exv10w1






Exhibit 10.1




      




Credit Agreement




among



Sanderson Farms, Inc.



and



Harris N.A.,

as Agent



Regions Bank,

AgFirst Farm Credit Bank

as Co-Documentation Agent



ING Capital LLC,

US Bank National Association

as Syndication Agent




and




The From Time to Time Banks Parties Hereto



February 23, 2011



 




BMO Capital Markets, as Sole Lead Arranger and Sole Book Runner





 









 








Sanderson Farms, Inc.

Credit Agreement




Table of Contents



	 	 	 	 	 	 	 
	Section	 	Heading	 	Page	 
	Section 1.
	 	The Credits	 	 	 1	 
	 
	Section 1.1.
	 	The Revolving Credit; Increase in Revolving Credit Commitments	 	 	1	 
	Section 1.2.
	 	The Revolving Notes	 	 	3	 
	Section 1.3.
	 	Swing Loans	 	 	3	 
	Section 1.4.
	 	Interest Rates	 	 	5	 
	(a)
	 	    Domestic Rate	 	 	5	 
	(b)
	 	    Eurodollar Rate	 	 	6	 
	(c)
	 	    Default Rate	 	 	6	 
	Section 1.5.
	 	Manner of Borrowing and Rate Selection	 	 	6	 
	Section 1.6.
	 	Letters of Credit	 	 	7	 
	Section 1.7.
	 	Reimbursement Obligation	 	 	10	 
	Section 1.8.
	 	Participation in L/Cs	 	 	10	 
	Section 1.9.
	 	Substitution of Lenders	 	 	11	 
	Section 1.10.
	 	Defaulting Lenders	 	 	11	 
	 
	 	 	 	 	 	 
	Section 2.
	 	Fees, Prepayments and Terminations	 	 	12	 
	 
	Section 2.1.
	 	Commitment Fee	 	 	12	 
	Section 2.2.
	 	Agent’s Fee	 	 	12	 
	Section 2.3.
	 	Optional Prepayments	 	 	12	 
	Section 2.4.
	 	Mandatory Prepayments	 	 	13	 
	Section 2.5.
	 	Terminations	 	 	13	 
	 
	 	 	 	 	 	 
	Section 3.
	 	Place and Application of Payments	 	 	13	 
	 
	 	 	 	 	 	 
	Section 4.
	 	Definitions	 	 	14	 
	 
	 	 	 	 	 	 
	Section 5.
	 	Representations and Warranties	 	 	25	 
	 
	Section 5.1.
	 	Organization and Qualification	 	 	25	 
	Section 5.2.
	 	Financial Reports	 	 	25	 
	Section 5.3.
	 	Litigation; Tax Returns; Approvals	 	 	25	 
	Section 5.4.
	 	Regulation U	 	 	26	 
	Section 5.5.
	 	No Default	 	 	26	 
	Section 5.6.
	 	ERISA	 	 	26	 
	Section 5.7.
	 	Compliance with Laws	 	 	26	 
	Section 5.8.
	 	Security Interests and Indebtedness	 	 	26	 
	Section 5.9.
	 	Subsidiaries	 	 	26	 






 









 







	 	 	 	 	 	 	 
	Section	 	Heading	 	Page	 
	Section 5.10.
	 	Accurate Information	 	 	27	 
	Section 5.11.
	 	Enforceability	 	 	27	 
	Section 5.12.
	 	OFAC	 	 	27	 
	Section 5.13.
	 	Trademarks, Franchises, and Licenses	 	 	27	 
	Section 5.14.
	 	Governmental Authority and Licensing	 	 	27	 
	Section 5.15.
	 	Good Title	 	 	27	 
	Section 5.16.
	 	Affiliate Transactions	 	 	28	 
	Section 5.17.
	 	Investment Company	 	 	28	 
	Section 5.18.
	 	Other Agreements	 	 	28	 
	Section 5.19.
	 	Solvency	 	 	28	 
	Section 5.20.
	 	No Broker Fees	 	 	28	 
	 
	 	 	 	 	 	 
	Section 6.
	 	Conditions Precedent	 	 	28	 
	 
	 	 	 	 	 	 
	Section 6.1.
	 	General	 	 	28	 
	Section 6.2.
	 	Initial Extension of Credit	 	 	28	 
	Section 6.3.
	 	Each Extension of Credit	 	 	30	 
	Section 6.4.
	 	Legal Matters	 	 	30	 
	Section 6.5.
	 	Closing Fee	 	 	31	 
	 
	 	 	 	 	 	 
	Section 7.
	 	Covenants	 	 	31	 
	 
	 	 	 	 	 	 
	Section 7.1.
	 	Maintenance of Property	 	 	31	 
	Section 7.2.
	 	Taxes	 	 	31	 
	Section 7.3.
	 	Maintenance of Insurance	 	 	31	 
	Section 7.4.
	 	Financial Reports	 	 	31	 
	Section 7.5.
	 	Inspection	 	 	32	 
	Section 7.6.
	 	Consolidation and Merger	 	 	33	 
	Section 7.7.
	 	Transactions with Affiliates	 	 	33	 
	Section 7.8.
	 	Material Subsidiaries	 	 	33	 
	Section 7.9.
	 	Consolidated Tangible Net Worth	 	 	33	 
	Section 7.10.
	 	Consolidated Indebtedness for Borrowed Money to Total Capitalization	 	 	33	 
	Section 7.11.
	 	Capital Expenditures	 	 	34	 
	Section 7.12.
	 	Compliance with OFAC Sanctions Programs	 	 	34	 
	Section 7.13.
	 	Liens	 	 	35	 
	Section 7.14.
	 	Investments, Loans, Advances and Acquisitions	 	 	36	 
	Section 7.15.
	 	Sale of Tangible Fixed Assets	 	 	37	 
	Section 7.16.
	 	Notice of Suit or Adverse Change in Business or Default	 	 	38	 
	Section 7.17.
	 	ERISA	 	 	38	 
	Section 7.18.
	 	Use of Proceeds	 	 	38	 
	Section 7.19.
	 	Compliance with Laws, etc.	 	 	38	 
	Section 7.20.
	 	Environmental Covenant	 	 	38	 
	Section 7.21.
	 	No Changes in Fiscal Year	 	 	39	 
	Section 7.22.
	 	Change in the Nature of Business	 	 	39	 
	Section 7.23.
	 	No Restrictions	 	 	39	 
	Section 7.24.
	 	Maintenance of Subsidiaries	 	 	39	 






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	Section	 	Heading	 	Page	 
	Section 8.
	 	Events of Default and Remedies	 	 	39	 
	 
	 	 	 	 	 	 
	Section 8.1.
	 	Definitions	 	 	39	 
	Section 8.2.
	 	Remedies for Non-Bankruptcy Defaults	 	 	41	 
	Section 8.3.
	 	Remedies for Bankruptcy Defaults	 	 	41	 
	 
	 	 	 	 	 	 
	Section 9.
	 	Change in Circumstances Regarding Eurodollar Loans	 	 	42	 
	 
	 	 	 	 	 	 
	Section 9.1.
	 	Change of Law	 	 	42	 
	Section 9.2.
	 	Unavailability of Deposits or Inability to Ascertain the Adjusted Eurodollar Rate	 	 	42	 
	Section 9.3.
	 	Taxes, Increased Costs and Reduced Return	 	 	43	 
	Section 9.4.
	 	Funding Indemnity	 	 	44	 
	Section 9.5.
	 	Lending Branch	 	 	45	 
	Section 9.6.
	 	Discretion of Bank as to Manner of Funding	 	 	45	 
	 
	 	 	 	 	 	 
	Section 10.
	 	The Agent	 	 	45	 
	 
	 	 	 	 	 	 
	Section 10.1.
	 	Appointment and Authorization of Agent	 	 	45	 
	Section 10.2.
	 	Agent and its Affiliates	 	 	45	 
	Section 10.3.
	 	Action by Agent	 	 	46	 
	Section 10.4.
	 	Consultation with Experts	 	 	46	 
	Section 10.5.
	 	Liability of Agent; Credit Decision	 	 	46	 
	Section 10.6.
	 	Indemnity	 	 	47	 
	Section 10.7.
	 	Resignation of Agent and Successor Agent	 	 	47	 
	Section 10.8.
	 	L/C Issuer and Swing Line Bank	 	 	48	 
	Section 10.9.
	 	Designation of Additional Agents	 	 	48	 
	 
	 	 	 	 	 	 
	Section 11.
	 	Miscellaneous	 	 	48	 
	 
	 	 	 	 	 	 
	Section 11.1.
	 	Amendments and Waivers	 	 	48	 
	Section 11.2.
	 	Waiver of Rights	 	 	49	 
	Section 11.3.
	 	Several Obligations	 	 	49	 
	Section 11.4.
	 	Non-Business Day	 	 	49	 
	Section 11.5.
	 	Survival of Indemnities	 	 	49	 
	Section 11.6.
	 	Documentary Taxes	 	 	49	 
	Section 11.7.
	 	Representations	 	 	50	 
	Section 11.8.
	 	Notices	 	 	50	 
	Section 11.9.
	 	Costs and Expenses; Environmental Indemnity	 	 	50	 
	Section 11.10.
	 	Counterparts	 	 	51	 
	Section 11.11.
	 	Successors and Assigns; Governing Law; Entire Agreement	 	 	51	 
	Section 11.12.
	 	No Joint Venture	 	 	52	 
	Section 11.13.
	 	Severability	 	 	52	 
	Section 11.14.
	 	Table of Contents and Headings	 	 	52	 
	Section 11.15.
	 	Sharing of Payments	 	 	52	 
	Section 11.16.
	 	Participants	 	 	52	 
	Section 11.17.
	 	Assignments	 	 	53	 






-iii-









 






	 	 	 	 	 	 	 
	Section	 	Heading	 	Page	 
	Section 11.18.
	 	Confidentiality	 	 	55	 
	Section 11.19.
	 	Waiver of Jury Trial	 	 	55	 
	Section 11.20.
	 	USA Patriot Act	 	 	55	 
	Section 11.21.
	 	Withholding Taxes	 	 	56	 
	Section 11.22.
	 	Waiver of Borrower’s Rights	 	 	57	 






	 	 	 

	Exhibit A
	 	Revolving Credit Note

	Exhibit B
	 	Swing Note

	Exhibit C
	 	Letter of Credit Agreement

	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
	 	Commitment Amount Increase Request

	Exhibit K
	 	Term Note

	Schedule 1
	 	Commitments







-iv-









 






Sanderson Farms, Inc.

