Exhibit 10.1

 

 

 

CREDIT AGREEMENT

among

SANDERSON FARMS, INC.

and

BMO HARRIS BANK N.A.,

as Agent

AGFIRST FARM CREDIT BANK,

COMPEER FINANCIAL, PCA,

FARM CREDIT BANK OF TEXAS,

FARM CREDIT SERVICES OF AMERICA, PCA,

REGIONS BANK,

as Co-Documentation Agents

AGCOUNTRY FARM CREDIT SERVICES, PCA,

BANK OF THE WEST,

FARM CREDIT MID-AMERICA, PCA,

GREENSTONE FARM CREDIT SERVICES, ACA,

NORTHWEST FARM CREDIT SERVICES, PCA,

as Co-Syndication Agents

and

THE FROM TIME TO TIME BANKS PARTIES HERETO

March 21, 2019

 

 

 

BMO CAPITAL MARKETS, AGFIRST FARM CREDIT BANK, COMPEER FINANCIAL, 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 CREDIT

     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

     6  

(a)

  

Domestic Rate

     6  

(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

     11  

Section 1.8.

  

Participation in L/Cs

     11  

Section 1.9.

  

Substitution of Lenders

     12  

Section 1.10.

  

Defaulting Lenders

     12  

Section 1.11.

  

Cash Collateral for Fronting Exposure

     15   SECTION 2.   

FEES, PREPAYMENTS AND TERMINATIONS

     15  

Section 2.1.

  

Commitment Fee

     15  

Section 2.2.

  

Agent’s Fee

     16  

Section 2.3.

  

Optional Prepayments

     16  

Section 2.4.

  

Mandatory Prepayments

     16  

Section 2.5.

  

Terminations

     17   SECTION 3.   

PLACE AND APPLICATION OF PAYMENTS

     17   SECTION 4.   

DEFINITIONS

     17   SECTION 5.   

REPRESENTATIONS AND WARRANTIES

     33  

Section 5.1.

  

Organization and Qualification

     33  

Section 5.2.

  

Financial Reports

     34  

Section 5.3.

  

Litigation; Tax Returns; Approvals

     34  

Section 5.4.

  

Regulation U

     34  

Section 5.5.

  

No Default

     35  

Section 5.6.

  

ERISA

     35  

Section 5.7.

  

Compliance with Laws

     35  

Section 5.8.

  

Security Interests and Indebtedness

     35  

Section 5.9.

  

Subsidiaries

     35  

 

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Section 5.10.

  

Accurate Information

     35  

Section 5.11.

  

Enforceability

     35  

Section 5.12.

  

Sanctions; Anti-Money Laundering Laws and Anti-Corruption Laws

     36  

Section 5.13.

  

OFAC

     36  

Section 5.14.

  

Trademarks, Franchises, and Licenses

     36  

Section 5.15.

  

Governmental Authority and Licensing

     36  

Section 5.16.

  

Good Title

     37  

Section 5.17.

  

Affiliate Transactions

     37  

Section 5.18.

  

Investment Company

     37  

Section 5.19.

  

Other Agreements

     37  

Section 5.20.

  

Solvency

     37  

Section 5.21.

  

No Broker Fees.

     37  

Section 5.22.

  

EEA Financial Institution.

     37   SECTION 6.   

CONDITIONS PRECEDENT

     37  

Section 6.1.

  

General

     38  

Section 6.2.

  

Initial Extension of Credit

     38  

Section 6.3.

  

Each Extension of Credit

     39  

Section 6.4.

  

Legal Matters

     40  

Section 6.5.

  

Closing Fee

     40   SECTION 7.   

COVENANTS

     40  

Section 7.1.

  

Maintenance of Property

     40  

Section 7.2.

  

Taxes

     40  

Section 7.3.

  

Maintenance of Insurance

     40  

Section 7.4.

  

Financial Reports

     41  

Section 7.5.

  

Inspection

     42  

Section 7.6.

  

Consolidation and Merger

     42  

Section 7.7.

  

Transactions with Affiliates

     42  

Section 7.8.

  

Material Subsidiaries

     42  

Section 7.9.

  

Consolidated Tangible Net Worth

     42  

Section 7.10.

  

Consolidated Indebtedness for Borrowed Money to Total Capitalization

     43  

Section 7.11.

  

Compliance with Anti-Corruption Laws, Anti-Money Laundering Laws and Sanctions

     43  

Section 7.12.

  

Compliance with OFAC Sanctions Programs

     43  

Section 7.13.

  

Liens

     44  

Section 7.14.

  

Investments, Loans, Advances and Acquisitions

     45  

Section 7.15.

  

Sale of Tangible Fixed Assets

     47  

Section 7.16.

  

Notice of Suit or Adverse Change in Business or Default

     47  

Section 7.17.

  

ERISA

     47  

Section 7.18.

  

Use of Proceeds

     47  

Section 7.19.

  

Compliance with Laws, etc.

     48  

Section 7.20.

