PILGRIM'S PRIDE CORPORATION
SECOND AMENDMENT TO SECURITY AGREEMENT
RE: ACCOUNTS RECEIVABLE, FARM PRODUCTS AND INVENTORY
Reference is hereby made to that certain Security Agreement Re:
Accounts Receivable, Farm Products and Inventory dated as of May 27, 1993,
as amended (the "SECURITY AGREEMENT"), from the undersigned, Pilgrim's
Pride Corporation, a Delaware corporation (the "COMPANY") to Harris Trust
and Savings Bank, not individually but as agent (the "AGENT") for itself
and such other lenders (collectively the "BANKS" and individually a "BANK")
which from time to time become parties to that certain Secured Credit
Agreement dated as of May 27, 1993, as amended and restated pursuant to the
Amended and Restated Secured Credit Agreement dated as of August 11, 1997,
as amended, among the Company, the Agent and the Banks (the "CREDIT
AGREEMENT"). All defined terms used herein shall have the same meanings as
in the Security Agreement unless otherwise defined herein.
Concurrently herewith, the Company, the Agent and the Banks are
amending the Credit Agreement to permit the Company to enter into accounts
receivable securitization transactions from time to time. Also
concurrently herewith the Company and Pilgrim's Pride Funding Corporation,
a Delaware corporation ("FUNDING CORP.") are entering into a Purchase and
Contribution Agreement pursuant to which the Company will sell to Funding
Corp. all or substantially all of the Company's Receivables. Funding Corp.
will then sell an undivided interest in all of such Receivables to Pooled
Accounts Receivable Capital Corporation ("PAR CAPITAL") pursuant to a
Receivables Purchase Agreement among the Company, Funding Corp., PAR
Capital and Nesbitt Burns Securities, Inc. In connection with the
amendment to the Credit Agreement described above and the sales described
above the Company has requested that the Agent release its security
interest in the Company's Receivables under the Security Agreement and the
Agent is willing to do so, all on the terms and conditions set forth
herein. Accordingly, the Agent and the Company hereby agree as follows:
1. The Agent hereby releases the security interest granted to it by
the Company pursuant to the Security Agreement in any and all right, title
and interest of the Company, whether now owned or existing or hereafter
created, acquired or arising, in and to the following (the "RELEASED
COLLATERAL"):
(a) all Receivables (as hereinafter defined) of the Company that
are sold or purported to be sold by Company to PPFC pursuant to the
Purchase and Sale Agreement (the "SOLD RECEIVABLES");
(b) all Related Security with respect to Sold Receivables;
(c) all monies due or to become due with respect to any of the
foregoing;
(d) all books and records related to any of the foregoing; and
(e) all proceeds of any of the foregoing (as defined in the
applicable UCC) including without limitation, all funds which are
received by Company, the PPFC or the Servicer, from or on behalf of
the Obligors in payment of any amounts owed (including without
limitation, finance charges, interest and all other charges) in
respect of any Sold Receivable, or are applied to such amounts owed by
the Company (including without limitation, insurance payments, if any,
that Company or the Servicer applies in the ordinary course of its
business to amounts owed in respect of any Sold Receivable).
As used herein, the following terms shall have the following meanings:
"CONTRACT" means, with respect to any Sold Receivable, any and
all contracts, understandings, instruments, agreements, invoices,
notes, or other writings pursuant to which such Sold Receivable arises
or which evidences such Sold Receivable or under which an Obligor
becomes or is obligated to make payment in respect of such Sold
Receivable.
"OBLIGOR" means, with respect to any Sold Receivable the Person
obligated to make payments pursuant to the Contract relating to such
Sold Receivable.
"PAR" means Pooled Accounts Receivable Capital Corporation, a
Delaware corporation, as purchaser under the Receivables Purchase
Agreement.
"PERSON" means an individual, partnership, corporation (including
a business trust), joint stock company, trust, unincorporated
association, joint venture, limited liability company or other entity,
or a government or any political subdivision or agency thereof.
"PILGRIM'S PRIDE" means Pilgrim's Pride Corporation, a Delaware
corporation.
"PPFC" means Pilgrim's Pride Funding Corporation, a Delaware
corporation.