Credit Agreement




     This Credit Agreement is entered into as of February 23, 2011, 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 Harris 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 5.1 hereof.



Preliminary Statement



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



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


Section 1. The Credits.




     Section 1.1. The Revolving Credit; Increase in Revolving Credit Commitments. (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 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 February 23, 2016 (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 J or in such other form acceptable to



 









 




the Administrative Agent at least five (5) Business Days prior to the desired effective date of
such increase (the “Commitment Amount Increase”) or the date the Term Loans are to be made,
identifying an additional Bank (or additional Revolving Credit Commitments for existing Bank(s))
and the amount of its Revolving Credit Commitment (or additional amount of its Revolving Credit
Commitment(s)) or the Banks that are willing to make the requested Term Loans; provided, however,
that (a) 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
$600,000,000 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 $600,000,000 will
require the approval of the Required Banks, (b) 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, (c) no Event of Default shall have occurred and be continuing at the
time of the request or on the effective date of the Commitment Amount Increase or the date the Term
Loans are requested to be made, (d) all representations and warranties contained in Section 5
hereof shall be true and correct at the effective date of such Commitment Amount Increase or the
date the Term Loans are requested to be made, (e) the Agent’s consent (which shall not be
unreasonably withheld) shall be required for any increase in the amount of an existing Lender’s
Revolving Credit Commitment or the addition of a new Bank, (f) 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, the Guarantor Subsidiaries and the Agent, and (g) on the effective date of a
Commitment Amount Increase and on the date Term Loans are requested to be made hereunder, 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
requested to be made shall be agreed upon by the Company and the Agent. Upon the effectiveness
thereof, the new Bank(s) (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 (i) 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 (ii) 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 hereunder.
Notwithstanding anything herein to the contrary, no Bank shall have any obligation to increase its
Revolving Credit Commitment or make any Term Loan and no Bank’s Revolving Credit Commitment shall
be increased without its consent thereto, and each Bank may at its option, unconditionally and
without cause, decline to increase its Revolving Credit Commitment or make any Term Loan hereunder.



-2-









 







     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 K 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 Bank’s,” 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 loans in U.S. Dollars to
the Company under the Swing Line (individually a
“Swing Loan” and collectively the “Swing Loans”) which shall not in the aggregate at any time
outstanding exceed the Swing Line Sublimit. Swing Loans may be availed of from time to time and
borrowings thereunder may be repaid and used again during the period ending on the Revolving Credit
Termination Date. Each Swing Loan shall be in a minimum amount of $250,000 or such greater amount
which is an integral multiple of $100,000.



-3-









 





     All Swing Loans made by the Swing Line Bank under the Swing Line 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 Swingline Sub-Limit, 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 each Interest
Period and at maturity (whether by acceleration or otherwise). If any Swing Loan is not paid when
due it shall bear interest at a rate per annum (computed on the basis of a year of 365 or 366 days,
as the case may be, for the actual number of days elapsed) determined by adding the Applicable
Margin to the Domestic Rate as in effect from time to time plus 1.5%. Interest on all Swing Loans
after maturity shall be due and payable upon demand.



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



-4-









 




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




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



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



     Section 1.4. Interest Rates. (a) Domestic Rate. Each Domestic Rate Loan shall bear interest
(computed on the basis of a year of 365 or 366 days, as the case may be, and actual days elapsed)
on the unpaid principal amount thereof from the date such Loan is made until maturity (whether by
acceleration, upon prepayment or otherwise) at a rate per annum equal to the sum of the Applicable
Margin plus the Domestic Rate from time to time in effect, payable quarterly in arrears on the last
day of each calendar quarter, commencing on March 31, 2011, and at maturity (whether by
acceleration, upon prepayment or otherwise).



-5-









 





     (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 the date
occurring every date which is three months after the date such Loan is made or created; provided
that if on the last day of the Interest Period applicable to any Eurodollar Loan the Company does
not pay such Loan, such Loan shall automatically become a Domestic Rate Loan as of the day
immediately following the last day of the Interest Period applicable thereto.



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




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




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



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



-6-









 




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




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



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



     Section 1.6. Letters of Credit. (a) Subject to all the terms and conditions hereof,
satisfaction of all conditions precedent to borrowing under this Agreement and so long as no
Potential Default or Event of Default is in existence, at the Company’s request, the L/C Issuer
shall issue, at any time before the Revolving Credit Termination Date, letters of credit (an “L/C”
and collectively the “L/Cs”) for the account of the Company subject to availability under the
Revolving Credit, and the Banks hereby agree to participate therein as more fully described in
Section 1.8 hereof. Each L/C shall be issued pursuant to an application for letter of credit
(collectively the “L/C Agreements” and individually an “L/C Agreement”) in the form of Exhibit C
hereto, shall conform to the general requirements of the Bank for the issuance of letters of credit
as to form and substance, shall be in U.S. Dollars and shall be a letter of credit which the L/C
Issuer may lawfully issue. The L/Cs shall consist of standby and commercial letters of credit in
an aggregate face amount not to exceed $15,000,000. Each L/C shall have an



-7-









 




expiry date not more
than one year from the date of issuance thereof (but in no event later than 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 30 days prior to the Revolving Credit Termination Date. 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, 2008, and on the Revolving Credit Termination Date. The Company shall also pay the L/C
Issuers a fronting fee in the amount of one-eighth of one percent (0.125%) of the face amount of
each standby L/C issued hereunder, payable on the date of issuance of each such standby L/C
hereunder and on the date of each extension, if any, of the expiry date of each such standby L/C
and the relevant L/C Issuer’s usual and customary fees with respect to each trade letter of credit
issued hereunder, payable upon negotiation thereof. In addition, the Company shall pay to the
relevant L/C Issuer for its own account such L/C Issuer’s standard charges for letters of credit
with respect to each L/C. Notwithstanding anything contained herein to the contrary, the L/C
Issuer shall be under no obligation to issue, extend or amend any L/C if a default of any Bank’s
obligations to fund under Section 1.8 exists or any Bank is at such time a Defaulting Lender
hereunder, unless the L/C Issuer has entered into arrangements with the Company or such Bank
satisfactory to the L/C Issuer to eliminate the L/C Issuer’s risk with respect to such Bank.




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



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



-8-









 




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




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



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



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



-9-









 




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.




     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



-10-









 




Loans shall bear interest in accordance with Section 1.4(a) hereof. The Agent shall share with
each Bank on a pro rata basis relative to its Commitment Percentage a portion of each payment of a
Reimbursement Obligation (whether of principal or interest) and any L/C Participation Fee payable
by the Company. Any such amount shall be promptly remitted to the Banks when and as received by
the Agent from the Company.




     Section 1.9. Substitution of Lenders. In the event (a) the Company receives a claim from any
Bank for compensation under Section 9.3 or 11.21 hereof, (b) the Company receives notice from any
Bank of any illegality pursuant to Section 9.1 hereof, (c) any Bank becomes a Defaulting Lender or
such Bank is a Subsidiary or Affiliate of a Person who has been deemed insolvent or becomes the
subject of a bankruptcy or insolvency proceeding or a receiver or conservator has been appointed
for any such Person, or (d) a Bank fails to consent to an amendment or waiver requested under
Section 11.1 hereof at a time when the Required Banks have approved such amendment or waiver (any
such Bank referred to in clause (a), (b), (c), or (d) above being hereinafter referred to as an
“Affected Lender”), the Company may, in addition to any other rights the Company may have hereunder
or under applicable law, require any such Affected Lender to assign, at par, without recourse, all
of its interest, rights, and obligations hereunder (including all of its Commitments and the Loans
and participation interests in L/Cs and other amounts at any time owing to it hereunder and the
other Loan Documents) to an Eligible Assignee specified by the Company, provided that (i) such
assignment shall not conflict 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. Anything contained herein to the contrary notwithstanding,
in the event that any Bank at any time is a Defaulting Lender, then (a) during any Defaulting
Lender Period with respect to such
Defaulting Lender, such Defaulting Lender shall be deemed not to be a “Bank” for purposes of voting
on any matters (including the granting of any consents or waivers) with respect to any of the Loan
Documents and such Defaulting Lender’s Commitments shall be excluded for purposes of determining
“Required Banks” (provided that the foregoing shall not permit an increase in such Bank’s
Commitments or an extension of the maturity date of such Bank’s Loans or other obligations without
such Bank’s consent); (b) to the extent permitted by applicable law, until such time as the
Defaulting Lender Excess with respect to such Defaulting Lender shall have been reduced to zero,
any voluntary prepayment of the Loans shall, if the Agent so directs at the time of making such
voluntary prepayment, be applied to the Loans of other Banks as if such Defaulting Lender had no
Loans outstanding; (c) such Defaulting Lender’s Commitments and outstanding Loans shall be excluded
for purposes of calculating any commitment fee payable to Banks pursuant to Section 2.1 in respect
of any day during any Defaulting Lender Period with respect to such Defaulting Lender, and such
Defaulting Lender shall not be entitled to receive any fee pursuant to Section 2.1 with respect to
such Defaulting Lender’s Commitment in respect of any



-11-









 




Defaulting Lender Period with respect to such
Defaulting Lender (and any L/C Participation Fee otherwise payable to a Bank which is a Defaulting
Lender shall instead be paid to the L/C Issuer for its use and benefit); (d) the utilization of
Commitments as at any date of determination shall be calculated as if such Defaulting Lender had
funded all Loans of such Defaulting Lender; and (e) if so requested by the L/C Issuer at any time
during the Defaulting Lender Period with respect to such Defaulting Lender, the Company shall
deliver to the Agent cash collateral in an amount equal to such Defaulting Lender’s Commitment
Percentage of L/Cs and Reimbursement Obligations then outstanding (to be, held by the Agent as
collateral security for such Defaulting Lender’s obligations to the L/C Issuer with respect to such
L/Cs and Reimbursement Obligations). No Commitment of any Bank shall be increased or otherwise
affected, and, except as otherwise expressly provided in this Section 1.10, performance by the
Company of its obligations hereunder and the other Loan Documents shall not be excused or otherwise
modified as a result of the operation of this Section 1.10. The rights and remedies against a
Defaulting Lender under this Section 1.10 are in addition to other rights and remedies which the
Company may have against such Defaulting Lender and which the Agent or any Bank may have against
such Defaulting Lender.



