PILGRIM'S PRIDE CORPORATION
SECOND AMENDMENT TO SECOND AMENDED AND RESTATED SECURED CREDIT AGREEMENT
Harris Trust and Savings Bank
Chicago, Illinois
The Lenders From Time to Time Parties
to the Credit Agreement Described Below
Ladies and Gentlemen:
Reference is hereby made to that certain Second Amended and Restated
Secured Credit Agreement dated as of November 5, 1999 (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 Company, the Agent and the Banks now wish to amend the Credit
Agreement to extend the Termination Date of the Credit Agreement from May 31,
2004 to May 31, 2005, to increase the amount of the Revolving Credit
Commitments from $50,000,000 to $100,000,000 and to amend certain other
covenants to the Credit Agreement, 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 2 hereof, the Credit Agreement shall be amended as follows:
1.1. Section 1.1(a) of the Credit Agreement shall be amended by replacing
the date "May 31, 2004" appearing therein with the date "May 31, 2005."
1.2. Section 1.1(c) of the Credit Agreement shall be amended to read as
follows:
"(c) The respective maximum aggregate principal amounts of the
Revolving Credit at any one time outstanding and the percentage of the
Revolving Credit available at any time which each Bank by its acceptance
hereof severally agrees to make available to the Company are as follows
(collectively, the "REVOLVING CREDIT COMMITMENTS" and individually, a
"REVOLVING CREDIT COMMITMENT"):
<TABLE>
<CAPTION>
Harris Trust and Savings Bank $31,407,142 31.407%
<S> <C> <C>
U.S. Bancorp Ag Credit, Inc. $27,428,572 27.429%
CoBank, ACB $12,714,286 12.714%
SunTrust Bank, Atlanta $20,000,000 20.000%
Credit Agricole Indosuez, Chicago Branch $8,450,000 8.450%
Total $100,000,000 100%
</TABLE>
Each Bank's Revolving Credit Commitment shall be reduced from time to
time by the aggregate outstanding principal amount of all Bid Loans made
by such Bank, and shall be increased (but in no event above the amount
set forth above for each Bank) by the aggregate principal amount of each
principal repayment of such Bid Loans made from time to time."
1.3. The definition of the term "TURKEY BUSINESS SALE DATE" contained in
Section 4.1 of the Credit Agreement shall be deleted in its entirety.
1.4. Section 7.8 of the Credit Agreement shall be amended to read as
follows:
"SECTION 7.8. LEVERAGE RATIO. The Company will not permit its
Leverage Ratio at any time to exceed (a) 0.625 to 1 at any time prior to
the WLR Acquisition Date, (b) 0.675 to 1 from the WLR Acquisition Date
through the earlier of the date that is two years after the WLR
Acquisition Date and the date on which the book value (as of the date
immediately preceding the WLR Acquisition Date) of Turkey Business Assets
sold, whether in one transaction or in a series of transactions over
time, reaches an aggregate of $30,000,000, and (c) 0.625 to 1 at any time
thereafter."
1.5. Effective on the WLR Acquisition Date, Exhibit K to the Credit
Agreement shall be replaced by Exhibit K attached to this Amendment.
2. CONDITIONS PRECEDENT.
The effectiveness of the Amendment is subject to the satisfaction of all
of the following conditions precedent:
2.1. 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).
2.2. Each of the representations and warranties set forth in Section 5 of
the Credit Agreement shall be true and correct.
2.3. 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.
2.4. All legal matters incident to the execution and delivery hereof and
the instruments and documents contemplated hereby shall be satisfactory to the
Banks.
2.5. The Agent shall have received (in sufficient counterparts for
distribution to each of the Banks) all of the following in a form satisfactory
to the Agent, the Banks and their respective counsel:
(a) copies (executed or certified as may be appropriate) of all
legal documents or proceedings taken in connection with the execution and
delivery of this Amendment, and the other instruments and documents
contemplated hereby; and
(b) Opinion of counsel to the Company substantially in the form of
Exhibit A hereto and satisfactory to the Agent, the Banks and their
respective counsel.
