanderson Farms, Inc.

Signature Page to Credit Agreement

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UNITED FCS, PCA d/b/a FCS COMMERCIAL

        FINANCE GROUP

By:  

/s/ Lisa Caswell

    Its: Vice President

 

Sanderson Farms, Inc.

Signature Page to Credit Agreement

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NORTHWEST FARM CREDIT SERVICES, PCA By:  

/s/ Paul Hadley

    Its: Vice President

 

Sanderson Farms, Inc.

Signature Page to Credit Agreement

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GREENSTONE FARM CREDIT SERVICES, ACA By:  

/s/ Curt Flammini

    Its: Vice President

 

Sanderson Farms, Inc.

Signature Page to Credit Agreement

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U.S. BANK NATIONAL ASSOCIATION By:  

/s/ Brigitte Sinclair

    Its: Vice President

 

Sanderson Farms, Inc.

Signature Page to Credit Agreement

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AMERICAN AGCREDIT, PCA By:  

/s/ Bradley K. Leafgren

    Its: Vice President

 

Sanderson Farms, Inc.

Signature Page to Credit Agreement

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TRUSTMARK NATIONAL BANK By:  

/s/ William H. Edwards

    Its: Senior Vice President

 

Sanderson Farms, Inc.

Signature Page to Credit Agreement

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FARM CREDIT WEST, PCA By:  

/s/ Robert Stornetta

    Its: Vice President

 

Sanderson Farms, Inc.

Signature Page to Credit Agreement

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BANKPLUS By:  

/s/ Jay Bourne

    Its: FVP

 

Sanderson Farms, Inc.

Signature Page to Credit Agreement

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EXHIBIT A

SANDERSON FARMS, INC.

REVOLVING CREDIT NOTE

            , 20    

FOR VALUE RECEIVED, the undersigned, SANDERSON FARMS, INC., a Mississippi
corporation (the “Company”) promises to pay to the order of                     
(the “Lender”) on the Revolving Credit Termination Date (as defined in the
Credit Agreement referred to below) at the principal office of BMO Harris Bank
N.A. in Chicago, Illinois, the principal sum of                      or, if
less, the aggregate unpaid principal amount of all Revolving Credit Loans made
by the Lender to the Company under the Revolving Credit provided for under the
Credit Agreement hereinafter mentioned and remaining unpaid on the Revolving
Credit Termination Date together with interest on the principal amount of each
Revolving Credit Loan from time to time outstanding hereunder at the rates, and
payable in the manner and on the dates specified in said Credit Agreement.

The Lender shall record on its books or records or on the schedule to this Note
which is a part hereof the principal amount of each Revolving Credit Loan made
under the Revolving Credit, all payments of principal and interest and the
principal balances from time to time outstanding; provided that prior to the
transfer of this Note all such amounts shall be recorded on the schedule
attached to this Note. The record thereof, whether shown on such books or
records or on the schedule to this Note, shall be prima facie evidence as to all
such amounts; provided, however, that the failure of the Lender to record, or
any mistake in recording, any of the foregoing shall not limit or otherwise
affect the obligation of the Company to repay all Revolving Credit Loans made
under the Revolving Credit, together with accrued interest thereon.

This Note is one of the Revolving Notes referred to in and issued under that
certain Credit Agreement dated as of April 28, 2017, among the Company, BMO
Harris Bank N.A., as Agent, and the banks named therein, as amended from time to
time (the “Credit Agreement”), and this Note and the holder hereof are entitled
to all of the benefits and security provided for thereby or referred to therein.
Payment of this Note has been guaranteed pursuant to that certain Guaranty
Agreement dated as of April 28, 2017, from the Guarantor Subsidiaries to the
Banks, to which reference is hereby made for a statement of the terms thereof.
All defined terms used in this Note, except terms otherwise defined herein,
shall have the same meaning as such terms have in said Credit Agreement.

Prepayments may be made on any Revolving Credit Loan evidenced hereby and this
Note (and the Revolving Credit Loans evidenced hereby) may be declared due prior
to the expressed maturity thereof, all in the events, on the terms and in the
manner as provided for in said Credit Agreement.

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The Company hereby waives presentment for payment and demand.

This Note is governed by and shall be construed in accordance with the internal
laws of the State of Illinois.

 

SANDERSON FARMS, INC. By  

                                                               
                   

  Its  

                                                                              

 

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EXHIBIT B

SANDERSON FARMS, INC.