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 rate equal to the Applicable
Margin in effect as of the time such fee is payable on the average daily unused amount of the
Banks’ Revolving Credit Commitments hereunder in effect from time to time (but without reduction on
account of any outstanding Swing Loans), all such fees to be payable quarterly in arrears on the
last day of each calendar quarter (commencing on March 31, 2011), 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 as of January 31,
2011, 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.



-12-









 





     (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 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 an 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 2 Business Days after
written notice from any Bank of the occurrence thereof without any further notice or demand from
the Agent or any of the Banks, all of which are expressly waived by the Company. Any amount repaid
under the Revolving Credit may, subject to the terms and conditions of this Agreement, be borrowed,
repaid and borrowed again.



     Section 2.5. Terminations. The Company shall have the right at any time upon 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 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 of such payment without set-off, counterclaim or deduction other than those
permitted or required by Section 11.21. Any payments received after 12:00 noon Chicago



-13-









 




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 under the Notes or this Agreement and to transfer the amount so debited from such
account to the Agent for application as herein provided, but the Agent shall give prompt telephonic
notice thereof to the Company.



Section 4. Definitions.




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



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



	 	 	 	 	 	 	 	 

	 

	 	Adjusted Eurodollar Rate
	 	=
	 	Eurodollar Rate
	 

	 	 	 	 	 	 
	 

	 	 	 	 	 	100% — Reserve Percentage






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



     “Affiliate” shall mean any person, company or business entity under common control or having
shareholders owning at least ten percent (10%) of each thereof, whether such common control be
direct or indirect. All of the Company’s officers, shareholders who own, directly or indirectly,
more than 5% of the shares of the Company, directors, joint ventures, Subsidiaries and partners
shall be deemed to be the Company’s Affiliates for purposes of this Agreement.



     “Agent” means Harris N.A., in is 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 July 31 in each calendar year during the term of this Agreement.



     “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, IV and V for the range of Leverage Ratio specified for each Level:



-14-









 





	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Level I	 	 	Level II	 	 	Level III	 	 	Level IV	 	 	Level V	 
	Leverage Ratio
	 	 	<25	%	 	> 25% and <35%	 	> 35% and <45%	 	> 45% and <55%	 	 	>55	%
	Eurodollar Loans
and L/C Participation Fee
	 	 	1.75	%	 	 	2.00	%	 	 	2.50	%	 	 	3.00	%	 	 	3.50	%
	Domestic Rate Loans
	 	 	0.75	%	 	 	1.00	%	 	 	1.50	%	 	 	2.00	%	 	 	2.50	%
	Commitment Fee
	 	 	0.35	%	 	 	0.40	%	 	 	0.45	%	 	 	0.50	%	 	 	0.50	%






     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 ended January 31, 2011), the Agent shall determine the Leverage Ratio for the applicable
period and shall promptly notify the Company of such determination and of any change in the
Applicable Margins resulting therefrom. Any such change in the Applicable Margins shall be
effective as of the date the Agent so notifies the Company with respect to all Loans outstanding
and L/C Participation Fees and commitment fees payable, on such date, and such new Applicable
Margins shall continue in effect until the effective date of the next quarterly redetermination in
accordance with this Section. Each determination of the Leverage Ratio and Applicable Margins by
the Agent in accordance with this Section shall be conclusive and binding on the Company absent
manifest error. From the date hereof until the Applicable Margins are first adjusted pursuant
hereto, the Applicable Margins shall be those set forth in Level I above.



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



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



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



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



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




-15-











 





     “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 acquisitions of such interests by the estate of Joe Franklin Sanderson, deceased, the direct
lineal descendents of Joe Franklin Sanderson, deceased, the direct lineal descendants of Dewey
Sanderson, deceased, their spouses, any trusts for the benefit of any of the foregoing, and any
employee stock ownership plan established by the Company, (b) the failure of individuals who are
members of the board of directors (or similar governing body) of the Company on January 31, 2011
(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, or (c)
any “Change of Control” (or words of like import), as defined in any agreement or indenture
relating to any issue of Indebtedness for Borrowed Money in an aggregate principal amount in excess
of $10,000,000 of the Company shall occur.



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



     “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.



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



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



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



-16-









 





     “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.



     “Defaulting Lender” means any Bank that (a) has failed to fund any portion of the Loans,
participations in L/Cs and Reimbursement Obligations or participations in Swing Loans required to
be funded by it hereunder (herein, a “Defaulted Lender Loan") within two (2) Business Days of the
date required to be funded by it hereunder unless such failure has been cured, (b) has otherwise
failed to pay over to the Agent or any other Bank any other amount required to be paid by it
hereunder within two (2) Business Days of the date when due, unless the subject of a good faith
dispute or unless such failure has been cured, or (c) has been deemed insolvent or become the
subject of a bankruptcy or insolvency proceeding or a receiver or conservator has been appointed
for such Bank.



     “Defaulting Lender Excess” means, with respect to any Defaulting Lender, the excess, if any,
of such Defaulting Lender’s Commitment Percentage of the aggregate outstanding principal amount of
Loans of all Banks (calculated as if all Defaulting Lenders other than such Defaulting Lender had
funded all of their respective Defaulted Lender Loans) over the aggregate outstanding principal
amount of all Loans of such Defaulting Lender.



     “Defaulting Lender Period” means, with respect to any Defaulting Lender, the period commencing
on the date upon which such Bank first became a Defaulting Lender and ending on the earliest of the
following dates: (i) the date on which all Commitments are cancelled or terminated and/or the
Company’s indebtedness, obligations and liabilities under the Loan Documents are declared or become
immediately due and payable and (ii) the date on which (a) such Defaulting Lender is no longer
insolvent, the subject of a bankruptcy or insolvency proceeding or, if applicable, under the
direction of a receiver or conservator, (b) the Defaulting Lender Excess with respect to such
Defaulting Lender shall have been reduced to zero (whether by the funding by such Defaulting Lender
of any Defaulted Lender Loans of such Defaulting Lender or otherwise), and (c) such Defaulting
Lender shall have delivered to the Company and the Agent a written reaffirmation of its intention
to honor its obligations hereunder with respect to its Commitments.



     “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



-17-









 




commercial rate as in effect on such day, with any change in the Domestic Rate resulting from
a change in said prime commercial rate to be effective as of the date of the relevant change in
said prime commercial rate (it being acknowledged and agreed that such rate may not be the Agent’s
best or lowest rate), (b) the sum of (i) the rate determined by the Agent to be the average
(rounded upward, if necessary, to the next higher 1/100 of 1%) of the rates per annum quoted to the
Agent at approximately 10:00 a.m. (Chicago time) (or as soon thereafter as is practicable) on such
day (or, if such day is not a Business Day, on the immediately preceding Business Day) by two or
more Federal funds brokers selected by the Agent for sale to the Agent at face value of Federal
funds in the secondary market in an amount equal or comparable to the principal amount for which
such rate is being determined, plus (ii) 1/2 of 1%, and (c) the LIBOR Quoted Rate for such day plus
1.00%. As used herein, the term “LIBOR Quoted Rate” means, for any day, the rate per annum equal
to the 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 which appears on the LIBOR01 Page 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.




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



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



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



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



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



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



     “Eurodollar Rate” shall mean for each Interest Period applicable to a Eurodollar Loan, (a) the
LIBOR Index Rate for such Interest Period, if such rate is available, and (b) if the LIBOR Index
Rate cannot be determined, the arithmetic average of the rates of interest per annum



-18-









 




(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.




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



     “Excluded Tax” means with respect to any Bank (a) taxes measured by net income (including
branch profit taxes) and franchise taxes imposed in lieu of net income taxes; (b) taxes imposed on
any Bank as a result of a present or former connection between such Bank and the jurisdiction of
the governmental authority imposing such tax or any political subdivision or taxing authority
thereof or therein (other than such connection arising solely from any Bank having executed,
delivered or performed its obligations or received a payment under, or enforced, any Loan
Document); (c) taxes to the extent that the obligation to withhold amounts existed on the date that
such Person became a “Bank” under this Agreement in the capacity under which such Person makes a
claim under Section 11.21(a) or designates a new lending office, except in each case to the extent
such Person is a direct or indirect assignee of any other Bank that was entitled, at the time the
assignment to such Person became effective, to receive additional amounts under Section 11.21(a);
(d) taxes that are directly attributable to the failure (other than as a result of a Change in Law
precluding the lawful delivery by such Bank) by any Bank to deliver the documentation required to
be delivered pursuant to Section 11.21(b); and (e) in the case of a Non-U.S. Bank, any United
States federal withholding taxes imposed on amounts payable to such Non-U.S. Bank as a result of
such Non-U.S. Bank’s failure to comply with FATCA to establish a complete exemption from
withholding thereunder.



     “Existing Agreement” shall mean the Credit Agreement dated as of May 1, 2008, as amended,
among the Company, Bank of Montreal, individually as an L/C Issuer and as agent thereunder, Harris
N.A., individually as an L/C Issuer thereunder, and the other banks and financial institutions
party thereto, as Banks (the banks named or referred to are the “Existing Lenders”).



