Sanderson William R – ‘SC 13D/A’ on 7/11/03 re: Sanderson Farms Inc – EX-6

On:  Friday, 7/11/03, at 4:19pm ET   ·   Accession #:  950144-3-8488   ·   File #:  5-40009

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Amendment to General Statement of Beneficial Ownership   —   Schedule 13D
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: SC 13D/A    Sanderson Farms, Inc. SC 13D/A                      HTML     59K 
 2: EX-6        EX-6 Second Amendment to Credit Agreement              4     17K 

EX-6   —   EX-6 Second Amendment to Credit Agreement

EX-6
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                                                                       EXHIBIT 6

JOE FRANKLIN SANDERSON, JR. AND WILLIAM RAMON SANDERSON,
NOT INDIVIDUALLY BUT SOLELY AS CO-EXECUTORS OF THE ESTATE OF
JOE FRANKLIN SANDERSON, DECEASED

SECOND AMENDMENT TO CREDIT AGREEMENT

Harris Trust and Savings Bank                                                   
Chicago, Illinois                                                               

The Lenders from time to time parties hereto                                    

SunTrust Bank (formerly known as                                                
SunTrust Bank, Atlanta)                                               
Atlanta, Georgia                                                                

Ladies and Gentlemen:                                                           

       Reference is hereby made to that certain Credit Agreement dated as of
March 21, 2000, as amended (the "Credit Agreement"), among the undersigned, JOE 
FRANKLIN SANDERSON, JR. AND WILLIAM RAMON SANDERSON, not individually but solely
as co-executors of the estate of Joe Franklin Sanderson, Deceased (the          
"Borrower"), you (the "Banks") and Harris Trust and Savings Bank, as agent for  
the Banks (the "Agent"). All defined terms used herein shall have the same      
meaning as in the Credit Agreement unless otherwise defined herein.             

         The Borrower has requested that the Banks amend the Credit Agreement to
remove the mortgage on certain property located in Mississippi and commonly     
known as the Pine Lane Ranch from the Collateral and the Banks are willing to do
so in the manner and on the terms and conditions set forth herein.              

1.    AMENDMENTS.                                           

   Upon satisfaction of all of the conditions precedent set forth in
Section 2 hereof, the Credit Agreement shall be amended as follows:             

      1.1. Section 2.2 of the Credit Agreement shall be amended to read as
follows:                                                                        

              "Section 2.2. Under Margin - Additional Pledge. If for any
        reason, including a decline in the Market Value of the Securities, the
   ratio (the "Loan-to-Value Ratio") of (i) the remainder of (x) the
         unpaid principal amount of the Term Loans, minus (y) the sum of (A) the
      amount of any Cash Collateral provided to the Agent and securing the
       obligations of the Borrower with respect to the principal of the Term
       Loans, and (B) if an SFI Guaranty has been executed and delivered and
    is in effect, the principal amount of the Term Loans guaranteed by
    Sanderson Farms, Inc. pursuant to such SFI Guaranty, to the Market
    Value of the Securities, exceeds 60%, the Borrower will notify the
       Agent that the Borrower is under margin. Within five Business Days of
         the giving of any such notice to the Agent, the Borrower will cause the
         Loan-to-Value Ratio to be reduced to 50% by either (i) with the consent
       of the Agent, making a payment on the Term Loans in the amount of the
shortfall, or                                                 

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    (ii) pledging to the Agent for the benefit of the Banks additional
   Collateral that is acceptable to the Agent in its sole discretion
      exercised in a commercially reasonable manner. It is acknowledged by
      the Banks that the common stock of Sanderson Farms, Inc. and cash or
      cash equivalents are acceptable Collateral. "Market Value" means, to
    the extent quotations are available, the closing sale price of the
        Securities on the preceding Business Day as appearing on any regularly
     published reporting or quotation service or, if there is no closing
       sale price, any reasonable estimate used by the Borrower or the Agent
         in accordance with sound banking practices; provided, however, that any
         equity Securities having a closing sale price of less than $5 per share
       or unit shall be deemed to have a Market Value of zero dollars ($0)."

     1.2. Section 4 of the Credit Agreement shall be amended by deleting
therefrom the definitions of the terms "Loan Value of Pine Lane Ranch,"         
"Partnership" and "Pine Lane Ranch Mortgage."                                   