  

Environmental Covenant

     48  

 

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Section 7.21.

  

No Changes in Fiscal Year

     48  

Section 7.22.

  

Change in the Nature of Business

     48  

Section 7.23.

  

No Restrictions

     48  

Section 7.24.

  

Maintenance of Subsidiaries

     48   SECTION 8.   

EVENTS OF DEFAULT AND REMEDIES

     49  

Section 8.1.

  

Definitions

     49  

Section 8.2.

  

Remedies for Non-Bankruptcy Defaults

     50  

Section 8.3.

  

Remedies for Bankruptcy Defaults

     51   SECTION 9.   

CHANGE IN CIRCUMSTANCES REGARDING EURODOLLAR LOANS

     51  

Section 9.1.

  

Change of Law

     51  

Section 9.2.

  

Unavailability of Deposits or Inability to Ascertain the Adjusted Eurodollar
Rate

     51  

Section 9.3.

  

Taxes, Increased Costs and Reduced Return

     52  

Section 9.4.

  

Funding Indemnity

     54  

Section 9.5.

  

Lending Branch

     55  

Section 9.6.

  

Discretion of Bank as to Manner of Funding

     55   SECTION 10.   

THE AGENT

     55  

Section 10.1.

  

Appointment and Authorization of Agent

     55  

Section 10.2.

  

Agent and its Affiliates

     55  

Section 10.3.

  

Action by Agent

     56  

Section 10.4.

  

Consultation with Experts

     56  

Section 10.5.

  

Liability of Agent; Credit Decision

     56  

Section 10.6.

  

Indemnity

     57  

Section 10.7.

  

Resignation of Agent and Successor Agent

     57  

Section 10.8.

  

L/C Issuer and Swing Line Bank

     58  

Section 10.9.

  

Designation of Additional Agents

     58  

Section 10.10.

  

Authorization of Agent to File Proofs of Claim

     58  

Section 10.11.

  

Certain ERISA Matters

     59   SECTION 11.   

MISCELLANEOUS

     60  

Section 11.1.

  

Amendments and Waivers

     60  

Section 11.2.

  

Waiver of Rights

     61  

Section 11.3.

  

Several Obligations

     61  

Section 11.4.

  

Non-Business Day

     61  

Section 11.5.

  

Survival of Indemnities

     61  

Section 11.6.

  

Documentary Taxes

     62  

Section 11.7.

  

Representations

     62  

Section 11.8.

  

Notices

     62  

Section 11.9.

  

Costs and Expenses; Environmental Indemnity; Indemnity

     62  

Section 11.10.

  

Counterparts

     63  

 

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Section 11.11.

  

Successors and Assigns; Governing Law; Entire Agreement

     63  

Section 11.12.

  

No Joint Venture

     64  

Section 11.13.

  

Severability

     64  

Section 11.14.

  

Table of Contents and Headings

     64  

Section 11.15.

  

Sharing of Payments

     64  

Section 11.16.

  

Participants

     64  

Section 11.17.

  

Assignments

     65  

Section 11.18.

  

Confidentiality

     68  

Section 11.19.

  

Waiver of Jury Trial

     68  

Section 11.20.

  

USA Patriot Act

     68  

Section 11.21.

  

Taxes

     68  

Section 11.22.

  

Waiver of Borrower’s Rights

     73  

Section 11.23.

  

Acknowledgement and Consent to Bail-In of EEA Financial Institutions

     74  

 

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 March 21, 2019, 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 CREDIT.

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
March 21, 2024 (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 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 $1,300,000,000 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 $1,300,000,000 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 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 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 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

 

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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.

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

 

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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.

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, or (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

 

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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 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.

 

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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, 2019, and at
maturity (whether by acceleration, upon prepayment or otherwise).

(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, or (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

 

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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 financial officer, or the controller 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 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

 

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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 L/C (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 L/Cs as to form and
substance, shall be in U.S. Dollars and shall be an L/C which the L/C Issuer may
lawfully issue. The L/Cs shall consist of standby and commercial L/Cs in an
aggregate face amount not to exceed $30,000,000. Each L/C shall have an expiry
date not later than the earlier of one year from the date of issuance thereof or
thirty (30) days prior to the Revolving Credit Termination Date, provided that
annually renewable L/Cs may be issued with a final expiry date no later than
thirty (30) days prior to the Revolving Credit Termination Date. 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, 2019, 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 L/C 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 documentary and processing
charges for L/Cs 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 L/Cs (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 an LC 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

 

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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 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 (A) the expiration date of such
L/C if so extended would be after the Revolving Credit Termination Date, (B) the
Revolving Credit Commitments have been terminated, (C) an Event of Default or
Potential Default has occurred and is continuing, or (D) 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 L/C 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 an 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

 

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an 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 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
Company 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

 

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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 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.

 

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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 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

 

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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 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 Company 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

 

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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 (A) 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 (B) such reallocation does not cause the aggregate Revolving
Loans and interests in L/C Obligations and Swing Loans of any 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

 

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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 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

 

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payable quarterly in arrears on the last day of each calendar quarter
(commencing on June 30, 2019), 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 February 19, 2019, 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.