     “Existing L/C Issuer” means Bank of Montreal.



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



     “FATCA” means Sections 1471 through 1474 of the Code and any regulations or official
interpretations thereof (including any Revenue Ruling, Revenue Procedure, Notice or similar
guidance issued by the IRS thereunder as a precondition to relief or exemption from taxes under
such provisions).



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



-19-









 





     “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.



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



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




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




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




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




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




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


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




     “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).



-20-









 





     “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 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 (i) the Existing L/C Issuer with respect to Existing L/Cs, (ii) Harris
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 their successors in such capacity as provided in Section 1.6(h) hereof.



-21-









 





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



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



     “LIBOR Index Rate” shall mean, for any Interest Period applicable to a Eurodollar Loan, the
rate per annum (rounded upwards, if necessary, to the next higher one hundred-thousandth of a
percentage point) for deposits in U.S. Dollars for a period equal to such Interest Period, which
appears on the LIBOR01 Page as of 11:00 a.m. (London, England time) on the day two Business Days
before the commencement of such Interest Period.



     “LIBOR01 Page” shall mean the display designated as “Renters LIBOR01 Page” on the Telerate
Service (or such other page as may replace LIBOR01 Page on that service or such other service as
may be nominated by the British Bankers’ Association as the information vendor for the purpose of
displaying British Bankers’ Association Interest Settlement Rates for U.S. Dollar deposits).



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



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



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



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



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



     “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-U.S. Bank” means any Bank that is not a United States person as such term is defined in
Section 7701(a)(30) of the Code.



-22-









 





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



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



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



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



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



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



     “PBGC” shall mean the Pension Benefit Guaranty Corporation.



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



     “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.



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



     “Required Banks” means, as of the date of determination thereof, Banks whose outstanding Loans
and interests in L/Cs and Reimbursement Obligations and unused Revolving Credit Commitments
constitute more than 50% of the sum of the total outstanding Loans, interests in L/Cs and
Reimbursement Obligations and unused Revolving Credit Commitments of the Banks.



-23-









 





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



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



     “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 $500,000,000 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.



     “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.



     “Swing Line” shall have the meaning specified in the first paragraph hereof.



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



     “Swing Line Lender’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.



-24-









 





     “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.



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


Section 5. Representations and Warranties.




     The Company represents and warrants to the Banks as follows:



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



     Section 5.2. Financial Reports. The Company has heretofore delivered to the Agent a copy of
the annual audit report as of October 31, 2010, of the Company and its Subsidiaries and unaudited
financial statements of the Company and its Subsidiaries as of, and for the two-month period ending
December 31, 2010. 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 the financial statements at December 31, 2010 and for the period then ended,
there has been no Material Adverse Effect, except those disclosed in the Company’s reports under
the Securities Exchange Act of 1934 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. Except as otherwise disclosed on Exhibit H,
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. All United States federal income tax returns for the
Company and its Subsidiaries required to be filed have been



-25-









 




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 of the proceeds
of any Loan or other extension of credit hereunder will be used to purchase or carry any margin
stock or to extend credit to others for such a purpose.



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



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



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



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



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



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     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, filed after December 31, 2010 and before the date of this Agreement do not
contain any material misstatement of a material fact or omit to state a material fact necessary to
make the statements contained therein not misleading in light of the circumstances in which made.



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



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



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



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



     Section 5.15. Good Title. Except as would not have a Material Adverse Effect, the Company and
its Subsidiaries have good title (or valid leasehold interests) to their assets as



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



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



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



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



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


Section 6. Conditions Precedent.




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




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



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




     (a) this Agreement;



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




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




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




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




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




     (i) (1) projected financial statements for the Company and is Subsidiaries (including a
balance sheet and income statement) for each of the fiscal years ending on October 31, 2011,
October 31, 2012, October 31, 2013, October 31, 2014 and October 31, 2015, and (2) a closing
balance sheet for the Company and its Subsidiaries adjusted to give effect to the initial
extensions of credit hereunder, in each case in form and substance acceptable to the Agent;




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




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



          In addition, at the time of the initial Loan or L/C (whichever shall come first) hereunder, no
Material Adverse Effect shall have occurred since December 31, 2010.





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




     (a) each of the representations and warranties set forth in Section 5 hereof shall have
been true and correct in all material respects on the date of this Agreement; and each of
the representations and warranties set forth in Section 5.1, the third 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), 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;




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




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




     (d) no statute, rule or regulation shall have been adopted by a jurisdiction in which a
Guarantor Subsidiary is incorporated and no judicial decision of an appellate court of such
a jurisdiction shall have been published to the effect in any such case that
guaranty agreements such as the Subsidiary Guaranty are beyond the corporate power of
corporations subject to the laws of such jurisdiction, and neither the Company nor any
Guarantor Subsidiary shall have repudiated, disavowed or purported to terminate, repudiate
or disavow any Guarantor Subsidiary’s obligations under the Subsidiary Guaranty, unless in
any such case all of the Guarantor Subsidiaries shall have been merged into the Company
within 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 Wise,
Carter, Child & Caraway, PA, counsel for the Company and the Guarantor Subsidiaries, substantially
in form and substance satisfactory to each of the Banks and their respective legal counsel.



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


Section 7. Covenants.




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



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



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



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



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




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



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



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



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



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



          (e) as soon as available but in any event within 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. The Company shall pay to the Banks from time to
time upon demand an amount (but not to exceed $3,000 for each inspection) sufficient to compensate
the Banks for their reasonable out-of-pocket fees, charges and expenses in connection with any such
inspection of the Company and the Subsidiaries, provided that so long as no Event of Default shall
have occurred and be continuing, the Company shall be required to pay for only one such inspection
per year.



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



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



     Section 7.8. Material Subsidiaries. The Company shall cause each Material Subsidiary, whether
now existing or hereafter created or acquired, to execute and deliver to the Agent for the benefit
of the Banks, within 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 during each fiscal year of the Company in an amount not less than
$450,000,000 increasing on the last day of each fiscal quarter (commencing with the fiscal quarter
ending April 30, 2011) 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 lesser of (x) $4,000,000 and (y)
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 55% from
the date of this Agreement through October 30, 2014, and 50% from and after October 31, 2014 (at
any time, the “Scheduled Ratio”); provided that at any time during the Company’s fiscal year ending
October 31, 2011 or October 31, 2012, 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., 55% to 60%) for four consecutive fiscal quarters by giving written notice to the
Agent of such election (the “Increase Notice”) in connection with the construction of a new poultry
processing complex in North Carolina (“NCII”). 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 fiscal quarters, provided that the



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Maximum Leverage Ratio shall revert to the Scheduled Ratio
if the Company has not begun and does not begin construction of NCII within three months of the
date on which the Agent receives the Increase Notice. The Company may give only one Increase
Notice.




     Section 7.11. Capital Expenditures. (a) The Company will not, and will not permit any
Subsidiary to, be obligated to spend during any fiscal year for capital expenditures (as defined
and classified in accordance with generally accepted accounting principles consistently applied,
including without limitation any such capital expenditures in respect of Capitalized Leases but
excluding any acquisition permitted by Section 7.14(d) which might constitute such a capital
expenditure and the capital expenditures permitted by clauses (b) and (c) below) in an aggregate
amount for the Company and its Subsidiaries in excess of $60,000,000 for the Company’s fiscal year
ending October 31, 2011 and $55,000,000 for each fiscal year of the Company thereafter, plus in
each case up to $10,000,000 (the “Carryover Amount”) permitted to be spent in the preceding fiscal
year but not actually spent therein. For purposes of this Section, any capital expenditures made
in any fiscal year shall be applied first to the Carryover Amount, if any, available during such
fiscal year.



     (b) The Company will not, and will not permit any Subsidiary to, be obligated to spend capital
expenditures (as defined and classified in accordance with general accepted accounting
principles consistently applied) in connection with the construction of NCII in excess of
$115,000,000 during the term of this Agreement.



     (c) The Company will not, and will not permit any Subsidiary to, be obligated to spend capital
expenditures (as defined and classified in accordance with general accepted accounting principles
consistently applied) in connection with the construction of a new poultry processing complex in
Georgia and any related and required improvements to the Company’s feed mills and other existing
assets in Georgia in excess of $125,000,000 during the term of this Agreement.



     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.



     (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),



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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;




     (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;




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     (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; and




     (h) additional pledges, mortgages, encumbrances, liens, charges and security interests
(including any conditional sale or other title retention agreement and any lease in the
nature thereof) on fixed assets (classified in accordance with generally accepted accounting
principles, consistently applied) having an aggregate book value at the end of the fiscal
quarter immediately preceding the fiscal quarter in which the latest of such mortgages,
liens, or encumbrances are created of no more than $5,000,000 at any one time.



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




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




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




     (d) acquisitions of the Property or business of any Person, provided (i) 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; (ii) that the aggregate purchase price (including the principal amount of
obligations assumed by the Company or a Subsidiary) paid in any single acquisition shall not
exceed $25,000,000 and (iii) that the aggregate purchase price (determined as



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described above) paid in all such acquisitions made prior to the Revolving Credit Termination Date shall
not exceed $35,000,000;




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




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




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




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




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




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



     Section 7.15. Sale of Tangible Fixed Assets. The Company will not, and will not permit any
Subsidiary to, sell, lease, assign, transfer or otherwise dispose of tangible fixed assets (as
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) transfer of such assets between any Subsidiary and the Company or any other
Subsidiary, to each of which this Section shall not apply, and (c) 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 $10,000,000 during the term of
this Agreement.



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     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; and




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



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



     Section 7.18. Use of Proceeds. The Company shall use the proceeds of each Loan and other
extensions of credit hereunder only to repay all of the Company’s indebtedness under the Existing
Agreement, to finance capital expenditures and working capital and general corporate purposes of
the Company and the Subsidiaries 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.