SWING NOTE

 

$10,000,000                , 20    

FOR VALUE RECEIVED, the undersigned, Sanderson Farms, Inc., a Mississippi
corporation (the “Company”), promises to pay to the order of BMO Harris
Financing, Inc. (the “Bank”), at the principal office of BMO Harris Bank N.A. in
Chicago, Illinois, the aggregate unpaid principal amount of all Swing Loans made
by the Bank to the Company under the Credit Agreement hereinafter mentioned in
the amounts and payable in the manner and on the dates specified in said Credit
Agreement, together with interest on the principal amount of each Swing Loan
from time to time outstanding hereunder at the rates, and payable in the manner
and on the dates specified in said Credit Agreement.

This Note is the Swing Note referred to in and issued under that certain Credit
Agreement dated as of April 28, 2017, among the Company, BMO Harris Bank N.A.,
as Agent, and the banks named therein, as amended from time to time (the “Credit
Agreement”), and this Note and the holder hereof are entitled to all of the
benefits and security provided for thereby or referred to therein. Payment of
this Note has been guaranteed pursuant to that certain Guaranty Agreement dated
as of April 28, 2017, from the Guarantor Subsidiaries to the Banks, to which
reference is hereby made for a statement of the terms thereof. All defined terms
used in this Note, except terms otherwise defined herein, shall have the same
meaning as such terms have in said Credit Agreement.

Prepayments may be made on any Swing Loan evidenced hereby and this Note (and
the Swing Loans evidenced hereby) may be declared due prior to the expressed
maturity thereof, all in the events, on the terms and in the manner as provided
for in said Credit Agreement.

The Company hereby waives presentment for payment and demand.

This Note is governed by and shall be construed in accordance with the internal
laws of the State of Illinois.

 

SANDERSON FARMS, INC. By  

 

  Its  

                                                                              

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EXHIBIT C

RESERVED

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EXHIBIT D

SANDERSON FARMS, INC.

GUARANTY AGREEMENT

BMO Harris Bank N.A.

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 April 28, 2017
(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
Sanderson Farms, Inc., a Mississippi corporation (the “Company”), and BMO Harris
Bank N.A., individually and in its capacity as agent thereunder (“BMO Harris”),
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
Harris 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 the Swing Line Bank agrees to make available to the Company a Swing Line
with all loans thereunder to be evidenced by the Swing Note of the Company and
which provides that certain banks and other financial institutions may make term
loans to the Company thereunder with all term loans made thereunder to be
evidenced by the Term Notes of the Company (all such Revolving Notes, Term 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”; provided that in no event shall the Indebtedness include any
Excluded Swap Obligations. 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 Agreement to the
contrary, the right of recovery against each Guarantor under this Guaranty
Agreement shall not exceed $1.00 less than the lowest amount which would render
such Guarantor’s obligations under this Guaranty Agreement 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 Agreement 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
Agreement.

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

 

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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, 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

 

-3-

--------------------------------------------------------------------------------

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 Agreement, 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 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 Agreement be deemed to have continued in existence, notwithstanding
such application, and this Guaranty Agreement 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.

 

-4-

--------------------------------------------------------------------------------

Dated as of this 28th day of April, 2017.

 

      SANDERSON FARMS, INC. (FOODS DIVISION) ATTEST:               By  

 

 

      Its  

 

      SANDERSON FARMS, INC. (PRODUCTION DIVISION) ATTEST:               By  

 

 

      Its  

 

      SANDERSON FARMS, INC. (PROCESSING DIVISION) ATTEST:               By  

 

 

      Its  

                                                               
                             

 

-5-

--------------------------------------------------------------------------------

EXHIBIT E

COMPLIANCE CERTIFICATE

This Compliance Certificate is furnished to BMO Harris Bank N.A., as agent (the
“Agent”), pursuant to that certain Credit Agreement dated as of April 28, 2017,
by and among Sanderson Farms, Inc., a Mississippi corporation (the “Company”),
the Agent and the other Bank parties thereto (the “Agreement”). Unless otherwise
defined herein, the terms used in this Compliance Certificate have the meanings
ascribed thereto in the Agreement.

THE UNDERSIGNED HEREBY CERTIFIES THAT:

1.    I am the duly acting chief                      officer of the Company,
acting herein in such capacity;

2.    I have reviewed the terms of the Agreement and I have made, or have caused
to be made under my supervision, a detailed review of the transactions and
conditions of the Company during the accounting period covered by the attached
financial statements sufficient for me to provide this Certificate;

3.    The examinations described in paragraph 2 did not disclose, and I have no
knowledge of, the existence of any condition or event which constitutes a
Potential Default or Event of Default during or at the end of the accounting
period covered by the attached financial statements or as of the date of this
Certificate, except as set forth below; and

4.    Schedule 1 attached hereto sets forth financial data and computations
evidencing the Company’s compliance with certain covenants of the Agreement, all
of which data and computations are true, complete and correct to the best of my
knowledge, information and belief.