(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

 

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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 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.

 

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“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.

“Anti-Corruption Laws” means all laws, rules, and regulations of any
jurisdiction applicable to the Company, any Guarantor Subsidiary, or any of
their respective Subsidiaries from time to time concerning or relating to
bribery or corruption.

“Anti-Money Laundering Laws” means any and all laws, statutes, regulations or
obligatory government orders, decrees, ordinances or rules applicable to the
Company, any Guarantor Subsidiary, or any of their respective Subsidiaries
related to terrorism financing or money laundering, including any applicable
provision of the Patriot Act.

“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%    ³ 25% and <35%    ³ 35% and <45%    ³ 45%

Eurodollar Loans and L/C Participation Fee

   1.25%    1.50%    1.75%    2.25%

Domestic Rate Loans

   0.25%    0.50%    0.75%    1.25%

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, 2019), 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

 

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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.

“Bail-In Action” means the exercise of any Write-Down and Conversion Powers by
the applicable EEA Resolution Authority in respect of any liability of an EEA
Financial Institution.

“Bail-In Legislation” means, with respect to any EEA Member Country implementing
Article 55 of Directive 2014/59/EU of the European Parliament and of the Council
of the European Union, the implementing law for such EEA Member Country from
time to time which is described in the EU Bail-In Legislation Schedule.

“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.

“Beneficial Ownership Certification” means a certification regarding beneficial
ownership as required by the Beneficial Ownership Regulation.

“Beneficial Ownership Regulation” means 31 C.F.R. § 1010.230.

“Benefit Plan” means any of (a) an “employee benefit plan” (as defined in ERISA)
that is subject to Title I of ERISA, (b) a “plan” as defined in
Section 4975(e)(1) of the Code, or (c) any Person whose assets include (for
purposes of ERISA Section 3(42) or otherwise for purposes of Title I of ERISA or
Section 4975 of the Code) the assets of any such “employee benefit plan” or
“plan,” as applicable.

“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 the date of this Agreement (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.

“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.

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

 

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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.

“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.

“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.

“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 that such failure is the result of
such Bank’s determination that one or more conditions precedent

 

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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, (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, or (iii) become the subject of a Bail-in Action;
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.

“Designated Jurisdiction” means, at any time, any country, region or territory
which is itself the subject or target of any Sanctions.

“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

 

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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%,
or (c) the LIBOR Quoted Rate for such day plus 1.00%. As used herein, the term
“LIBOR Quoted Rate” means, for any day, the 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).

“EEA Financial Institution” means (a) any credit institution or investment firm
established in any EEA Member Country which is subject to the supervision of an
EEA Resolution Authority, (b) any entity established in an EEA Member Country
which is a parent of an institution described in clause (a) of this definition,
or (c) any financial institution established in an EEA Member Country which is a
subsidiary of an institution described in clauses (a) or (b) of this definition
and is subject to consolidated supervision with its parent.

“EEA Member Country” means any of the member states of the European Union,
Iceland, Liechtenstein, and Norway.

“EEA Resolution Authority” means any public administrative authority or any
Person entrusted with public administrative authority of any EEA Member Country
(including any delegee) having responsibility for the resolution of any EEA
Financial Institution.

“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 or
Defaulting Lender) 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” means all applicable federal, state and local
environmental, health and safety statutes and regulations.

 

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“ERISA” means the Employee Retirement Income Security Act of 1974, as amended,
and the rules and regulations promulgated thereunder.

“ERISA Affiliate” means any trade or business (whether or not incorporated)
under common control with the Company within the meaning of Section 414(b) or
(c) of the Code (and Sections 414(m) and (o) of the Code for purposes of
provisions relating to Section 412 of the Code).

“ERISA Event” means (a) a Reportable Event with respect to a Pension Plan;
(b) the withdrawal of the Company or any ERISA Affiliate from a Pension Plan
subject to Section 4063 of ERISA during a plan year in which such entity was a
“substantial employer” as defined in Section 4001(a)(2) of ERISA or a cessation
of operations that is treated as such a withdrawal under Section 4062(e) of
ERISA; (c) a complete or partial withdrawal by the Company or any ERISA
Affiliate from a Multiemployer Plan or notification that a Multiemployer Plan is
in reorganization; (d) the filing of a notice of intent to terminate under, or
the treatment of a Pension Plan amendment as a termination under, Section 4041
or 4041A of ERISA; (e) the institution by the PBGC of proceedings to terminate a
Pension Plan; (f) any event or condition which constitutes grounds under
Section 4042 of ERISA for the termination of, or the appointment of a trustee to
administer, any Pension Plan; (g) the determination that any Pension Plan is
considered an at-risk plan or a plan in endangered or critical status within the
meaning of Sections 430, 431 and 432 of the Code or Sections 303, 304 and 305 of
ERISA; or (h) the imposition of any liability under Title IV of ERISA, other
than for PBGC premiums due but not delinquent under Section 4007 of ERISA, upon
the Company or any ERISA Affiliate.