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     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.



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 5 Business Days after the Company receives an invoice therefor;




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




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



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




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




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




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




     (h) Any judgment or judgments, writ or writs, or warrant or warrants of attachment, or
any similar process or processes which order the payment of money in excess of $10,000,000
over and above any insurance proceeds payable with respect thereto or 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 30 days from the date of its entry;




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




     (j) The Company or any Guarantor Subsidiary shall (i) have entered involuntarily
against it an order for relief under the Bankruptcy Code of 1978, as amended, (ii) admit in
writing its inability to pay, or not pay, its debts generally as they



-40-









 







become due or suspend
payment of its obligations, (iii) make an assignment for the benefit of creditors, (iv)
apply for, seek, consent to, or acquiesce in, the appointment of a receiver, custodian,
trustee, conservator, liquidator or similar official for it or any substantial part of its
property, (v) file a petition seeking relief or institute any proceeding seeking to have
entered against it an order for relief under the Bankruptcy Code of 1978, as amended, to
adjudicate it insolvent, or seeking dissolution, winding up, liquidation, reorganization,
arrangement, marshalling of assets, adjustment or composition of it or its debts under any
law relating to bankruptcy, insolvency or reorganization or relief of debtors or fail to
file an answer or other pleading denying the material allegations of any such proceeding
filed against it, or (vi) fail to contest in good faith any appointment or proceeding
described in Section 8.1(k) hereof;




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




     (l) a Change of Control shall occur; or




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



     Section 8.2. Remedies for Non-Bankruptcy Defaults. When any Event of Default, other than an
Event of Default described in subsections (j) and (k) of Section 8.1 hereof, has occurred and is
continuing, the Agent, if directed by the Required Banks, shall give notice to the Company and take
any or all of the following actions: (a) terminate the remaining Commitments and on the date (which
may be the date thereof) stated in such notice, (b) declare the principal of and the accrued
interest on the Notes and all Reimbursement Obligations to be forthwith due and payable and
thereupon the Notes and all Reimbursement Obligations, including both principal and interest, shall
be and become immediately due and payable without further demand, presentment, protest or notice of
any kind, and (c) take any action or exercise any remedy under any of the Loan Documents or
exercise any other action, right, power or remedy permitted by law. Any Bank may exercise the
right of set-off with regard to any deposit accounts or other accounts maintained by the Company
with any of the Banks, and the Company’s indebtedness hereunder shall be satisfied to the extent of
any amount set-off against such indebtedness.



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



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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 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 (i) any Bank shall reasonably determine that
deposits in the amount of any Eurodollar Loan scheduled to be outstanding are not available to it
in the relevant market, (ii) any Bank shall reasonably determine that by reason of circumstances
affecting the relevant market, adequate and reasonable means do not exist for ascertaining the
Adjusted Eurodollar Rate or (iii) the Agent shall have received notice from the Required Banks that
the Adjusted Eurodollar Rate determined or to be determined for such Interest Period will not
adequately and fairly reflect to the cost to the Banks (as conclusively certified by the Banks) of
making or maintaining their affected Loans during such Interest Period, then the Agent shall
promptly give telephonic or telex notice thereof to the Company and the Banks (such notice to be
confirmed in writing), and the obligation of the Banks to make any such Eurodollar Loan in such
amount and for such Interest Period shall terminate until the Company shall thereafter request a
Eurodollar Loan and deposits in such amount and for the Interest Period selected by the Company
shall again be readily available in the relevant market and adequate and reasonable means exist for
ascertaining the Adjusted Eurodollar Rate. Upon the giving of such notice, the Company may elect
to either (i) pay or prepay, as the case may be, such affected Loan or (ii)



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reborrow such affected Loan as another type of Loan or Portion available hereunder, subject to all terms and conditions of
this Agreement. In the event that Eurodollar Loans are unavailable pursuant to this Section, the
Banks and the Company shall negotiate in good faith for Loans bearing interest at a rate per annum
based on the Adjusted CD Rate to be made available to the Company.




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




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




     (ii) subject such Bank, any Eurodollar Loan or any Note to any tax (including, without
limitation, any United States interest equalization tax or similar tax however named
applicable to the acquisition or holding of debt obligations and any interest or penalties
with respect thereto), duty, charge, stamp tax, fee deduction or withholding in respect of
this Agreement, any Eurodollar Loan or any Note except such taxes as may be measured by the
overall net income of such Bank or its lending branch and imposed by the jurisdiction, or
any political subdivision or taxing authority thereof, in which such Bank’s principal
executive office or its lending branch is located or in which the Bank has nexus;




     (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





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amounts
as such Bank shall determine are sufficient to compensate and indemnify it for such increased cost
or reduced amount.




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



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




     (b) If any Bank makes a claim for compensation under this Section 9.4, it shall provide to the
Company a certificate setting forth the amount of such loss, cost or expense in reasonable detail
and an explanation in reasonable detail of the event giving rise to such claim, all in sufficient
detail to permit the Company to determine whether such certificate meets the standard required by
this Section, and such certificate shall be conclusive and binding on the Company as to the amount
thereof except in the case of manifest error.



     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 Bank of Montreal 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



-45-









 





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 Sections 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 Obligations.



     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: (i) with the consent or at the request of the Required Banks
or (ii) 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 Credit Event; (ii) the performance
or observance of any of the covenants or agreements of the Company or any Subsidiary contained
herein or in any other Loan Document; (iii) the satisfaction of any condition specified in Section
6 hereof, except receipt of items required to be delivered to the Agent; or (iv) the validity,
effectiveness, genuineness, enforceability, perfection, value, worth or collectibility hereof or of
any other Loan Document or of any other documents or writing furnished in connection with any Loan
Document; and the Agent makes no representation of any kind or character with respect to any such
matter mentioned in this sentence. The Agent may



-46-









 





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 Obligation 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 30 days after the retiring Agent’s giving of notice of resignation then the
retiring Agent may, on behalf of the Banks, appoint a successor Agent, which may be any Bank
hereunder or any commercial bank, or an Affiliate of a commercial bank, having an office in the
United States of America and having a combined capital and surplus of at least $250,000,000 and be
approved by the Company (which approval shall not be unreasonably withheld). Upon the acceptance
of its appointment as the Agent hereunder, such successor Agent shall thereupon succeed to and
become vested with all the rights and duties of the retiring Agent under the Loan Documents, and
the retiring Agent shall be discharged from its duties and obligations thereunder. After any
retiring Agent’s resignation hereunder as Agent, the provisions of this Section 10 and all
protective provisions of the other Loan Documents shall inure to its benefit as to any actions
taken or omitted to be taken by it while it was Agent, but no




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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 (i) 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 (ii) 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 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) except as provided in Section 1.1(c), 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
(except as provided in Section 1.1(c) hereof), 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.



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     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.



     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.



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     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 225 North 13th Avenue, Laurel, Mississippi 39440, 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, 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 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 attorneys’ fees and expenses), if any, incurred by the Agent, the L/C Issuers, the Banks
or any other holders of a Note in connection with the enforcement against the Company or any
Guarantor Subsidiary of this Agreement or the Notes and the other instruments and documents to be
delivered hereunder, including, without limitation, in connection with any work-out or
restructuring.



          (b) Without limiting the generality of the foregoing, the Company unconditionally agrees to
indemnify, defend and hold harmless, the Agent, each L/C Issuer and each Bank, and covenants not to
sue for any claim for contribution against, the Agent, any L/C Issuer or any Bank for any damages,
costs, loss or expense, including without limitation, response, remedial or removal costs, arising
out of any of the following: (i) any presence, release, threatened release or disposal of any
hazardous or toxic substance or petroleum by the Company or any Subsidiary or otherwise occurring
on or with respect to their respective Property, (ii) the operation or violation of any
Environmental Law, whether federal, state, or local, and any regulations promulgated
thereunder, by the Company or any Subsidiary or otherwise occurring on or with respect to their
respective Property, (iii) any claim for personal injury or property damage in connection with the
Company or any Subsidiary or otherwise occurring on or with respect to their respective Property,
and (iv) the inaccuracy or breach of any environmental representation, warranty or covenant by the
Company made herein or in any loan agreement, promissory note, mortgage, deed of trust, security
agreement or any other instrument or document evidencing or securing







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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 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.



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     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; provided that no such participation shall relieve any
Bank of any of its obligations under this Agreement, and, provided, further that no such
participant shall have any rights under this Agreement except as provided in this Section, and the
Agent shall have no obligation or responsibility to such participant. Any agreement pursuant to
which such participation is granted shall provide (a) that the granting Bank shall retain the sole
right and responsibility to enforce the obligations of the Company under this Agreement and the
other Loan Documents including, without limitation, the right to approve any amendment,
modification or waiver of any provision of the Loan Documents, except that such agreement may
provide that such Bank will not agree to any modification, amendment or waiver of the Loan
Documents that would reduce the amount of or postpone any fixed date for payment of any
indebtedness, obligation or liability in which such participant has an interest and (b) that the
participant agrees to be bound by Section 11.18
of this Agreement to the same extent as if it were a Bank. Any party to which such a participation
has been granted shall have the benefits of Section 9.3 and Section 9.4 hereof. The Company
authorizes each Bank to disclose to any participant or prospective participant under this Section,
if such person has agreed in writing to



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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.




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



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




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




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





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




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




     (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



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



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




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




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



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




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




          (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;







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provided that no such pledge or grant of a security interest shall release a Bank from any of its
obligations hereunder or substitute any such pledgee or secured party for such Bank as a party
hereto; provided further, however, the right of any such pledgee or grantee (other than any Federal
Reserve Bank or central bank) to further transfer all or any portion of the rights pledged or
granted to it, whether by means of foreclosure or otherwise, shall be at all times subject to the
terms of this Agreement.