Described below (or on the attached sheet) are the exceptions, if any, to
paragraph 3 by listing, in detail, the nature of the condition or event, the
period during which it has existed and the action which the Company has taken,
is taking or proposes to take with respect to each such condition or event:

 

 

 

--------------------------------------------------------------------------------

The foregoing certifications, together with the computations set forth in
Schedule 1 hereto and the financial statements delivered with this Certificate
in support hereof, are made and delivered this      day of             , 20    .

 

                                                                                
     , as Chief                      Officer of Sanderson Farms, Inc.

 

-2-

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SCHEDULE 1

TO COMPLIANCE CERTIFICATE

SANDERSON FARMS, INC.

Compliance Calculations for

Credit Agreement Dated as of April 28, 2017

Calculations as of the last day of the fiscal quarter ended             , 20    

Section 7.9 Consolidated Tangible Net Worth

 

(a)    Prior Fiscal Quarter’s Required Minimum Amount    $                    
(b)    Consolidated Net Income for Current Fiscal Quarter to “as of” date   
$                     (c)    Dividends declared during Current Fiscal Quarter   
$                     (d)    (b) - (c)*    $                     (e)    60% of
(d)    $                     (f)    Net Proceeds of Stock for Current Fiscal
Quarter to “as of” date    $                     (g)    Current Fiscal Quarter’s
Required Minimum Amount (a) + (e) + (f)    $                     (h)    Current
Fiscal Year Consolidated Tangible Net Worth    $                       
Compliance                    Yes             No            

 

* But not less than $0.

--------------------------------------------------------------------------------

Section 7.10 Leverage Ratio

 

(a)

   Consolidated Indebtedness for Borrowed Money        
$                    

 

(b)

  

Consolidated Indebtedness for Borrowed Money

   $                          

Consolidated Tangible Net Worth

   $                           TOTAL       $                           (a)/(b)
                             * 

 

* Required to not exceed the percentage set forth in Section 7.10.

 

 

Compliance                Yes             No         

  

Section 7.11(a) Capital Expenditures

 

(a)

  

Maximum Amount Allowed

      $                       

(b)

  

Expenditures Year-to-date

      $                           (a)-(b)                                     
*    

Compliance                     Yes             No         

     

Section 7.11(b)(i) Capital Expenditures for Add-On Construction in Jackson,
Mississippi Further Processing Complex    

 

(a)

  

Maximum Amount Allowed

      $ 15,000,000  

(b)

  

Total Expenditures

      $                          

Compliance                     Yes             No         

     

Section 7.11(b)(ii) Capital Expenditures for Tyler, Texas Processing Complex

 

(a)

  

Maximum Amount Allowed

      $ 200,500,000  

(b)

  

Total Expenditures

      $                          

Compliance                     Yes             No         

     

Section 7.11(b)(iii) Capital Expenditures for a Greenfield Further Processing
Complex

 

(a)

  

Maximum Amount Allowed

      $ 60,000,000  

(b)

  

Total Expenditures

      $                           (a)-(b)                                     
*    

Compliance                     Yes             No         

     

 

-2-

--------------------------------------------------------------------------------

Section 7.11(b)(iv) Capital Expenditures for another Greenfield Processing
Complex

 

(a)

  

Maximum Amount Allowed

      $ 210,000,000  

(b)

  

Total Expenditures

      $                           (a)-(b)                                     
*    

Compliance                     Yes             No         

     

Section 7.11(c) Capital Expenditures for the Purchase of Up to Three New Jets

 

(a)

  

Maximum Amount Allowed

      $ 70,000,000  

(b)

  

Total Expenditures

      $                        

Compliance                     Yes             No         

     

 

-3-

--------------------------------------------------------------------------------

EXHIBIT F

ENVIRONMENTAL DISCLOSURE

NONE

--------------------------------------------------------------------------------

EXHIBIT G

SCHEDULE OF SUBSIDIARIES

 

     NAME   

STATE OF

INCORPORATION

  

PERCENTAGE OF

OWNERSHIP

1.

  

Sanderson Farms, Inc.
(Foods Division)

   Mississippi    100%

2.

