Pilgrim's Pride Corporation
Second Amendment to Secured Credit Agreement and Waiver
Harris Trust and Savings Bank
Chicago, Illinois
FBS Ag Credit, Inc.
Denver, Colorado
Internationale Nederlanden (U.S) Capital Corporation, formerly known
as Internationale Nederlanden Bank N. V. ("ING Bank")
New York, New York
Boatmen's First National Bank of Kansas City
Kansas City, Missouri
First Interstate Bank of Texas, N.A.
Dallas, Texas
Ladies and Gentlemen:
Reference is hereby made to that certain Secured Credit
Agreement dated as of May 27, 1993 (the "Credit Agreement") among the
undersigned, Pilgrim's Pride Corporation, a Delaware corporation (the
"Company"), 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 meanings as in the Credit Agreement unless otherwise
defined herein.
The Banks extend a $75,000,000 revolving credit facility to
the Company on the terms and conditions set forth in the Credit
Agreement. The Company, the Agent and the Banks now wish to amend the
Credit Agreement to permit the Company to pay certain dividends on its
capital stock, all on the terms and conditions and in the manner set
forth in this Amendment.
1. Amendments.
Upon satisfaction of all of the conditions precedent set forth
in Section 3 hereof, the Credit Agreement shall be amended as follows:
1.1. Section 7.9(c) of the Credit Agreement shall be
amended to read as follows:
"(c) from the last day of Fiscal Year 1995 and
at all times
during each Fiscal Year thereafter, an amount in any Fiscal Year equal
to the minimum amount required to be maintained during the preceding
Fiscal Year plus an amount equal to 75% of the Company's Net Income
(but not less than zero) during such Fiscal Year, if the Company's
Leverage Ratio for such Fiscal Year is equal to or greater than 0.5 to
1, or 50% of the Company's Net Income (but not less than zero) if the
Company's Leverage Ratio for such Fiscal Year is less than 0.5 to 1."
1.2. Section 7.15 of the Credit Agreement shall be
amended
to read as follows:
".c2.Section 7.15. Dividends and Certain Other Restricted
Payments;. The Company will not (a) declare or pay any dividends or
make any distribution on any class of its capital stock (other than
dividends payable solely in its capital stock) or (b) directly or
indirectly purchase, redeem or otherwise acquire or retire any of its
capital stock (except out of the proceeds of, or in exchange for, a
substantially concurrent issue and sale of capital stock) or (c) make
any other distributions with respect to its capital stock; provided,
however, that if no Potential Default or Event of Default shall exist
before and after giving effect thereto, the Company may pay (i)
dividends in an aggregate amount not to exceed $1,700,000 in any
Fiscal Year, and (ii) dividends permitted under Section 7.15(i) during
the immediately preceding Fiscal Year that were declared but not paid
in the immediately preceding Fiscal Year."
2. Waiver.
Upon satisfaction of the conditions precedent set forth in
Section 3 hereof:
2.1. The Banks hereby waive non-compliance by the Company
with Section 7.15 of the Credit Agreement resulting from a payment of
dividends on the Company's capital stock in the amount of $413,839.33
on September 30, 1994.
2.2. The waiver contained in Section 3.1 of this
Amendment
is limited to matters set forth in that Section, and the Company
agrees that it remains obligated to comply with the terms of the
Credit Agreement and the other Loan Documents, including Section 7.15
of the Credit Agreement, and that the Banks shall not be obligated in
the future to waive any provision of the Credit Agreement or the other
Loan Documents.
3. Conditions Precedent.
The effectiveness of the Amendment is subject to the
satisfaction of all of the following conditions precedent:
3.1. The Company and each of the Banks shall have
executed
this Amendment (such execution may be in several counterparts and the
several parties hereto may execute on separate counterparts).
3.2. Mr. and Mrs. Lonnie A. Pilgrim shall have executed
and
delivered to the Banks the Guarantors' Consent in the form set forth
below.
3.3. Each of the representations and warranties set forth
in Section 5 of the Credit Agreement shall be true and correct.
3.4. The Company shall be in full compliance with all of
the terms and conditions of the Credit Agreement and no Event of
Default or Potential Default shall have occurred and be continuing
thereunder or shall result after giving effect to this Amendment.
3.5. All legal matters incident to the execution and
delivery hereof and the instruments and documents contemplated hereby
shall be satisfactory to the Banks.