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




     Section 11.18. Confidentiality. Each Bank will keep confidential any non-public information
concerning the Company and its Subsidiaries furnished by the Company (which is designated by the
Company as confidential at the time such information is furnished to the Bank or is actually known
by such Bank to be confidential) or obtained by such Bank through its inspections and audits
pursuant to Section 7.5 hereof or any Security Document and known by such Bank to be confidential,
except that any Bank may disclose such information (i) to regulatory authorities having
jurisdiction, (ii) pursuant to subpoena or other legal process including in connection with any
pledge or assignment permitted under Section 11.17(c), (iii) to such Bank’s counsel and auditors in
connection with matters concerning this Agreement, (iv) to such Bank’s consultants in connection
with negotiations concerning this Agreement or the other Loan Documents and (v) to prospective
participants or assignees in the Loans and participants and assignees in the Loans, provided that
any Persons described in clauses (iv) and (v) 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).
The provisions of this Section shall survive for a period of two 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



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address of the Company and other information that will allow such Bank to identify the Company in
accordance with the Act.




     Section 11.21. Withholding Taxes. (a) Payments Free of Withholding. Except as otherwise
required by law and subject to Section 11.21(b) hereof, each payment by the Company and the
Guarantor Subsidiaries under this Agreement or the other Loan Documents shall be made without
withholding for or on account of any present or future taxes (other than overall net income taxes
on the recipient) imposed by or within the jurisdiction in which the Company or such Guarantor
Subsidiaries is domiciled, any jurisdiction from which the Company or such Guarantor Subsidiary
makes any payment, or (in each case) any political subdivision or taxing authority thereof or
therein. If any such withholding is so required, the Company or such Guarantor Subsidiary shall
make the withholding, pay the amount withheld to the appropriate governmental authority before
penalties attach thereto or interest accrues thereon, and, other than in regard to Excluded Taxes,
forthwith pay such additional amount as may be necessary so that the net amount actually received
by each Bank, the L/C Issuer, and the Agent free and clear of such taxes (including such taxes on
such additional amount) is equal to the amount which that Bank, L/C Issuer, or the Agent (as the
case may be) would have received had such withholding not been made. If the Agent, the L/C Issuer,
or any Bank pays any amount in respect of any such taxes, penalties or interest, the Company or
such Guarantor Subsidiary shall reimburse the Agent, the L/C Issuer or such Bank for that payment
on demand in the currency in which such payment was made. If the Company or such Guarantor
Subsidiary pays any such taxes (other than Excluded Taxes), penalties or interest, it shall deliver
official tax receipts evidencing that payment or certified copies thereof to the Bank, the L/C
Issuer or Agent on whose account such withholding was made (with a copy to the Agent if not the
recipient of the original) on or before the thirtieth day after payment.



          (b) U.S. Withholding Tax Exemptions. Each Bank or L/C Issuer that is not a United States
person (as such term is defined in Section 7701(a)(30) of the Code) shall submit to the Company and
the Agent on or before the date the initial Loan is made hereunder or, if later, the date such
financial institution becomes a Bank or L/C Issuer hereunder, two duly completed and signed copies
of (i) either Form W-8 BEN (relating to such Bank or L/C Issuer and entitling it to a complete
exemption from withholding under the Code on all amounts to be received by such Bank or L/C Issuer,
including fees, pursuant to the Loan Documents and the Company’s indebtedness, obligations and
liabilities thereunder) or Form W-8 ECI (relating to all amounts to be received by such Bank or L/C
Issuer, including fees, pursuant to the Loan Documents and the Company’s indebtedness, obligations
and liabilities thereunder) of the United States Internal Revenue Service or (ii) solely if such
Bank is claiming exemption from United States withholding tax under Section 871(h) or 881(c) of the
Code with respect to payments of “portfolio interest”, a Form W-8 BEN, or any successor form
prescribed by the Internal Revenue Service, and a certificate representing that such Bank is not a
bank for purposes of Section 881(c) of the Code, is not a 10-percent shareholder (within the
meaning of Section 871(h)(3)(B) of the Code) of the Company and is not a controlled foreign
corporation related to the Company (within the meaning of Section 864(d)(4) of the Code).
Thereafter and from time to time, each Bank and L/C Issuer shall submit to the Company and the
Agent such additional duly completed
and signed copies of one or the other of such Forms (or such successor forms as shall be adopted
from time to time by the relevant United States taxing authorities) and







-56-









 







such other certificates as may be (i) requested by the Company in a written notice, directly or
through the Agent, to such Bank or L/C Issuer and (ii) required under then-current United States
law or regulations to avoid or reduce United States withholding taxes on payments in respect of all
amounts to be received by such Bank or L/C Issuer, including fees, pursuant to the Loan Documents
or the Company’s indebtedness, obligations and liabilities thereunder. Upon the request of the
Company or the Agent, each Bank and L/C Issuer that is a United States person (as such term is
defined in Section 7701(a)(30) of the Code) shall submit to the Company and the Agent a certificate
to the effect that it is such a United States person.




          (c) Inability of Lender to Submit Forms. If any Bank or L/C Issuer determines, as a result of
any change in applicable law, regulation or treaty, or in any official application or
interpretation thereof, that it is unable to submit to the Company or the Agent any form or
certificate that such Bank or L/C Issuer is obligated to submit pursuant to subsection (b) of this
Section 11.21 or that such Bank or L/C Issuer is required to withdraw or cancel any such form or
certificate previously submitted or any such form or certificate otherwise becomes ineffective or
inaccurate, such Bank or L/C Issuer shall promptly notify the Company and Agent of such fact and
the Bank or L/C Issuer shall to that extent not be obligated to provide any such form or
certificate and will be entitled to withdraw or cancel any affected form or certificate, as
applicable.




          (d) Compliance with FATCA. Additionally, each Bank that is organized under the laws of a
jurisdiction other than the United States shall provide any other documentation reasonably
requested by the Company or the Agent sufficient for the Agent and the Company to comply with their
obligations under FATCA and to determine that such Bank has complied with such applicable reporting
requirements.




     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 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 Borrower or to the transactions
contemplated by this Agreement. It is the intent of the Company that the waiver of Borrower



-57-









 




Rights contained in this Section complies with and meets all of the requirements of 12 C.F.R.
§617.7010(c).





-58-











 





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



	 	 	 	 	 
	 	Sanderson Farms, Inc.

 	 
	 	By  	/s/ D. Michael Cockrell	 
	 	 	Its 	CFO & Treasurer	 
	 	 	 	 




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



	 	 	 	 	 
	 	Harris N.A., as Agent and an L/C Issuer

 	 
	 	By  	/s/ Manuel J. Diaz	 
	 	 	Its 	Vice President	 
	 	 	 	 
	 	Bank of Montreal, as an L/C Issuer

 	 
	 	By  	/s/ Manuel J. Diaz	 
	 	 	Its 	Vice President	 
	 	 	 	 



Sanderson Farms, Inc.

Signature Page to Credit Agreement






 









 








	 	 	 	 	 
	 	“Lenders”




BMO Harris Financing, Inc.

 	 
	 	By  	/s/ Manuel J. Diaz	 
	 	 	Its 	Vice President	 
	 	 	 	 



Sanderson Farms, Inc.

Signature Page to Credit Agreement








 









 








	 	 	 	 	 
	 	Regions Bank

 	 
	 	By  	/s/ Stanley Herren	 
	 	 	Its 	Vice President	 
	 	 	 	 



Sanderson Farms, Inc.

Signature Page to Credit Agreement







 









 








	 	 	 	 	 
	 	AgFirst Farm Credit Bank

 	 
	 	By  	/s/ Steven J. O’Shea	 
	 	 	Its 	Vice President	 
	 	 	 	 



Sanderson Farms, Inc.

Signature Page to Credit Agreement








 









 








	 	 	 	 	 
	 	ING Capital LLC

 	 
	 	By  	/s/ William Redmond	 
	 	 	Its 	Vice President	 
	 	 	 



Sanderson Farms, Inc.

Signature Page to Credit Agreement








 









 








	 	 	 	 	 
	 	US Bank National Association

 	 
	 	By  	/s/ Michael Ryno	 
	 	 	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










 









 








	 	 	 	 	 
	 	Farm Credit Bank of Texas

 	 
	 	By  	/s/ Alan Robinson	 
	 	 	Its 	Vice President	 
	 	 	 	 



Sanderson Farms, Inc.

Signature Page to Credit Agreement







 









 








	 	 	 	 	 
	 	Compass Bank

 	 
	 	By  	/s/
Jamie Mc Clure 	 
	 	 	Its 	Vice President 	 
	 	 	 	 



Sanderson Farms, Inc.

Signature Page to Credit Agreement







 









 








	 	 	 	 	 
	 	Trustmark National Bank

 	 
	 	By  	/s/
William H. Edwards 	 
	 	 	Its 	First Vice President 	 
	 	 	 	 



Sanderson Farms, Inc.

Signature Page to Credit Agreement







 









 








	 	 	 	 	 
	 	Bank of the West

 	 
	 	By  	/s/
Andy Bentley 	 
	 	 	Its 	Assistant Vice President
— 

Relationship Manager 	 
	 	 	 	 



Sanderson Farms, Inc.

Signature Page to Credit Agreement








 









 








	 	 	 	 	 
	 	Farm Credit Services of Mid-America, PCA

 	 
	 	By  	/s/
Jay L. Carter 	 
	 	 	Its 	Vice President 	 
	 	 	 	 



Sanderson Farms, Inc.

Signature Page to Credit Agreement





 











 





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

    Finance Group

 	 
	 	By  	/s/
Lisa Caswell
 	 
	 	 	Its 	Vice
President 	 
	 	 	 	 



Sanderson Farms, Inc.

Signature Page to Credit Agreement













 





	 	 	 	 	 
	 	PNC Bank, N.A.

 	 
	 	By 	/s/
Dale A. Stein 	 
	 	 	Its 	Senior
Vice President 
	 	 	 	 
	 



Sanderson Farms, Inc.