2.6. The Company shall have paid to the Agent for the ratable account of
the Banks that execute this Amendment (the "CONSENTING BANKS") a non-
refundable amendment fee in an amount equal to one-quarter of one percent
(0.25%) of the increase in the amount of such Consenting Bank's Total Exposure
(as defined below) after giving effect to this Amendment. The term "TOTAL
EXPOSURE" means, as of any time the same is to be determined for any Bank, the
sum of such Bank's Revolving Credit Commitment and its Commitment Percentage
of the Bond L/C Exposure at such time.
3. REPRESENTATIONS AND WARRANTIES.
3.1. 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.
4. MISCELLANEOUS.
4.1. The Company hereby requests that Harris extend the Stated Expiration
Date of its Letter of Credit Number SPL 37029 dated June 29, 1999 which Harris
has issued for the Company's account to Harris Trust and Savings Bank, as
trustee (the "TRUSTEE") under the Trust Indenture dated as of June 15, 1999
between Camp County Industrial Development Corporation and the Trustee from
May 31, 2002, to May 31, 2005. The Banks hereby consent and agree to such
extension.
4.2. 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, as amended (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.
4.3. 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, any reference to the Credit Agreement being sufficient to refer to
the Credit Agreement as amended hereby.
4.4. 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.
4.5. 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.
4.6. (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 4.6(b) HEREOF AND
TO THE EXTENT THAT THE FEDERAL LAWS OF THE UNITED STATES OF AMERICA MAY
OTHERWISE APPLY.
(b) NOTWITHSTANDING ANYTHING IN SECTION 4.6(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.
-1-
<PAGE>
Dated as of November ___, 2000.
PILGRIM'S PRIDE CORPORATION
By
Its
Accepted and Agreed to as of the day and year last above written.
HARRIS TRUST AND SAVINGS BANK individually
and as Agent
By
Its
U.S. BANCORP AG CREDIT, INC.
By
Its
COBANK, ACB
By
Its
SUNTRUST BANK, ATLANTA
By
Its
CREDIT AGRICOLE INDOSUEZ
By
Its
By
Its
-1-
<PAGE>
EXHIBIT A
(TO BE RETYPED ON LETTERHEAD OF COUNSEL
AND DATED AS OF DATE OF CLOSING)
______________, 2000
Harris Trust and Savings Bank
Chicago, Illinois
U.S. Bancorp Ag Credit, Inc.
Denver, Colorado
CoBank, ACB
Wichita, Kansas
SunTrust Bank, Atlanta
Atlanta, Georgia
Credit Agricole Indosuez
Chicago, Illinois
Ladies and Gentlemen:
We have served as counsel to Pilgrim's Pride Corporation, a Delaware
corporation (the "BORROWER"), in connection with the Second Amendment to
Second Amended and Restated Secured Credit Agreement dated as of ____________,
2000 (the "AMENDMENT"). As such counsel, we have examined executed original
of. Capitalized terms used but not defined herein shall have the meanings
ascribed to those terms in that certain Second Amended and Rested Secured
Credit Agreement by and among the Borrower, Harris Trust and Savings Bank in
its capacity as agent ("AGENT") and in its individual capacity, and the other
lenders party thereto ("BANKS"). As counsel to the Borrower, we are familiar
with the certificate of incorporation and by-laws of the Borrower. We have
also examined an executed original of the Amendment and such other instruments
and records and inquired into such other factual matters and matters of law as
we deem necessary or pertinent to the formulation of the opinions hereinafter
expressed.
In our examination, we have assumed the genuineness of all signatures,
the authenticity of all documents submitted to us as originals and the
conformity with authentic original documents of all documents submitted to us
as copies. We have relied upon certificates of governmental officials and
appropriate representatives of the Borrower and upon representations made in
or pursuant to the Amendment and the Loan Documents.
In rendering the opinions expressed below, we have assumed, with respect
to all of the documents referred to in this letter, that (except to the extent
set forth in our opinions expressed below as to the Borrower):
(i) (a) such documents have been duly authorized, executed and
delivered by all of the parties to such documents, and (b) such documents
constitute legal, valid, binding and enforceable obligations of all of
the parties to such documents;
(ii) all signatories to such documents have been duly authorized; and
(iii) all of the parties to such documents are duly organized and
validly existing and have the power and authority (corporate and other)
to execute and deliver, and to perform their obligations under, such
documents.