3.6. Harris shall have received a written consent from
CoBank with respect to this Amendment.
Section 4. Representations And Warranties.
Section 4.1. The Company, by its execution of this
Amendment, hereby represents and warrants the following:
(a) each of the representations and warranties set
forth
in Section 5 of the Credit Agreement is true and correct as of the
date hereof, except that the representations and warranties made under
Section 5.3 shall be deemed to refer to the most recent annual report
furnished to the Banks by the Company; and
(b) the Company 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.
5. Miscellaneous.
5.1. The Company has heretofore executed and delivered to
the Agent that certain Security Agreement Re: Accounts Receivable,
Farm Products and Inventory dated as of May 27, 1993 (the "Security
Agreement") and the Company hereby agrees that the Security Agreement
shall secure all of the Company's indebtedness, obligations and
liabilities to the Agent and the Banks under the Credit Agreement as
amended by this Amendment, that notwithstanding the execution and
delivery of this Amendment, the Security Agreement shall be and remain
in full force and effect and that any rights and remedies of the Agent
thereunder, obligations of the Company thereunder and any liens or
security interests created or provided for thereunder shall be and
remain in full force and effect and shall not be affected, impaired or
discharged thereby. Nothing herein contained shall in any manner
affect or impair the priority of the liens and security interests
created and provided for by the Security Agreement as to the
indebtedness which would be secured thereby prior to giving effect to
this Amendment.
5.2. Except as specifically amended herein the Credit
Agreement and the Notes shall continue in full force and effect in
accordance with their original terms. 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 or Notes being sufficient to
refer to the Credit Agreement or the Notes as amended hereby.
5.3. The Company agrees to pay all out-of-pocket costs
and
expenses incurred by the Agent and Banks in connection with the
preparation, execution and delivery of this Amendment and the
documents and transactions contemplated hereby, including the fees and
expenses of Messrs. Chapman and Cutler.
5.4. 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.
5.5. (a) This Amendment and the rights and duties of the
parties hereto, shall be construed and determined in accordance with
the internal laws of the State of Illinois, except to the extent
provided in Section 5.5(b) hereof and to the extent that the Federal
laws of the United States of America may otherwise apply.
(b) Notwithstanding anything in Section 5.5(a) hereof to
the contrary, nothing in this Amendment, the Credit Agreement, the
Notes, or the Other Loan Documents shall be deemed to constitute a
waiver of any rights which the Company, the Agent or any of the Banks
may have under the National Bank Act or other applicable Federal law.
Dated as of December 6, 1994.
Pilgrim's Pride Corporation
By Lonnie Bo Pilgrim
Its Chief Executive Officer
Accepted and Agreed to as of the day and year last above written.
Harris Trust And Savings Bank individually and as Agent
By Carl Blackham
Its Vice President
FBS Ag Credit, Inc.
By Douglas Hoffner
Its Vice President
Internationale Nederlanden (U.S.) Capital Corporation, formerly known
as Internationale
Nederlanden Bank N. V.
By Daniel W. Lamprecht
Its Vice President
Boatmen's First National Bank of Kansas City
By Randy Anders
Its Vice President
First Interstate Bank of Texas, N.A.
By Ken Taylor
Its Banking Officer
Guarantors' Consent
The undersigned, Lonnie A. Pilgrim and Patty R. Pilgrim, have
executed and delivered a Guaranty
Agreement dated as of May 27, 1993 (the "Guaranty") to the Banks. As
an additional inducement to and in consideration of the Banks'
acceptance of the foregoing Amendment, the undersigned hereby agree with the
Banks as follows:
1. Each of the
undersigned consents to the execution of the foregoing Amendment by the
Company and acknowledges that this consent is not required under the
terms of the Guaranty and that the execution hereof by the
undersigned shall not be construed to require the Banks to obtain the
undersigneds' consent to any future amendment, modification or waiver of
any term of the Credit Agreement except as otherwise provided in said
Guaranty. Each of the undersigned hereby agrees that the Guaranty shall
apply to all indebtedness, obligations and liabilities of the Company to
the Banks, the Agent and under the Credit Agreement, as amended
pursuant to the foregoing Amendment. Each of the undersigned further
agrees that the Guaranty shall be and remain in full force and effect.
2. All terms used herein shall have the same meaning as
in the foregoing Amendment, unless otherwise expressly defined herein.
Dated as of December 6, 1994.
Lonnie A. Pilgrim
Patty R. Pilgrim