Signature Page to Credit Agreement













 






	 	 	 	 	 
	 	Green Stone Farm Credit Services, ACA

 	 
	 	By  	/s/
Curtis Flammini
 	 
	 	 	Its 	Vice
President
	 	 	 	 



Sanderson Farms, Inc.

Signature Page to Credit Agreement













 






	 	 	 	 	 
	 	Farm Credit West, PCA

 	 
	 	By  	/s/
Ben Madonna
 	 
	 	 	Its 	Vice
President
	 	 	 	 



Sanderson Farms, Inc.

Signature Page to Credit Agreement













 





	 	 	 	 	 
	 	AgStar Financial Services, PCA

 	 
	 	By  	/s/
Donald G. Lindeman
 	 
	 	 	Its 	Vice
President 
	 	 	 	 



Sanderson Farms, Inc.

Signature Page to Credit Agreement













 





	 	 	 	 	 
	 	1st Farm Credit Services, PCA

 	 
	 	By  	/s/
Corey J. Waldinger
 	 
	 	 	Its 	Vice
President, Capital Markets
	 	 	 	 



Sanderson Farms, Inc.

Signature Page to Credit Agreement













 





	 	 	 	 	 
	 	Northwest Farm Credit Services, PCA

 	 
	 	By  	/s/ Carol L. Sobson
 	 
	 	 	Its 	Vice President 
	 	 	 	 



Sanderson Farms, Inc.

Signature Page to Credit Agreement













 





	 	 	 	 	 
	 	American Ag Credit, PCA

 	 
	 	By  	 /s/ William E. Rodda
 	 
	 	 	Its 	Vice President
	 	 	 	 



Sanderson Farms, Inc.

Signature Page to Credit Agreement



	 	 	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 
















 







	





Exhibit A




Sanderson Farms, Inc.

Revolving Credit Note



_______________, 2011




     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 Harris 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 February 23, 2011, among the Company, Harris 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 February 23, 2011, 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-









 









	






Exhibit B




Sanderson Farms, Inc.

Swing Note




	 	 	 	 	 
	$10,000,000	 	_____________, 2011







     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 Harris 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 February 23, 2011, among the Company, Harris 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
February 23, 2011, 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 	 	 
	 	 	 	 



 










 






	 	 	 	 	 



Exhibit D




Sanderson Farms, Inc.

Guaranty Agreement



Harris 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 February 23, 2011 (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 Harris N.A., individually and in its capacity as agent thereunder (“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 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”. All defined terms used herein
shall have the meanings set forth in the Credit Agreement unless expressly defined herein.



 









 





     The undersigned are wholly-owned subsidiaries of the Company. As an inducement to each of you
to accept and enter into said Credit Agreement, and in consideration of credit extended and to be
extended by the Guaranteed Creditors to the Company under said Credit Agreement, the undersigned
(hereinafter collectively referred to as the “Guarantors”), acknowledging that the Guaranteed
Creditors have informed the Company that said credit would not be extended but for this guarantee,
hereby jointly and severally guarantee the full and prompt payment to each Guaranteed Creditor at
maturity (whether by acceleration, lapse of time or otherwise) and at all times thereafter of
principal of and interest on all Indebtedness of the Company under the Credit Agreement, and all
extensions or renewals of all or any part thereof and all other indebtedness, liabilities and
obligations of the Company to the Guaranteed Creditors under the Credit Agreement. Notwithstanding
anything in this Guaranty to the contrary, the right of recovery against each Guarantor under this
Guaranty shall not exceed $1.00 less than the lowest amount which would render such Guarantor’s
obligations under this Guaranty void or voidable under applicable law, including fraudulent
conveyance law.



     The undersigned further jointly and severally acknowledge and agree with the Guaranteed
Creditors that this Guaranty and the undertaking of the Guarantors in connection therewith shall be
on and subject to the following terms and conditions:




     1. This Guaranty of payment by the Guarantors shall be a continuing, absolute and
unconditional guaranty and shall remain in full force and effect until all Indebtedness of
the Company to the Guaranteed Creditors shall be fully paid and satisfied and all
commitments of the Guaranteed Creditors under the Credit Agreement to extend credit to or
for the account of the Company shall have terminated. The dissolution, liquidation or
insolvency (howsoever evidenced) of, or the institution of bankruptcy or receivership
proceedings against any one or more of the Guarantors or the Company shall not terminate
this Guaranty.




     2. The obligations and liabilities of the Guarantors, or any of them, hereunder shall
not be affected or impaired by any irregularity, invalidity or unenforceability of or in any
of the Notes or of any agreement, instrument or other document evidencing or creating or
providing for the same.




     3. The obligations and liabilities of the Guarantors, or any of them, hereunder shall
not be affected or impaired by (and the Guaranteed Creditors are hereby expressly authorized
to make from time to time without notice to the Guarantors) any sale, pledge, surrender,
compromise, settlement, release, renewal, extension, indulgence, amendment, alteration,
substitution, exchange, change in, modification or other disposition of any of the Credit
Agreement, the Notes, any other Loan Documents (as defined in the Credit Agreement), any
other guaranty thereof, or of any security or collateral therefor.




     4. The obligations and liabilities of the Guarantors or any of them hereunder shall not
be affected or impaired by any acceptance by the Guaranteed Creditors, or any of them, of
any security or collateral for, or other guarantors upon any of the Indebtedness or by any
failure, neglect, omission, delay or partial action on the part of the



-2-









 







Guaranteed Creditors, or any of them, in the administration of the Indebtedness or to
realize upon or protect any of the Indebtedness or any security or collateral therefor, or
to exercise any lien upon or right of appropriation of any moneys, credits or property of
the Company possessed by any of the Guaranteed Creditors toward the liquidation of the
Indebtedness or by any application of payments or credits thereon or by any other
circumstances whatsoever (with or without notice to or the knowledge of the Guarantors, or
any of them) which may in any manner or to any extent vary the risk of the Guarantors, or
any of them, hereunder or may otherwise constitute a legal or equitable discharge of a
surety or guarantor; it being the purpose and intent that this guaranty of payment and the
obligations and liability of the Guarantors hereunder shall be absolute and unconditional
under any and all circumstances and shall not be discharged except by payment and
performance as herein provided.




     5. In order to hold the Guarantors, or any of them, liable hereunder, there shall be no
obligation on the part of any Guaranteed Creditor, at any time, to resort for payment to any
person directly liable in respect of the Indebtedness or to any other guaranty, or to any
other person, their properties or estates, or to resort to any collateral, security,
property, liens or other rights or remedies whatsoever, and the Guaranteed Creditors shall
have the right to enforce this guaranty of payment irrespective of whether or not other
proceedings or steps are pending seeking resort to or realization upon or from any of the
foregoing. The Guarantors jointly and severally agree to pay all reasonable out-of-pocket
expenses, including court costs and reasonable attorneys’ fees, paid or incurred by the
Guaranteed Creditors or any of them in endeavoring to collect on the Indebtedness or any
part thereof and in enforcing this Guaranty.




     6. The granting of credit to the Company by any Guaranteed Creditor from time to time
in addition to the Indebtedness under the Credit Agreement without notice to the Guarantors,
or any of them, is hereby authorized and shall in no way affect or impair the obligations
and liability of the Guarantors, or any of them, hereunder.




     7. The payment by any Guarantor of any amount or amounts under this guaranty of payment
shall not entitle it, either at law, in equity or otherwise, to any right, title or interest
(whether by way of subrogation or otherwise) in and to any of the Indebtedness, or in and to
any security or collateral therefor, or in or to any amounts at any time paid or payable
under or pursuant to any guaranty by any other person of all or part of Indebtedness, or in
and to any amounts theretofore, then or thereafter paid or applicable to the payment of the
Indebtedness, howsoever such payment or payments may arise, until all of the Indebtedness
has been fully paid and all obligations of the Guaranteed Creditors to extend credit to or
for the benefit of the Company shall have terminated or expired.




     8. This Guaranty Agreement may be enforced by the Guaranteed Creditors acting jointly,
or it may be enforced by any Guaranteed Creditor acting alone or separately with respect to
the Indebtedness which it holds. Any Guaranteed Creditor may, without any notice to the
Guarantors, sell, assign or transfer, to the extent permitted in the Credit Agreement, the
Indebtedness held by it, or any part thereof, or grant



-3-









 







participations therein; and in that event, each and every immediate and successive assignee,
transferee or holder of or participant in all or any part of the Indebtedness shall, to the
extent permitted in the Credit Agreement, have the right to enforce this Guaranty, by suit
or otherwise, for the benefit of such assignee, transferee, holder or participant as fully
as if such assignee, transferee, holder or participant were herein by name specifically
given such rights, powers and benefits; but each Guaranteed Creditor shall have an
unimpaired right to enforce this Guaranty Agreement for its own benefit or for the benefit
of any such participant as to so much of the Indebtedness that it has not sold, assigned or
transferred.




     9. If any payment applied by any Guaranteed Creditor to any of the Indebtedness is
thereafter set aside, recovered, rescinded or required to be returned for any reason
(including, without limitation, the bankruptcy, insolvency or reorganization of the Company
or any other obligor), the Indebtedness to which such payment was applied shall for the
purposes of this Guaranty be deemed to have continued in existence, notwithstanding such
application, and this Guaranty shall be enforceable as to such of the Indebtedness as fully
as if such application had never been made.




     10. This Guaranty Agreement shall be construed according to the internal laws of the
state of Illinois, in which State it shall be performed by the Guarantors. This Guaranty
Agreement and every part hereof shall be binding upon the Guarantors jointly and severally
and upon their respective legal representatives, successors and assigns of each and all of
the undersigned, and shall inure to the benefit of the Guaranteed Creditors and their
respective successors, legal representatives and assigns.




     11. This writing is intended by the parties to be a complete and final expression of
this Guaranty Agreement and is also intended as a complete and exclusive statement of the
terms of that agreement. No course of dealing, course of performance or trade usage, and no
parole evidence of any nature, shall be used to supplement or modify any terms hereof, nor
are there any conditions to the full effectiveness of this Guaranty Agreement.