“EU Bail-In Legislation Schedule” means the EU Bail-In Legislation Schedule
published by the Loan Market Association (or any successor Person), as in effect
from time to time.

“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, or (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%.

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

 

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“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 28, 2017,
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
(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.

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

 

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“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.

“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

 

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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 leases that are not
Capitalized Leases and 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 thereafter as selected by the Company in
its notice as provided herein, and (b) with respect to any

 

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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.

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

 

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

“Multiemployer Plan” means any employee benefit plan of the type described in
Section 4001(a)(3) of ERISA, to which the Company or any ERISA Affiliate makes
or is obligated to make contributions, or during the preceding five (5) plan
years, has made or been obligated to make contributions.

“Multiple Employer Plan” means a Plan which has two or more contributing
sponsors (including the Company or any ERISA Affiliate) and at least two of them
are not under common Control, as such a Plan is described in Section 4064 of
ERISA.

 

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“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.

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

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

“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).

“Pension Plan” means any employee pension benefit plan (including a Multiple
Employer Plan or a Multiemployer Plan) that is maintained or is contributed to
by the Company or any ERISA Affiliate and is either covered by Title IV of ERISA
or is subject to the minimum funding standards under Section 412 of the Code.

“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” means any employee benefit plan within the meaning of Section 3(3) of
ERISA (including a Pension Plan), maintained for employees of the Company or any
ERISA Affiliate or

 

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any such Plan to which the Company or any ERISA Affiliate is required to
contribute on behalf of any of its employees.

“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.

“PTE” means a prohibited transaction class exemption issued by the U.S.
Department of Labor, as any such exemption may be amended from time to time.

“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.

“Reportable Event” means any of the events set forth in Section 4043(c) of
ERISA, other than events for which the thirty (30) day notice period has been
waived.

“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.

 

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“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 $1,000,000,000 on the date hereof.

“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.

“Sanctioned Person” means, at any time, (a) any Person listed in any
Sanctions-related list of designated Persons maintained by OFAC (including the
OFAC SDN List), the United States Department of State, the United Nations
Security Council, the European Union, any European Union member state, Her
Majesty’s Treasury of the United Kingdom, or any other relevant sanctions
authority, (b) any Person located, organized or resident in a Designated
Jurisdiction or (c) any Person owned or Controlled by any such Person or Persons
described in clauses (a) or (b) above.

“Sanctions” means all economic or financial sanctions, sectoral sanctions,
secondary sanctions or trade embargoes imposed, administered or enforced from
time to time by (a) the United States government (including those administered
by OFAC or the United States Department of State) or (b) the United Nations
Security Council, the European Union, any European Union member state, Her
Majesty’s Treasury of the United Kingdom, or any other relevant sanctions
authority with jurisdiction over the Company, any Guarantor Subsidiary or any of
their respective Subsidiaries or Affiliates.

“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.

 

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“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.

“Write-Down and Conversion Powers” means, with respect to any EEA Resolution
Authority, the write-down and conversion powers of such EEA Resolution Authority
from time to time under the Bail-In Legislation for the applicable EEA Member
Country, which write-down and conversion powers are described in the EU Bail-In
Legislation Schedule.

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

 

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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, 2018, 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, 2019.
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, 2019, 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 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

 

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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 or ERISA Affiliate, sponsors, maintains or participates in any
Pension Plan. No ERISA Event has occurred or is reasonably expected to occur
except as could not reasonably be expected to have a Material Adverse Effect.

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 Securities Exchange Act of 1934, as amended, and
filed after January 31, 2019 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

 

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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. Sanctions; Anti-Money Laundering Laws and Anti-Corruption Laws.
(a) None of the Company, any of its Subsidiaries, any director, officer or
employee of the Company or any of its Subsidiaries, nor, to the knowledge of the
Company, any agent or representative of the Company or any of its Subsidiaries,
is a Sanctioned Person or currently the subject or target of any Sanctions,
where any such status, individually or in the aggregate, could reasonably be
expected to have a Material Adverse Effect.

(b) The Company, each of its Subsidiaries, each of the Company’s and each of its
Subsidiaries’ respective directors, officers and employees, and, to the
knowledge of the Company, each of the Company’s and its Subsidiaries’ respective
agents and representatives, is in compliance with all applicable Anti-Corruption
Laws, Anti-Money Laundering Laws and Sanctions, where any such non-compliance,
individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect.

Section 5.13. 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 5.14. 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 5.15. 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

 

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reasonably be expected to have a Material Adverse Effect, is pending or, to the
knowledge of the Company, threatened.

Section 5.16. 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).

Section 5.17. 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 5.18. 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 5.19. 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 5.20. 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 5.21. 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 5.22. EEA Financial Institution. Neither the Company nor any Guarantor
Subsidiary is an EEA Financial Institution.