  

Sanderson Farms, Inc.
(Production Division)

   Mississippi    100%

3.

  

Sanderson Farms, Inc.
(Processing Division)

   Mississippi    100%

--------------------------------------------------------------------------------

EXHIBIT H

LITIGATION; TAX RETURNS; APPROVALS

The Company received the attached demand letter from shareholder Kristopher
Overbo.

--------------------------------------------------------------------------------

EXHIBIT I

ASSIGNMENT AND ACCEPTANCE

Dated             ,         

Reference is made to the Credit Agreement dated as of April 28, 2017 (as
extended, renewed, amended or restated from time to time, the “Credit
Agreement”) among Sanderson Farms, Inc., the Banks and L/C Issuers parties
thereto, and BMO Harris Bank N.A., as Agent (the “Agent”). Terms defined in the
Credit Agreement are used herein with the same meaning.

                                          (the “Assignor”) and
                                         (the “Assignee”) agree as follows:

1.    The Assignor hereby sells and assigns to the Assignee, and the Assignee
hereby purchases and assumes from the Assignor, the amount and specified
percentage interest shown on Annex I hereto of the Assignor’s rights and
obligations under the Credit Agreement as of the Effective Date (as defined
below), including, without limitation, the Assignor’s Commitments as in effect
on the Effective Date and the Loans, if any, owing to the Assignor on the
Effective Date and the Assignor’s Commitment Percentage of any outstanding
Reimbursement Obligations.

2.    The Assignor (i) represents and warrants that it is the legal and
beneficial owner of the interest being assigned by it hereunder and that such
interest is free and clear of any adverse claim, lien, or encumbrance of any
kind; (ii) makes no representation or warranty and assumes no responsibility
with respect to any statements, warranties or representations made in or in
connection with the Credit Agreement or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of the Credit Agreement or any
other instrument or document furnished pursuant thereto; and (iii) makes no
representation or warranty and assumes no responsibility with respect to the
financial condition of the Company or any Subsidiary or the performance or
observance by the Company or any Subsidiary of any of their respective
obligations under the Credit Agreement or any other instrument or document
furnished pursuant thereto.

3.    The Assignee (i) confirms that it has received a copy of the Credit
Agreement, together with copies of the most recent financial statements
delivered to the Banks pursuant to Section 7.4(a) and (b) thereof and such other
documents and information as it has deemed appropriate to make its own credit
analysis and decision to enter into this Assignment and Acceptance; (ii) agrees
that it will, independently and without reliance upon the Agent, the Assignor or
any other Bank and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under the Credit Agreement; (iii) appoints and authorizes the
Agent to take such action as Agent on its behalf and to exercise such powers
under the Credit Agreement and the other Loan Documents as are delegated to the
Agent by the terms thereof, together with such powers as are reasonably

--------------------------------------------------------------------------------

incidental thereto; (iv) agrees that it will perform in accordance with their
terms all of the obligations which by the terms of the Credit Agreement are
required to be performed by it as a Bank; and (v) specifies as its lending
office (and address for notices) the offices set forth on its Administrative
Questionnaire.

4.    As consideration for the assignment and sale contemplated in Annex I
hereof, the Assignee shall pay to the Assignor on the Effective Date in Federal
funds the amount agreed upon between them. It is understood that commitment
and/or letter of credit fees accrued to the Effective Date with respect to the
interest assigned hereby are for the account of the Assignor and such fees
accruing from and including the Effective Date are for the account of the
Assignee. Each of the Assignor and the Assignee hereby agrees that if it
receives any amount under the Credit Agreement which is for the account of the
other party hereto, it shall receive the same for the account of such other
party to the extent of such other party’s interest therein and shall promptly
pay the same to such other party.

5.    The effective date for this Assignment and Acceptance shall be
                     (the “Effective Date”). Following the execution of this
Assignment and Acceptance, it will be delivered to the Agent for acceptance and
recording by the Agent and, if required, the Company.

6.    Upon such acceptance and recording, as of the Effective Date, (i) the
Assignee shall be a party to the Credit Agreement and, to the extent provided in
this Assignment and Acceptance, have the rights and obligations of a Bank
thereunder and (ii) the Assignor shall, to the extent provided in this
Assignment and Acceptance, relinquish its rights and be released from its
obligations under the Credit Agreement.