        1.3. The first paragraph of Section 7.10 of the Credit Agreement shall
be amended to read as follows:                                                  

             "The Borrower shall not, without the Banks' prior written
      consent, distribute or transfer without receipt of fair market value
       consideration any shares of the common stock of Sanderson Farms, Inc.
     held by the Borrower or all or a substantial part of the Borrower's
      other assets; provided, however, that if (a) no Potential Default or
Event of Default has occurred and is continuing or would exist
    immediately after the distribution, (b) after giving effect to the
      distribution the Borrower's Net Worth (as defined below) is not less
      than $2,500,000, and (c) after giving effect to the distribution the
         Loan to Value Ratio (determined without regard to the amount of any SFI
       Guaranty that may be in effect) does not exceed 25%, the Borrower may
     during the term of this Agreement distribute to the legatees of the
Estate not more than (x) 200,000 shares of the common stock of
     Sanderson Farms, Inc. (or an equivalent amount of cash based on the
Market Value on the Business Day immediately preceding the    
      distribution, or any combination of cash and shares) in the calendar
      year 2000 and 100,000 shares of the common stock of Sanderson Farms,
        Inc. (or an equivalent amount of cash or any combination of shares and
       cash) in each calendar year thereafter, and (y) in each calendar year
        after the year 2000 the shares of the common stock of Sanderson Farms,
        Inc. (or an equivalent amount of cash or any combination of shares and
         cash) which were (or would have been had the conditions of clauses (a),
      (b) and (c) been satisfied) permitted to be distributed under clause
         (x) above and which were not distributed during the period specified in
       clause (x); provided further, however, that if after giving effect to
       any distribution permitted hereby the Loan to Value Ratio (determined
     without regard to the amount of any SFI Guaranty that is in effect)
         shall be less than 15% but equal to or greater than 5% the Borrower may
distribute an additional 100,000 shares of the common stock of
Sanderson Farms, Inc. (or an equivalent amount of cash or any 
   combination of shares and cash) and if after giving effect to any
   distribution permitted hereby the Loan to Value Ratio (determined
     without regard to the amount of any SFI Guaranty that is in effect)
         shall be less than 5% the Borrower may distribute an additional 400,000
       shares of the common stock of Sanderson Farms, Inc. (or an equivalent
         amount of cash or any combination of shares and cash; provided further,
   however, that in no event shall the aggregate number of shares of
    common stock of Sanderson Farms, Inc. distributed pursuant to this
        Section 7.10 exceed 700,000 shares (or an equivalent amount of cash or
any combination of shares and cash) during the entire term of 

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     this Agreement. At least one Business Day prior to any distribution
        permitted under this paragraph the Borrower shall deliver to the Agent
         a written verification of the Borrower's Net Worth, in form and content
        acceptable to the Agent and as of the date not more than 30 days prior
       to the date of delivery, together with a projection of the Borrower's
    Net Worth and a calculation of the Loan to Value Ratio immediately
after the proposed distribution."                             

        1.4. Section 8.1 of the Credit Agreement shall be amended by replacing
the "; or" appearing at the end of subsection (k) thereof with a period and by  
deleting subsection (l) thereof.                                                

     1.5. The Banks hereby authorize and direct the Agent to release all
liens and security interests granted to it for the benefit of the Banks pursuant
to the Pine Lane Ranch Mortgage (as defined in the Credit Agreement before      
giving effect to this Amendment) and in furtherance thereof to execute and      
deliver to the Borrower such releases, terminations and other instruments and   
documents as may be necessary to effect such release.                           

2. CONDITIONS PRECEDENT.                                      

       The effectiveness of this Amendment is subject to the satisfaction of
all of the following conditions precedent:                                      

        2.1. The Borrower, the Agent and each of the Banks shall have executed
this Amendment.                                                                 

3. REPRESENTATIONS AND WARRANTIES.                            

        3.1. Each of the representations and warranties set forth in Section 5
of the Credit Agreement are true and correct.                                   

   3.2. The Borrower is in full compliance with all of the terms and
conditions of the Credit Agreement and no Event of Default or Potential Default 
has occurred and is continuing thereunder or shall result after giving effect to
this Amendment.                                                                 

4. MISCELLANEOUS.                                             

         4.1. Reference to this specific Amendment need not be made in any note,
document, letter, certificate, the Credit Agreement itself, the Notes, or any   
communication issued or made pursuant to or with respect to the Credit Agreement
or the Notes, any reference to the Credit Agreement being sufficient to refer to
the Credit Agreement as amended hereby.                                         

        4.2. This Amendment may be executed in any number of counterparts, and
by the different parties on different counterparts, all of which taken together 
shall constitute one and the same agreement. Any of the parties hereto may      
execute this Amendment by signing any such counterpart and each of such         
counterparts shall for all purposes be deemed to be an original. This Amendment 
shall be governed by the internal laws of the State of Illinois.                

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 Upon acceptance hereof by the Agent and the Banks in the manner
hereinafter set forth, this Amendment shall be a contract between us for the    
purposes hereinabove set forth.                                                 

Dated as of July 5, 2001.                                     

        /s/Joe Franklin Sanderson, Jr.
                     JOE FRANKLIN SANDERSON, JR., AS CO-EXECUTOR
                  OF THE ESTATE OF JOE FRANKLIN SANDERSON,
                      DECEASED, AND NOT IN HIS INDIVIDUAL CAPACITY

    /s/William Ramon Sanderson
                 WILLIAM RAMON SANDERSON, AS CO-EXECUTOR
                  OF THE ESTATE OF JOE FRANKLIN SANDERSON,
                      DECEASED, AND NOT IN HIS INDIVIDUAL CAPACITY

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

       HARRIS TRUST AND SAVINGS BANK
         individually and as Agent

By /s/ Curtis Flammini
                          --------------------------------------------
Its Vice President

SUNTRUST BANK         

By /s/ Hugh E. Brown  
                           ---------------------------------------------
Its Vice President
                              ------------------------------------------

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Dates Referenced Herein   and   Documents Incorporated by Reference

				Referenced-On Page
This ‘SC 13D/A’ Filing		Date		First		Last			Other Filings
Filed on:		7/11/03							4,  SC 13D/A
		7/5/01		4
		3/21/00		1
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