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:

 

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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;

(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 Secretary or Treasurer of the Company and each
Guarantor Subsidiary, respectively;

(h) copies, certified by the Secretary or 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) (A) 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, 2019, October 31, 2020, October 31, 2021, October 31,
2022, and October 31, 2023, and (B) 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;

 

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(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,
2019.

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

 

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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.

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

 

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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 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;

(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 controller 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

 

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(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.

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 $950,000,000
increasing on the last

 

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day of each fiscal quarter (commencing with the fiscal quarter ending April 30,
2019) 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 a
greenfield poultry processing complex at a location to be determined by the
Company but within the United States (such poultry processing complex is
referred to as the “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. Compliance with Anti-Corruption Laws, Anti-Money Laundering Laws
and Sanctions. (a) The Company shall at all times comply with the requirements
of all Anti-Corruption Laws, Anti-Money Laundering Laws and Sanctions applicable
to the Company and shall cause each Guarantor Subsidiary and each of its and
their respective Subsidiaries to comply with the requirements of all
Anti-Corruption Laws, Anti-Money Laundering Laws and Sanctions applicable to
such Persons, except where the failure to comply would not have a Material
Adverse Effect.

(b) The Company shall provide the Agent and the Banks any information regarding
the Company, each Guarantor Subsidiary, and each of their respective Affiliates
and Subsidiaries necessary for the Agent and each Bank to comply with all
applicable Anti-Corruption Laws, Anti-Money Laundering Laws and Sanctions,
subject however, in the case of Affiliates, to the Company’s ability to provide
information applicable to them.

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;

(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;

 

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(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 any Property 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 $50,000,000 at any one time;

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

(j) liens for purchase money security interests incurred in the ordinary course
of business.

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 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

 

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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;

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

(k) other investments, loans and advances in addition to those otherwise
permitted by this Section in an amount not to exceed $25,000,000 in the
aggregate at any one time outstanding.

 

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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 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 and ERISA
Affiliate 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 the occurrence of any ERISA Event.
The Company will not, and will not permit any Subsidiary or ERISA Affiliate to,
terminate any such Pension 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 the 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, to support the issuance

 

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of letters of credit in the ordinary course of business, and to fund certain
fees and expenses associated with this Agreement.

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
Sections 7.5, 7.6, 7.8, 7.9, 7.10, 7.11, 7.12, 7.13, 7.14, 7.15, 7.16, 7.18, and
7.19 hereof;

(c) 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;

(d) 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;

(e) 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;

(f) 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;

(g) 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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(h) Any ERISA Event that could reasonably be expected to have a Material Adverse
Effect;

(i) 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(j) hereof;

(j) 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(i)(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;

(k) a Change of Control shall occur; or

(l) 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 (i) and (j) of
Section 8.1 hereof, has occurred 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, (c) require that the Company Cash Collateralize outstanding
L/C Obligations, and (d) 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

 

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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 (i) or (j) of Section 8.1 hereof has occurred and is
continuing, then the Notes and all Reimbursement Obligations and the Company’s
obligations to Cash Collateralize the L/C Obligations as provided in
Section 8.2(c) 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”).

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 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

 

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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 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 receipt 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.

If at any time the Agent determines (which determination shall be conclusive
absent manifest error) that (i) the circumstances set forth in clause (a) above
have arisen and such circumstances are unlikely to be temporary, (ii) LIBOR is
no longer a widely recognized benchmark rate for newly originated loans in
United States dollars in the U.S. market, or (iii) the circumstances set forth
in clause (a) have not arisen but the supervisor for the administrator of the
LIBOR Index Rate or a Governmental Authority having jurisdiction over the Agent
has made a public statement identifying a specific date after which the LIBOR
Index Rate shall no longer be used for determining interest rates for loans,
then the Agent and the Company shall endeavor to establish an alternate rate of
interest to LIBOR that gives due consideration to the then prevailing market
convention for determining a rate of interest for syndicated loans in the United
States at such time, and shall enter into an amendment to this Agreement to
reflect such alternate rate of interest and such other related changes to this
Agreement as may be applicable. Notwithstanding anything to the contrary in
Section 11.1, such amendment shall become effective without any further action
or consent of any other party to this Agreement so long as the Agent shall not
have received, within five (5) Business Days of the date notice of such
alternate rate of interest is provided to the Banks, a written notice from the
Required Banks stating that such Required Banks object to such amendment. Until
an alternate rate of interest shall be determined in accordance with this
section, (x) any borrowing request that requests the conversion of any borrowing
to, or continuation of any borrowing as, Eurodollar Loans shall be ineffective,
and (y) any borrowing request that requests a borrowing of Eurodollar Loans,
shall be made as a borrowing of Domestic Rate Loans or at the Adjusted CD Rate;
provided that, if such alternate rate of interest shall be less than zero, such
rate shall be deemed to be zero for the purposes of this Agreement.