7.    Upon such acceptance and recording, from and after the Effective Date, the
Agent shall make all payments under the Credit Agreement in respect of the
interest assigned hereby (including, without limitation, all payments of
principal, interest and commitment fees with respect thereto) to the Assignee.
The Assignor and Assignee shall make all appropriate adjustments in payments
under the Credit Agreement for periods prior to the Effective Date directly
between themselves.

 

-2-

--------------------------------------------------------------------------------

8.    This Assignment and Acceptance shall be governed by, and construed in
accordance with, the laws of the State of Illinois.

 

[ASSIGNOR BANK] By     Name  

 

  Title  

 

[ASSIGNEE BANK] By       Name  

                                                                         

  Title  

 

 

Accepted and consented this      day of                      SANDERSON FARMS,
INC. By  

 

  Name  

 

  Title  

 

Accepted and consented to by the Administrative   Agent and L/C Issuer this    
day of                    

BMO HARRIS BANK N.A.,

as Agent and L/C Issuer

By  

 

  Name  

 

  Title  

                                                                     

 

-3-

--------------------------------------------------------------------------------

ANNEX I

TO ASSIGNMENT AND ACCEPTANCE

The assignee hereby purchases and assumes from the assignor the following
interest in and to all of the Assignor’s rights and obligations under the Credit
Agreement as of the effective date.

 

FACILITY ASSIGNED    AGGREGATE
COMMITMENT/LOANS
FOR ALL BANKS      AMOUNT OF
COMMITMENT/LOANS
ASSIGNED      PERCENTAGE ASSIGNED
OF COMMITMENT/LOANS  

Revolving Credit

   $                                   $                                  
                                 % 

Term Loan

   $                                   $                                  
                                 % 

--------------------------------------------------------------------------------

EXHIBIT J-1

[FORM OF]

U.S. TAX COMPLIANCE CERTIFICATE

(For Foreign Lenders That Are Not Partnerships For U.S. Federal Income Tax
Purposes)

Reference is made to the Credit Agreement dated as of April 28, 2017, (as
extended, renewed, amended or restated from time to time, the “Credit
Agreement”) among Sanderson Farms, Inc., the Banks and L/C Issuer party thereto,
and BMO Harris Bank N.A., as administrative agent (the “Administrative Agent”).
Terms defined in the Credit Agreement are used herein with the same meaning.

Pursuant to the provisions of Section 11.21 of the Credit Agreement, the
undersigned hereby certifies that (i) it is the sole record and beneficial owner
of the Loan(s) (as well as any Note(s) evidencing such Loan(s)) in respect of
which it is providing this certificate, (ii) it is not a bank within the meaning
of Section 881(c)(3)(A) of the Code, (iii) it is not a ten percent shareholder
of the Company within the meaning of Section 871(h)(3)(B) of the Code and
(iv) it is not a controlled foreign corporation related to the Company as
described in Section 881(c)(3)(C) of the Code.

The undersigned has furnished the Administrative Agent and the Company with a
certificate of its non-U.S. Person status on IRS Form W-8BEN. By executing this
certificate, the undersigned agrees that (1) if the information provided on this
certificate changes, the undersigned shall promptly so inform the Company and
the Administrative Agent, and (2) the undersigned shall have at all times
furnished the Company and the Administrative Agent with a properly completed and
currently effective certificate in either the calendar year in which each
payment is to be made to the undersigned, or in either of the two calendar years
preceding such payments.

 

[NAME OF LENDER] By:                                      
                                            Name:
                                                                    Title:
                                                                   

Date:                                     
                                , 20[    ]

--------------------------------------------------------------------------------

EXHIBIT J-2

[FORM OF]

U.S. TAX COMPLIANCE CERTIFICATE

(For Foreign Participants That Are Not Partnerships For U.S. Federal Income Tax
Purposes)

Reference is made to the Credit Agreement dated as of April 28, 2017, (as
extended, renewed, amended or restated from time to time, the “Credit
Agreement”) among Sanderson Farms, Inc., the Banks and L/C Issuer party thereto,
and BMO Harris Bank N.A., as administrative agent (the “Administrative Agent”).
Terms defined in the Credit Agreement are used herein with the same meaning.

Pursuant to the provisions of Section 11.21 of the Credit Agreement, the
undersigned hereby certifies that (i) it is the sole record and beneficial owner
of the participation in respect of which it is providing this certificate,
(ii) it is not a bank within the meaning of Section 881(c)(3)(A) of the Code,
(iii) it is not a ten percent shareholder of the Company within the meaning of
Section 871(h)(3)(B) of the Code, and (iv) it is not a controlled foreign
corporation related to the Company as described in Section 881(c)(3)(C) of the
Code.