Based upon and subject to the foregoing and subject also to the comments,
assumptions, exceptions and qualifications set forth below, and having
considered such questions of law as we have deemed necessary as a basis for
the opinions expressed below, we are of the opinion that:
1. The Borrower is a corporation validly existing and in good standing
under the laws of the State of Delaware with full and adequate corporate power
and authority to carry on its business as now conducted and is duly licensed
or qualified and in good standing in the State of Texas.
2. The Borrower has the corporate power to borrow from you, to mortgage,
pledge, assign and otherwise encumber its assets and properties as collateral
security for such borrowings, to execute and deliver the Amendment and to
observe and perform all the matters and things therein provided for. The
execution and delivery of the Amendment by the Borrower does not, nor will the
observance or performance by the Borrower of any of the matters or things
therein provided for, violate any provision of law or of the respective
certificate of incorporation or by-laws of the Borrower (there being no other
agreements under which the Borrower is organized) or, to our knowledge, of any
provision of any material indenture or agreement binding upon the Borrower or
any of its properties or assets.
3. The Amendment has been duly authorized by all necessary corporate
action (no stockholder approval being required) and has been executed and
delivered by the Borrower and constitute the valid and binding agreement of
the Borrower enforceable against it in accordance with its respective terms.
4. No order, authorization, consent, license or exemption of, or filing
or registration with, any court or any state or federal governmental
department, agency, instrumentality or regulatory body, is or will be required
in connection with the lawful execution and delivery of the Amendment or
observance and performance by the Borrower of any of the terms of the
Amendment.
5. To our knowledge, there is no action, suit, proceeding or
investigation at law or in equity before or by any court or public body
pending or threatened against or affecting the Borrower or any of its assets
and properties which, if adversely determined, could reasonably be expected to
result in any material adverse change in the properties, business, operations
or condition of the Borrower or in the value of the collateral security for
your loans and other credit accommodations to the Borrower.
The foregoing opinions are subject to the following comments,
assumptions, exceptions and qualifications:
(A) In rendering the opinion set forth in paragraph 1 above as to
existence and good standing, this firm has relied solely on the Existence,
Qualification and Good Standing Certificates that this firm received in
response to this firm's June 29, 2000 request for confirmation of the
existence and good standing of the Borrower in the State of Delaware, and
qualification to do business in the State of Texas, copies of which
certificates have been furnished to you.
(B) In rendering the opinion set forth in paragraph 2 above, this firm
has not conducted any analysis of compliance with any numeric or financial
standards contained in any material agreement and this firm expresses no
opinion with respect thereto or the effects thereof.
(C) The opinions expressed in paragraph 3 above are subject to (i) laws
relating to bankruptcy, insolvency, reorganization, moratorium, fraudulent
conveyance or transfer or other similar laws relating to or affecting the
rights of creditors generally, and (ii) principles of equity (regardless of
whether considered in a proceeding in equity or at law), including, without
limitation (a) the possible unavailability of specific performance, injunctive
relief or any other equitable remedy and (b) concepts of materiality,
reasonableness, good faith and fair dealing.
(D) This firm expresses no opinion with respect to the enforceability of
Section 4.6(b) of the Amendment or provisions in the Amendment relating to
delay or omission of enforcement of rights or remedies, or waivers of
defenses, waivers of nonwaivable benefits bestowed by operation of law; or the
right of any person or entity to institute or maintain any action in any court
or upon matters respecting the jurisdiction of any court.
(E) In rendering the portions of the foregoing opinions that involve a
concept of materiality, this firm has relied exclusively on the officers of
the Borrower in determining materiality.
(F) In connection with statements herein qualified by "our knowledge," or
as to our examination has been limited to discussions with the officers and
other representatives of the Borrower by, and those statements refer only to
what is in the actual current consciousness of, attorneys in the Dallas office
of this firm who have been involved in the representation of the Borrower in
connection with the transactions described in the Amendment, and we have made
no independent investigations as to the accuracy or completeness of any of the
representations, warranties, data or other information, written or oral, made
or furnished by the Borrower to us or to you.