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 and all requests, rules,

 

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guidelines or directives promulgated by the Bank for International Settlements,
the Basel Committee on Banking Supervision (or any successor or similar
authority) or the United States or foreign regulatory authorities, in each case
pursuant to Basel III (“Basel III”) are 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;

(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 and Basel III are 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,

 

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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 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

 

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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 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

 

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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 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

 

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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 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

 

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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 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 10.10. Authorization of Agent to File Proofs of Claim. In case of the
pendency of any proceeding under any Debtor Relief Law or any other judicial
proceeding relative to the Company or any Guarantor Subsidiary, the Agent
(irrespective of whether the principal of any Loan or L/C Obligation shall then
be due and payable as herein expressed or by declaration or otherwise and
irrespective of whether the Agent shall have made any demand on the Company)
shall be entitled and empowered, by intervention in such proceeding or
otherwise:

(a) to file and prove a claim for the whole amount of the principal and interest
owing and unpaid in respect of the Loans, L/C Obligations and all other
indebtedness, obligations and liabilities under the Loan Documents that are
owing and unpaid and to file such other documents as may be necessary or
advisable in order to have the claims of Banks, the L/C Issuer and the Agent
(including any claim for the reasonable compensation, expenses, disbursements
and advances of the Banks, the L/C Issuer and the Agent and their respective
agents and counsel and all other amounts due the Banks, the L/C Issuer and the
Agent under the Loan Documents including, but not limited to, Section 11.9)
allowed in such judicial proceeding; and

 

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(b) to collect and receive any monies or other property payable or deliverable
on any such claims and to distribute the same;

and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Bank and L/C Issuer to make such payments to the Agent and, in the event
that the Agent shall consent to the making of such payments directly to the
Banks and the L/C Issuer, to pay to the Agent any amount due for the reasonable
compensation, expenses, disbursements and advances of the Agent and its agents
and counsel, and any other amounts due the Agent under Section 11.9. Nothing
contained herein shall be deemed to authorize the Agent to authorize or consent
to or accept or adopt on behalf of any Bank or L/C Issuer any plan of
reorganization, arrangement, adjustment or composition affecting the obligations
or the rights of any Bank or L/C Issuer under the Loan Documents or to authorize
the Agent to vote in respect of the claim of any Bank or L/C Issuer in any such
proceeding.

Section 10.11. Certain ERISA Matters. (a) Each Bank (x) represents and warrants,
as of the date such Person became a Bank party hereto, to, and (y) covenants,
from the date such Person became a Bank party hereto to the date such Person
ceases being a Bank party hereto, for the benefit of the Agent and its
Affiliates, and not, for the avoidance of doubt, to or for the benefit of the
Company or any Guarantor Subsidiary, that at least one of the following is and
will be true:

(i) such Bank is not using “plan assets” (within the meaning of Section 3(42) of
ERISA or otherwise) of one or more Benefit Plans with respect to such Bank’s
entrance into, participation in, administration of and performance of the Loans,
the L/Cs, the Commitments or this Agreement,

(ii) the transaction exemption set forth in one or more PTEs, such as PTE 84-14
(a class exemption for certain transactions determined by independent qualified
professional asset managers), PTE 95-60 (a class exemption for certain
transactions involving insurance company general accounts), PTE 90-1 (a class
exemption for certain transactions involving insurance company pooled separate
accounts), PTE 91-38 (a class exemption for certain transactions involving bank
collective investment funds) or PTE 96-23 (a class exemption for certain
transactions determined by in-house asset managers), is applicable with respect
to such Bank’s entrance into, participation in, administration of and
performance of the Loans, the L/Cs, the Commitments and this Agreement,

(iii) (A) such Bank is an investment fund managed by a “Qualified Professional
Asset Manager” (within the meaning of Part VI of PTE 84-14), (B) such Qualified
Professional Asset Manager made the investment decision on behalf of such Bank
to enter into, participate in, administer and perform the Loans, the L/Cs, the
Commitments and this Agreement, (C) the entrance into, participation in,
administration of and performance of the Loans, the L/Cs, the Commitments and
this Agreement satisfies the requirements of sub-sections (b) through (g) of
Part I of PTE 84-14 and (D) to the best knowledge of such Bank, the requirements
of subsection (a) of Part I of

 

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PTE 84-14 are satisfied with respect to such Bank’s entrance into, participation
in, administration of and performance of the Loans, the L/Cs, the Commitments
and this Agreement, or

(iv) such other representation, warranty and covenant as may be agreed in
writing between the Agent, in its sole discretion, and such Bank.

(b) In addition, unless either (1) sub-clause (i) in the immediately preceding
clause (a) is true with respect to a Bank or (2) a Bank has provided another
representation, warranty and covenant in accordance with sub-clause (iv) in the
immediately preceding clause (a), such Bank further (x) represents and warrants,
as of the date such Person became a Bank party hereto, to, and (y) covenants,
from the date such Person became a Bank party hereto to the date such Person
ceases being a Bank party hereto, for the benefit of, the Agent, and not, for
the avoidance of doubt, to or for the benefit of, the Company or any Guarantor
Subsidiary, that the Agent is not a fiduciary with respect to the assets of such
Bank involved in such Bank’s entrance into, participation in, administration of
and performance of the Loans, the L/Cs, the Commitments and this Agreement
(including in connection with the reservation or exercise of any rights by the
Agent under this Agreement, any Loan Document or any documents related hereto or
thereto).