The undersigned has furnished its participating Bank with a certificate of its
non-U.S. Person status on IRS Form W8BEN. By executing this certificate, the
undersigned agrees that (1) if the information provided on this certificate
changes, the undersigned shall promptly so inform such Bank in writing, and
(2) the undersigned shall have at all times furnished such Bank with a properly
completed and currently effective certificate in either the calendar year in
which each payment is to be made to the undersigned, or in either of the two
calendar years preceding such payments.

 

[NAME OF PARTICIPANT] By:                                      
                                            Name:
                                                                    Title:
                                                                   

Date:                                     
                                , 20[    ]

--------------------------------------------------------------------------------

EXHIBIT J-3

[FORM OF]

U.S. TAX COMPLIANCE CERTIFICATE

(For Foreign Participants That Are Partnerships For U.S. Federal Income Tax
Purposes)

Reference is made to the Credit Agreement dated as of April 28, 2017, (as
extended, renewed, amended or restated from time to time, the “Credit
Agreement”) among Sanderson Farms, Inc., the Banks and L/C Issuer party thereto,
and BMO Harris Bank N.A., as administrative agent (the “Administrative Agent”).
Terms defined in the Credit Agreement are used herein with the same meaning.

Pursuant to the provisions of Section 11.21 of the Credit Agreement, the
undersigned hereby certifies that (i) it is the sole record owner of the
participation in respect of which it is providing this certificate, (ii) its
direct or indirect partners/members are the sole beneficial owners of such
participation, (iii) with respect such participation, neither the undersigned
nor any of its direct or indirect partners/members is a bank extending credit
pursuant to a loan agreement entered into in the ordinary course of its trade or
business within the meaning of Section 881(c)(3)(A) of the Code, (iv) none of
its direct or indirect partners/members is a ten percent shareholder of the
Company within the meaning of Section 871(h)(3)(B) of the Code and (v) none of
its direct or indirect partners/members is a controlled foreign corporation
related to the Company as described in Section 881(c)(3)(C) of the Code.

The undersigned has furnished its participating Bank with IRS Form W-8IMY
accompanied by one of the following forms from each of its partners/members that
is claiming the portfolio interest exemption: (i) an IRS Form W-8BEN or (ii) an
IRS Form W-8IMY accompanied by an IRS Form W-8BEN from each of such
partner’s/member’s beneficial owners that is claiming the portfolio interest
exemption. By executing this certificate, the undersigned agrees that (1) if the
information provided on this certificate changes, the undersigned shall promptly
so inform such Bank and (2) the undersigned shall have at all times furnished
such Bank with a properly completed and currently effective certificate in
either the calendar year in which each payment is to be made to the undersigned,
or in either of the two calendar years preceding such payments.

 

[NAME OF PARTICIPANT] By:                                      
                                            Name:
                                                                    Title:
                                                                   

Date:                                     
                                , 20[    ]

--------------------------------------------------------------------------------

EXHIBIT J-4

[FORM OF]

U.S. TAX COMPLIANCE CERTIFICATE

(For Foreign Lenders That Are Partnerships For U.S. Federal Income Tax Purposes)

Reference is made to the Credit Agreement dated as of April 28, 2017, (as
extended, renewed, amended or restated from time to time, the “Credit
Agreement”) among Sanderson Farms, Inc., the Banks and L/C Issuer party thereto,
and BMO Harris Bank N.A., as administrative agent (the “Administrative Agent”).
Terms defined in the Credit Agreement are used herein with the same meaning.

Pursuant to the provisions of Section 11.21 of the Credit Agreement, the
undersigned hereby certifies that (i) it is the sole record owner of the Loan(s)
(as well as any Note(s) evidencing such Loan(s)) in respect of which it is
providing this certificate, (ii) its direct or indirect partners/members are the
sole beneficial owners of such Loan(s) (as well as any Note(s) evidencing such
Loan(s)), (iii) with respect to the extension of credit pursuant to this Credit
Agreement or any other Loan Document, neither the undersigned nor any of its
direct or indirect partners/members is a bank extending credit pursuant to a
loan agreement entered into in the ordinary course of its trade or business
within the meaning of Section 881(c)(3)(A) of the Code, (iv) none of its direct
or indirect partners/members is a ten percent shareholder of the Company within
the meaning of Section 871(h)(3)(B) of the Code and (v) none of its direct or
indirect partners/members is a controlled foreign corporation related to the
Company as described in Section 881(c)(3)(C) of the Code.