"PURCHASE AND SALE AGREEMENT" means that certain Purchase and
Sale Agreement dated as of June __, 1998, between Company and PPFC, as
amended, supplemented, amended and restated or otherwise modified from
time to time.
"RECEIVABLE" means any indebtedness and other obligations owed to
the Company or any right of the Company to payment from or on behalf
of an Obligor, whether constituting an account, chattel paper,
instrument or general intangible, arising in connection with the sale
of goods or the rendering of services by the Company, and includes,
without limitation, the obligation to pay any finance charges, fees
and other charges with respect thereto. Indebtedness and other
obligations arising from any one transaction, including, without
limitation, indebtedness and other obligations represented by an
individual invoice or agreement, shall constitute a Receivable
separate from a Receivable consisting of the indebtedness and other
obligations arising from any other transaction.
"RECEIVABLES PURCHASE AGREEMENT" means that certain Receivables
Purchase Agreement dated as of June __, 1998 among Company, as
servicer, PPFC, as seller, PAR, as purchaser and Nesbitt Burns
Securities Inc., as agent for PAR.
"RELATED SECURITY" means, with respect to any Sold Receivable:
(i) all of the Secured Party's interest in any goods, and
documentation or title evidencing the shipment or storage of any
goods, relating to any sale giving rise to such Sold Receivable;
(ii) all other security interests or liens and property
subject thereto from time to time purporting to secure payment of
such Sold Receivable, whether pursuant to the Contract related to
such Sold Receivable or otherwise, together with all UCC
financing statements or similar filings signed by an Obligor
relating thereto; and
(iii) all guaranties, indemnities, insurance and other
agreements (including the related Contract) or arrangements of
whatever character from time to time supporting or securing
payment of such Sold Receivable or otherwise relating to such
Sold Receivable whether pursuant to the Contract related to such
Sold Receivable or otherwise.
"SERVICER" means Pilgrim's Pride, as initial Servicer together
with its successors and permitted assigns in such capacity.
2. The term "COLLATERAL" as used in the Security Agreement shall no
longer include the Released Collateral.
3. Intentionally Omitted.
4. Intentionally Omitted.
5. Intentionally Omitted.
6. Without limiting the foregoing, the Company hereby agrees that,
notwithstanding the execution and delivery hereof, (i) all rights and
remedies of the Agent under the Security Agreement, (ii) any liens or
security interests created or provided for thereunder except liens and
security interests in the Released Collateral, and (iii) all obligations of
the Company thereunder are, and as amended hereby shall remain, in full
force and effect for the benefit and security of all the Secured
Obligations. Nothing herein contained shall in any manner affect or impair
the liens and security interest created and provided for by the Security
Agreement as to the indebtedness which would be secured thereby prior to
giving effect hereto.
7. The Company hereby repeats and reaffirms all covenants,
agreements, representations and warranties contained in the Security
Agreement as supplemented hereby, each and all of which covenants,
agreements, representations and warranties are and shall remain applicable
to the Collateral and all the Secured Obligations.
8. The Company hereby represents and warrants to the Banks that as
of the date hereof and as of the time that this Amendment becomes
effective, each of the representations and warranties set forth in the
Security Agreement as amended hereby are and shall be and remain true and
correct and the Company shall be in full compliance with all of the terms
and conditions of the Security Agreement as amended hereby and no event of
default under the Security Agreement as amended hereby, or any other event
which with the lapse of time, the giving of notice or both would constitute
such an event of default, shall have occurred and be continuing.
9. Reference to this specific Amendment need not be made in any
note, document, letter, certificate, the Credit Agreement, the Term Credit
Agreement, the Reimbursement Agreement, the Security Agreement or any
communication issued or made pursuant to or with respect to the Credit
Agreement, the Term Credit Agreement, the Reimbursement Agreement, or the
Security Agreement, any reference to the Security Agreement being
sufficient to refer to the Security Agreement as amended hereby.
10. 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.
Upon execution hereof by the Agent and the Company in the manner
hereinafter set forth, this Amendment shall be a contract between said
parties for the purposes hereinabove set forth.
Dated as of June __, 1998.
PILGRIM'S PRIDE CORPORATION
By
Its________________________________
HARRIS TRUST AND SAVINGS BANK,
individually and as Agent
By
Its_______________________________