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

 

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(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, 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.

 

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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) 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

 

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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.

(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

 

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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.

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
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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 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

 

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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;

(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

 

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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.

(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.

 

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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, (e) with the Company’s consent, and (f) to prospective participants
or assignees in the Loans and participants and assignees in the Loans, provided
that any Persons described in clauses (d) and (f) 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 except with respect to any audit or examination conducted by bank
accountants or any government bank regulatory authority), 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.

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

 

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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 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

 

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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 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-E (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-E (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);

 

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(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 Company 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-E (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-E (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

(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

 

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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.

(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

 

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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 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

 

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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).

Section 11.23. Acknowledgement and Consent to Bail-In of EEA Financial
Institutions. Notwithstanding anything to the contrary in any Loan Document or
in any other agreement, arrangement or understanding among any such parties,
each party hereto (including any party becoming a party hereto by virtue of an
Assignment and Acceptance) acknowledges that any liability of any EEA Financial
Institution arising under any Loan Document, to the extent such liability is
unsecured, may be subject to the write-down and conversion powers of an EEA
Resolution Authority and agrees and consents to, and acknowledges and agrees to
be bound by:

(a) the application of any Write-Down and Conversion Powers by an EEA Resolution
Authority to any such liabilities arising hereunder which may be payable to it
by any party hereto that is an EEA Financial Institution; and

(b) the effects of any Bail-in Action on any such liability, including, if
applicable:

(i) a reduction in full or in part or cancellation of any such liability;

(ii) a conversion of all, or a portion of, such liability into shares or other
instruments of ownership in such EEA Financial Institution, its parent
undertaking, or a bridge institution that may be issued to it or otherwise
conferred on it, and that such shares or other instruments of ownership will be
accepted by it in lieu of any rights with respect to any such liability under
this Agreement or any other Loan Document; or

(iii) the variation of the terms of such liability in connection with the
exercise of the write-down and conversion powers of any EEA Resolution
Authority.

[Signature pages follow]

 

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This 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   Chief Financial
Officer

Accepted and agreed to as of the day and year first above written.

 

BMO HARRIS BANK N.A., as Agent and an L/C Issuer By   /s/ David J. Bechstein  
Its   Director

 

Sanderson Farms, Inc.

Signature Page to Credit Agreement

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

“BANKS” BMO HARRIS FINANCING, INC. By   /s/ David J. Bechstein   Its   Director

 

Sanderson Farms, Inc.

Signature Page to Credit Agreement

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

AGCOUNTRY FARM CREDIT SERVICES, PCA By   /s/ Jamey Grafing   Its   Senior Vice
President

 

Sanderson Farms, Inc.

Signature Page to Credit Agreement

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

AGFIRST FARM CREDIT BANK By   /s/ Matthew Jeffords   Its   Vice President

 

Sanderson Farms, Inc.

Signature Page to Credit Agreement

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

COMPEER FINANCIAL, PCA By   /s/ Lee Fuchs   Its   Director, Capital Markets

 

Sanderson Farms, Inc.

Signature Page to Credit Agreement

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

FARM CREDIT BANK OF TEXAS By   /s/ Ria Estrada   Its   Vice-President

 

Sanderson Farms, Inc.

Signature Page to Credit Agreement

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

FARM CREDIT SERVICES OF AMERICA, PCA By   /s/ Bruce Dean   Its   Vice President

 

Sanderson Farms, Inc.

Signature Page to Credit Agreement

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

NORTHWEST FARM CREDIT SERVICES, PCA By   /s/ Casey Kinzer   Its   Vice President
– Capital Markets

 

Sanderson Farms, Inc.

Signature Page to Credit Agreement

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

REGIONS BANK By   /s/ Cory Guillory   Its   Director

 

Sanderson Farms, Inc.

Signature Page to Credit Agreement

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

BANK OF THE WEST By   /s/ Trevor Svoboda   Its   Director

 

Sanderson Farms, Inc.

Signature Page to Credit Agreement

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

FARM CREDIT MID-AMERICA, PCA By   /s/ Daniel Jordan   Its   Capital Markets
Credit Officer

 

Sanderson Farms, Inc.

Signature Page to Credit Agreement

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

GREENSTONE FARM CREDIT SERVICES, ACA By   /s/ Curtis Flammini   Its   Vice
President of Capital Markets

 

Sanderson Farms, Inc.

Signature Page to Credit Agreement

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

TRUSTMARK NATIONAL BANK By   /s/ William Edwards   Its   Senior Vice President

 

Sanderson Farms, Inc.