The undersigned has furnished the Administrative Agent and the Company with IRS
Form W-8IMY accompanied by one of the following forms from each of its
partners/members that is claiming the portfolio interest exemption: (i) an IRS
Form W-8BEN or (ii) an IRS Form W-8IMY accompanied by an IRS Form W-8BEN from
each of such partner’s/member’s beneficial owners that is claiming the portfolio
interest exemption. By executing this certificate, the undersigned agrees that
(1) if the information provided on this certificate changes, the undersigned
shall promptly so inform the Company and the Administrative Agent, and (2) the
undersigned shall have at all times furnished the Company and the Administrative
Agent with a properly completed and currently effective certificate in either
the calendar year in which each payment is to be made to the undersigned, or in
either of the two calendar years preceding such payments.

 

[NAME OF LENDER] By:                                      
                                            Name:
                                                                    Title:
                                                                   

Date:                                    
                              , 20[    ]

--------------------------------------------------------------------------------

EXHIBIT K

COMMITMENT AMOUNT INCREASE REQUEST

            ,         

 

To: BMO Harris Bank N.A. as Agent for the Banks parties to the Credit Agreement
dated as of April 28, 2017 (as extended, renewed, amended or restated from time
to time, the “Credit Agreement”), among Sanderson Farms, Inc., certain Banks
which are signatories thereto, and BMO Harris Bank N.A., as Agent

Ladies and Gentlemen:

The undersigned, Sanderson Farms, Inc. (the “Company”) hereby refers to the
Credit Agreement and requests that the Agent consent to (a) an increase in the
aggregate Revolving Credit Commitments (the “Commitment Amount Increase”), in
accordance with Section 1.1(c) of the Credit Agreement, to be effected by [an
increase in the Revolving Credit Commitment of [name of existing Bank] [the
addition of [name of new Bank] (the “New Bank”) as a Bank under the terms of the
Credit Agreement], or (b) the making of Term Loans by [name of existing Bank]
[the addition of [name of new Bank] (the “New Bank”) as a Bank under the terms
of the Credit Agreement]. Capitalized terms used herein without definition shall
have the same meanings herein as such terms have in the Credit Agreement.

After giving effect to such [Commitment Amount Increase] [Term Loan], the
[Revolving Credit Commitment] [Term Loan] of the [Bank] [New Bank] shall be
$        .

[Include paragraphs 1-4 for a New Bank]

1.    The New Bank hereby confirms that it has received a copy of the Loan
Documents and the exhibits related thereto, together with copies of the
documents which were required to be delivered under the Credit Agreement as a
condition to the making of the Loans and other extensions of credit thereunder.
The New Bank acknowledges and agrees that it has made and will continue to make,
independently and without reliance upon the Agent or any other Lender and based
on such documents and information as it has deemed appropriate, its own credit
analysis and decisions relating to the Credit Agreement. The New Bank further
acknowledges and agrees that the Agent has not made any representations or
warranties about the credit worthiness of the Company or any other party to the
Credit Agreement or any other Loan Document or with respect to the legality,
validity, sufficiency or enforceability of the Credit Agreement or any other
Loan Document or the value of any security therefor.

--------------------------------------------------------------------------------

2.    Except as otherwise provided in the Credit Agreement, effective as of the
date of acceptance hereof by the Administrative Agent, the New Bank (i) shall be
deemed automatically to have become a party to the Credit Agreement and have all
the rights and obligations of a “Bank” under the Credit Agreement as if it were
an original signatory thereto and (ii) agrees to be bound by the terms and
conditions set forth in the Credit Agreement as if it were an original signatory
thereto.

3.    The New Bank shall deliver to the Agent an Administrative Questionnaire.

[4.    The New Bank has delivered, if appropriate, to the Company and the Agent
(or is delivering to the Company and the Agent concurrently herewith) the tax
forms referred to in Section 11.21 of the Credit Agreement.]*

THIS AGREEMENT SHALL BE DEEMED TO BE A CONTRACTUAL OBLIGATION UNDER, AND SHALL
BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
ILLINOIS.

The Commitment Amount Increase shall be effective when the executed consent of
the Agent is received or otherwise in accordance with Section 1.1(c) of the
Credit Agreement, but not in any case prior to             ,         . It shall
be a condition to the effectiveness of the Commitment Amount Increase that all
expenses referred to in Section 1.1(c) of the Credit Agreement shall have been
paid.

The Company hereby certifies that no Potential Default or Event of Default has
occurred and is continuing.