     12. Each Guarantor and, by their acceptance of this Guaranty, each Guaranteed
Creditor hereby irrevocably waives any and all right to trial by jury in any legal
proceeding arising out of or relative to this Guaranty or the transactions contemplated
hereby.



-4-












 




Dated as of this 23rd day of February, 2011.




	 	 	 	 	 	 	 	 	 

	 	 	 	 	Sanderson Farms, Inc. (Foods Division) 	 	 
	 
	 	 	 	 	 	 	 	 
	Attest:
	 	 	 	 	 	 	 	 
	 

	 	 	 	By	 	 	 	 
	 

	 	 	 	 	 	Its 

	 	 
	 


	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	Sanderson Farms, Inc. (Production Division)	 	 
	 
	 	 	 	 	 	 	 	 
	Attest:
	 	 	 	 	 	 	 	 
	 

	 	 	 	By	 	 	 	 
	 

	 	 	 	 	 	Its 

	 	 
	 


	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	Sanderson Farms, Inc. (Processing Division)	 	 
	 
	 	 	 	 	 	 	 	 
	Attest:
	 	 	 	 	 	 	 	 
	 

	 	 	 	By	 	 	 	 
	 

	 	 	 	 	 	Its 

	 	 
	 


	 	 	 	 	 	 	 	 













-5-









 








Exhibit E




Compliance Certificate



     This Compliance Certificate is furnished to Harris N.A., as agent (the “Agent”), pursuant to
that certain Credit Agreement dated as of February 23, 2011, by and among Sanderson Farms, Inc., a
Mississippi corporation (the “Company”), the Agent and the other Bank parties thereto (the
“Agreement”). Unless otherwise defined herein, the terms used in this Compliance Certificate have
the meanings ascribed thereto in the Agreement.



     The Undersigned Hereby Certifies That:




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




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




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




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



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




     __________________________________________________




     __________________________________________________



 









 





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






	 	 	 	 	  , 
	 	
as Chief _____________ Officer of

Sanderson Farms, Inc.

 	 
	 	 	 



-2-









 








Schedule 1

to Compliance Certificate

Sanderson Farms, Inc.




Compliance Calculations for

Credit Agreement Dated as of February 23, 2011




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)
	 	Adjustment (lesser of $4,000,000 and line (c))	 	$______________
	 
	 	 	 	 
	(e)
	 	(b) — (d)*	 	$______________
	 
	 	 	 	 
	(f)
	 	60% of (e)	 	$______________
	 
	 	 	 	 
	(g)
	 	Net Proceeds of Stock for Current Fiscal Quarter to “as of” date	 	$______________
	 
	 	 	 	 
	(h)
	 	Current Fiscal Quarter’s Required Minimum Amount (a) + (f) + (g)	 	$______________
	 
	 	 	 	 
	(i)
	 	Current Fiscal Year Consolidated Tangible Net Worth	 	$______________
	 
	 	 	 	 
	 	 	Compliance            Yes _____ No _____








 




			
	*	 	But not less than $0.




 









 










	 	 	 	 	 	 	 	 	 	 	 

	Section 7.10 Leverage Ratio	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	(a)	Consolidated Indebtedness for Borrowed Money	 	 	 	$                    	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	(b)	Consolidated Indebtedness for Borrowed Money	 	$                    	 	 	 	 
	 	 	Consolidated Tangible Net Worth	 	$                    	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	Total
	 	 	 	$                    	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	(a)/(b)
	 	 	 	                    	*
	 	* Required to not exceed the percentage set forth in Section 7.10.	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	Compliance Yes                     No                    	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Section 7.11(a) Capital Expenditures	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	(a)	Maximum Amount Allowed	 	 	 	$                    	 
	 	(b)	Expenditures Year-to-date	 	 	 	$                    	 
	 

	 	 	 	(a)-(b)
	 	 	 	 	                    	*
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	Compliance Yes                     No                    	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Section 7.11(b) Capital Expenditures NCII	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	(a)	Maximum Amount Allowed	 	 	 	$	115,000,000	 
	 	(b)	Total Expenditures	 	 	 	$                    	 
	 

	 	 	 	(a)-(b)
	 	 	 	                    	*
	 	 	Compliance Yes                     No                    	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Section 7.11(c) Capital Expenditures (Georgia)	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	(a)	Maximum Amount Allowed	 	 	 	$	125,000,000	 
	 	(b)	Total Expenditures	 	 	 	$                    	 
	 

	 	 	 	(a)-(b)
	 	 	 	                    	*
	 	 	Compliance Yes                     No                    	 	 	 	 	 	 






-2-









 






Exhibit F




Environmental Disclosure



None









 









 








Exhibit G




Schedule of Subsidiaries



	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	State of	 	Percentage of
	 
	 	Name	 	Incorporation	 	  Ownership  
	1.
	 	Sanderson Farms, Inc.	 	Mississippi	 	 	100	%
	 
	 	(Foods Division)	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	2.
	 	Sanderson Farms, Inc.	 	Mississippi	 	 	100	%
	 
	 	(Production Division)	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	3.
	 	Sanderson Farms, Inc.	 	Mississippi	 	 	100	%
	 
	 	(Processing Division)	 	 	 	 	 	 	 	 





















 








Exhibit H




Litigation; Tax Returns; Approvals



None

















 





Exhibit I




Assignment and Acceptance



Dated _____________, _____



     Reference is made to the Credit Agreement dated as of February 23, 2011 (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 Harris N.A., as Agent (the “Agent"). Terms defined in
the Credit Agreement are used herein with the same meaning.



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




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




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




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



 









 







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




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




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




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




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



-2-









 






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



	 	 	 	 	 
	 	

[Assignor Bank]

 	 
	 	By  	 	 
	 	 	Name	 
	 	 	Title 	 
	 



	 	 	 	 	 
	 	[Assignee Bank]

 	 
	 	By  	
 	 
	 	 	Name 	 
	 	 	Title 	 
	 



	 	 	 	 	 
	Accepted and consented this


____ day of _____________



Sanderson Farms, Inc.

 	 
	By  	
 	 
	 	Name 	 
	 	Title 	 
	 
	Accepted and consented to by the Administrative


Agent and L/C Issuer this ___ day of ________




Harris N.A., 


as Agent and L/C Issuer

 	 
	By  	
 	 
	 	Name 	 
	 	Title 	 
	 
	 






-3-









 








Annex I

to Assignment and Acceptance





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



	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Aggregate	 	 	Amount of	 	 	Percentage	 
	 	 	Commitment/Loans	 	 	Commitment/Loans	 	 	Assigned of	 
	Facility Assigned	 	For All Banks	 	 	Assigned	 	 	Commitment/Loans	 
	Revolving Credit
	 	$	_____________	 	 	$	_____________	 	 	 	_____	%
	Term Loan
	 	$	_____________	 	 	$	_____________	 	 	 	_____	%











 









 








Exhibit J




Commitment Amount Increase Request



_______________, ____




	To: 	 	Harris N.A. as Agent for the Banks parties to the Credit Agreement dated as of February 23,
2011 (as extended, renewed, amended or restated from time to time, the “Credit Agreement"),
among Sanderson Farms, Inc., certain Banks which are signatories thereto, and Harris N.A., as
Agent




Ladies and Gentlemen:




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



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



[Include paragraphs 1-4 for a New Bank]




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



 









 





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



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



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



     This Agreement shall be deemed to be a contractual obligation under, and shall be governed
by and construed in accordance with, the laws of the state of Illinois.



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



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





 




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




-2-









 











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



	 	 	 	 	 
	 	Very truly yours,



Sanderson Farms, Inc.




	 	By  	
 	 
	 	 	Name: 	 
	 	 	Title: 	 
	 
	 
	 	[New or existing Bank Increasing Commitments

     or making a Term Loan]




	 	By  	
 	 
	 	 	Name 	 
	 	 	Title 	 




	 	 	 	 	 
	
The undersigned hereby consents on this

__ day of _____________, _____ to the

above-requested Commitment Amount

Increase.


Harris N.A., as Agent

	 
	By  	
 	 
	 	Name 	 
	 	Title 	 
	 








-3-









 








	






Exhibit K




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 Harris 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 February 23, 2011, among the Company, Harris 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 February 23, 2011, 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.



 









 








	




     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-









 






	 	 	 	 	 



Schedule 1




Commitments



	 	 	 	 	 
	Name of Lender	 	Commitment	 
	BMO Harris Financing, Inc.
	 	$	47,000,000.00	 
	Regions Bank
	 	$	40,000,000.00	 
	AgFirst Farm Credit Bank
	 	$	40,000,000.00	 
	ING Capital LLC
	 	$	38,000,000.00	 
	US Bank National Association
	 	$	38,000,000.00	 
	Farm Credit Services of America, PCA
	 	$	38,000,000.00	 
	Farm Credit Bank of Texas
	 	$	38,000,000.00	 
	Compass Bank
	 	$	27,000,000.00	 
	Trustmark National Bank
	 	$	27,000,000.00	 
	Bank of the West
	 	$	19,000,000.00	 
	Farm Credit Services of Mid-America, PCA
	 	$	19,000,000.00	 
	United FCS, PCA d/b/a FCS Commercial Finance Group
	 	$	19,000,000.00	 
	PNC Bank, N.A.
	 	$	19,000,000.00	 
	GreenStone Farm Credit Services, ACA
	 	$	16,000,000.00	 
	Farm Credit West, PCA
	 	$	16,000,000.00	 
	AgStar Financial Services, PCA
	 	$	16,000,000.00	 
	1st Farm Credit Services, PCA
	 	$	15,000,000.00	 






 









 






	 	 	 	 	 
	Name of Lender	 	Commitment	 
	Northwest Farm Credit Services, PCA
	 	$	14,000,000.00	 
	American AgCredit, PCA
	 	$	14,000,000.00	 
	Total
	 	$	500,000,000