Signature Page to Credit Agreement

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

U.S. BANK NATIONAL ASSOCIATION By   Steven F. Bobinchak   Its   Assistant Vice
President

 

Sanderson Farms, Inc.

Signature Page to Credit Agreement

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

FARM CREDIT WEST, PCA By   /s/ Robert Stornetta   Its   Senior Vice President

 

Sanderson Farms, Inc.

Signature Page to Credit Agreement

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

AMERICAN AGCREDIT, PCA By   /s/ Chris Levine   Its   Vice President

 

Sanderson Farms, Inc.

Signature Page to Credit Agreement

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

BANKPLUS By   /s/ Jay Bourne   Its   Senior Vice President

 

Sanderson Farms, Inc.

Signature Page to Credit Agreement

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

EXHIBIT A

SANDERSON FARMS, INC.

REVOLVING CREDIT NOTE

_______________, 2019

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 March 21, 2019, 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 March 21, 2019, 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.

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

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    

 

-2-

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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 March 21, 2019, 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 March 21, 2019, 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 March 21, 2019
(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 guaranty, 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

 

-2-

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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 Agreement.

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 AGREEMENT, 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 AGREEMENT OR
THE TRANSACTIONS CONTEMPLATED HEREBY.

13. Each Qualified ECP Guarantor hereby jointly and severally absolutely,
unconditionally and irrevocably undertakes to provide such funds or other
support as may be needed from time to time by the Company and each other
Guarantor to honor all of its obligations under this Guaranty Agreement in
respect of Swap Obligations (provided, however, that each Qualified ECP
Guarantor shall only be liable under this Section for the maximum amount of such
liability that can be hereby incurred without rendering its obligations under
this Section, or otherwise under this Guaranty Agreement, voidable

 

-4-

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under applicable law relating to fraudulent conveyance or fraudulent transfer,
and not for any greater amount). The obligations of each Qualified ECP Guarantor
under this Section shall remain in full force and effect until discharged in
accordance with Section 4. Each Qualified ECP Guarantor intends that this
Section constitute, and this Section shall be deemed to constitute, a “keepwell,
support, or other agreement” for the benefit of the Company and each other
Guarantor for all purposes of Section 1a(18)(A)(v)(II) of the Commodity Exchange
Act.

[Signature page follows]

 

-5-

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

Dated as of this 21st day of March, 2019.

 

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

 

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

 

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

 

-6-

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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 March 21, 2019,
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 ___________________ 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 __________________

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 March 21, 2019

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         

 

-2-

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EXHIBIT F

ENVIRONMENTAL DISCLOSURE

NONE

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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%

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EXHIBIT H

LITIGATION; TAX RETURNS; APPROVALS

None other than those matters previously disclosed by Company to Agent and set
forth in Company’s publicly filed 10-K and 10-Qs filed with the SEC.

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

EXHIBIT I

ASSIGNMENT AND ACCEPTANCE

Dated _____________, _____

Reference is made to the Credit Agreement dated as of March 21, 2019 (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 hereto,
the Assignee shall pay to the Assignor on the Effective Date in federal funds
the amount agreed upon between them. It is understood that the 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-

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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-

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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

   $ _____________      $ _____________        _____ % 

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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 March 21, 2019 (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 “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 Agent and the Company with a certificate of
its non-U.S. Person status on IRS Form W-8BEN-E. 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 Agent, and
(2) the undersigned shall have at all times furnished the Company and the 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[    ]

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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 March 21, 2019 (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 “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 W-8BEN-E. 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[    ]

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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 March 21, 2019 (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 “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: (a) an IRS Form W-8BEN-E or (b) an
IRS Form W-8IMY accompanied by an IRS Form W-8BEN-E 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[    ]

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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 March 21, 2019 (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 “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 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: (a) an IRS Form W-8BEN-E or (b) an
IRS Form W-8IMY accompanied by an IRS Form W-8BEN-E 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 Agent, and (2) the undersigned shall have at all
times furnished the Company and the 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[    ]

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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 March 21, 2019 (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.

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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-

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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 March 21, 2019, 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 March 21, 2019, 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.

   $ 90,000,000  

AgCountry Farm Credit Services, PCA

   $ 80,000,000  

AgFirst Farm Credit Bank

   $ 80,000,000  

Compeer Financial, PCA

   $ 80,000,000  

Farm Credit Bank of Texas

   $ 80,000,000  

Farm Credit Services of America, PCA

   $ 80,000,000  

Northwest Farm Credit Services, PCA

   $ 80,000,000  

Regions Bank

   $ 80,000,000  

Bank of the West

   $ 68,000,000  

Farm Credit Mid-America, PCA

   $ 68,000,000  

Greenstone Farm Credit Services, ACA

   $ 68,000,000  

Trustmark National Bank

   $ 39,000,000  

U.S. Bank National Association

   $ 39,000,000  

American AgCredit, PCA

   $ 28,000,000  

Farm Credit West, PCA

   $ 23,000,000  

BankPlus

   $ 17,000,000  

TOTAL

   $ 1,000,000,000