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EXHIBIT 10.2
SANDERSON FARMS, INC.
GUARANTY AGREEMENT
Harris N.A.
Chicago, Illinois
The Banks 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 November 17,
2005 (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, and the lenders from
time to time parties thereto (all of said
lenders, including Harris N.A. in its
individual capacity, being referred to
collectively as the "Banks" and
individually as a "Bank", and said Harris
N.A. as agent for the Banks under the
Credit Agreement being hereinafter referred
to in such capacity as the "Agent"),
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 Harris agrees
to make available to the Company a
Swingline with all loans thereunder to be
evidenced by the Swingline Note of the
Company (all such Revolving Notes and the
Swingline Note being hereinafter
referred to collectively as the "Notes" and
individually as a "Note"). In
addition the Company may request N.A.
("Harris") 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 Banks
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 Banks to the Company
under said Credit Agreement, the
undersigned (hereinafter collectively referred
to as the "Guarantors"), acknowledging that
the Banks 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 the Agent and each of the
Banks 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
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obligations of the Company to the Banks and
the Agent 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 Banks 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 Banks and the Agent
shall be fully
paid and satisfied and all commitments of the Banks 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 Banks are hereby
expressly
authorized to make from time to time without notice to the
Guarantors) any
sale, pledge, surrender, compromise, settlement, release,
renewal,
extens