 

 

* Insert bracketed paragraph if New Bank is organized under the law of a
jurisdiction other than the United States of America or a state thereof.

 

-2-

--------------------------------------------------------------------------------

Please indicate the Agent’s consent to such Commitment Amount Increase by
signing the enclosed copy of this letter in the space provided below.

 

Very truly yours, SANDERSON FARMS, INC. By  

 

  Name:  

 

  Title:  

 

[NEW OR EXISTING BANK INCREASING

    COMMITMENTS OR MAKING A TERM LOAN]

By  

 

  Name  

 

  Title  

                                                                       

 

The undersigned hereby consents on this      day of             ,          to
the above-requested Commitment Amount Increase. BMO HARRIS BANK N.A., as Agent
By  

 

  Name  

 

  Title  

                                                                   

 

-3-

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EXHIBIT L

SANDERSON FARMS, INC.

TERM NOTE

            , 20    

FOR VALUE RECEIVED, the undersigned, SANDERSON FARMS, INC., a Mississippi
corporation (the “Company”) promises to pay to the order of                     
(the “Lender”) on                      (the “Maturity Date}) at the principal
office of BMO Harris Bank N.A. in Chicago, Illinois, the principal sum of
                     or, if less, the aggregate unpaid principal amount of the
Term Loan made by the Lender to the Company under the Credit Agreement
hereinafter mentioned and remaining unpaid on the Maturity Date, together with
interest on the principal amount of each Term Loan from time to time outstanding
hereunder at the rates, and payable in the manner and on the dates, specified in
said Credit Agreement.

The Lender shall record on its books or records or on the schedule to this Note
which is a part hereof the principal amount of the Term Loan made under the
Credit Agreement, all payments of principal and interest and the principal
balances from time to time outstanding; provided that prior to the transfer of
this Note all such amounts shall be recorded on the schedule attached to this
Note. The record thereof, whether shown on such books or records or on the
schedule to this Note, shall be prima facie evidence as to all such amounts;
provided, however, that the failure of the Lender to record, or any mistake in
recording, any of the foregoing shall not limit or otherwise affect the
obligation of the Company to repay the Term Loan made under the Credit
Agreement, together with accrued interest thereon.

This Note is one of the Term Notes referred to in and issued under that certain
Credit Agreement dated as of April 28, 2017, among the Company, BMO Harris Bank
N.A., as Agent, and the banks named therein, as amended from time to time (the
“Credit Agreement”), and this Note and the holder hereof are entitled to all of
the benefits and security provided for thereby or referred to therein. Payment
of this Note has been guaranteed pursuant to that certain Guaranty Agreement
dated as of April 28, 2017, from the Guarantor Subsidiaries to the Banks, to
which reference is hereby made for a statement of the terms thereof. All defined
terms used in this Note, except terms otherwise defined herein, shall have the
same meaning as such terms have in said Credit Agreement.

Prepayments may be made on The Term Loan evidenced hereby and this Note (and the
Term Loan evidenced hereby) may be declared due prior to the expressed maturity
thereof, all in the events, on the terms and in the manner as provided for in
said Credit Agreement.

The Company hereby waives presentment for payment and demand.

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This Note is governed by and shall be construed in accordance with the internal
laws of the State of Illinois.

 

SANDERSON FARMS, INC. By                                        
                                           Its                               
                                           

 

-2-

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SCHEDULE 1

COMMITMENTS

 

NAME OF LENDER    COMMITMENT  

BMO Harris Financing, Inc.

   $ 80,000,000  

AgFirst Farm Credit Bank

   $ 72,500,000  

Farm Credit Bank of Texas

   $ 72,500,000  

Farm Credit Services of America, PCA

   $ 72,500,000  

Regions Bank

   $ 72,500,000  

Bank of the West

   $ 60,000,000  

1st Farm Credit Services, PCA

   $ 31,250,000  

AgStar Financial Services, PCA

   $ 41,250,000  

Farm Credit Mid-America, PCA

   $ 60,000,000  

United FCS, PCA, d/b/a FCS Commercial Finance Group

   $ 72,500,000  

Northwest Farm Credit Services, PCA

   $ 72,500,000  

GreenStone Farm Credit Services, ACA

   $ 60,000,000  

U.S. Bank National Association

   $ 35,000,000  

Trustmark National Bank

   $ 37,500,000  

American AgCredit, PCA

   $ 25,000,000  

Farm Credit West, PCA

   $ 20,000,000  

BankPlus

   $ 15,000,000  

TOTAL

   $ 900,000,000