(G) We are admitted to practice in the State of Texas. This opinion
letter is limited in all respects to the laws of the State of Texas, the
federal laws of the United States of America and the General Corporation Law
of the State of Delaware, and we assume no responsibility as to the
applicability or the effect of any other laws. No opinion is expressed herein
with respect to any laws, ordinances, statutes or regulations of any county,
city or other political subdivision of the State of Texas.
(H) This firm notes that the Amendment by its terms purport to be
governed by the laws of the State of Illinois. While this firm expresses no
opinion with respect to the laws of the State of Illinois, in rendering the
opinions above, this firm has assumed that the internal laws of the State of
Illinois are the same as the internal laws of the State of Texas. We have not
conducted any analysis to determine if such assumption is correct.
This opinion is provided to the addressees, and is provided only in
connection with this transaction and may not be relied upon in any respect by
any other person or for any other purpose.
Respectfully submitted,
<PAGE>
EXHIBIT K
EXISTING INVESTMENTS
1. Investments, if any, arising from the sale of receivables at a
discount pursuant to any receivables securitization program to which the
Company is a party which provides for the sale by the Company, without
recourse, of its receivables for a cash consideration of not less than 70% of
the unpaid value of such receivables, and including in any event the
receivables securitization program pursuant to which the Company will sell to
Pilgrim's Pride Funding Corporation, a Delaware corporation, all or
substantially all of the Company's receivables and Pilgrim's Pride Funding
Corporation will in turn sell an undivided interest in all of such receivables
to Pooled Accounts Receivable Capital Corporation.
2. Land held for Investment.
3. Investments in an aggregate amount not to exceed $1,000,000 in
Southern Hens, Inc.
4. Investments in Dallas Reinsurance Company, Ltd.
5. Investments in Overseas Distribution Solutions LLC.
6. Investments in equity interest of Agricultural Production Credit
Association ("APCA") as APCA may from time to time require in accordance with
its by-laws and capital plan.
7. Investments in oil and gas interests, upon which the Company receives
royalties and other income.
8. Investments by WLR Foods, Inc. in various publicly traded
corporations. Attached to this schedule is a list of companies in which WLR
Foods, Inc. owns common stock and the number of shares owned.
9. Investments by WLR Foods, Inc. in equity interest of Greater
Shenandoah Valley Development Company ("GSVD") as GSVD may from time to time
require in accordance with its partnership agreement.
10. Investments by WLR Foods, Inc. in equity interest of Food Processors
Water Cooperative, Inc. (the "COOPERATIVE") as the Cooperative may from time
to time require in accordance with its by-laws.
11. Investments in equity interest of American Poultry.
<PAGE>
WLR FOODS, INC.
STOCK CERTIFICATE LIST
<TABLE>
<CAPTION>
CERTIFICATE NUMBER OF ISSUE
ISSUING COMPANY NUMBER SHARES DATE
<S> <C> <C> <C>
Cagle's, Inc. CS 720 01/24/91
Cagle's, Inc. CS 1982 01/15/94
Cagle's, Inc. CS 2537 01/13/95
ConAgra, Inc. S79102 01/29/91
ConAgra, Inc. S107010 12/02/91
Geo. A. Hormel & Company CB 76476 11/26/93
Hormel Foods Corporation ZQ S101542 01/26/00
Pilgrim's Pride Corporation DS 6480 02/07/91
Pilgrim's Pride Corporation CA0548 07/30/99
Sanderson Farms, Inc. SFC 3330 01/31/91
Sanderson Farms, Inc. SFC 8574 02/22/95
Sara Lee Corporation ZQ SA00196079 10 01/29/91
Sara Lee Corporation ZQ SF00080239 10 12/01/92
Sara Lee Corporation ZQ SG00073285 20 12/01/98
Seaboard Corporation FBU 952 11/14/91
Smithfield Foods, Inc. CU 95433 08/23/93
Smithfield Foods, Inc. CU 98453 09/25/97
Southern States Leesburg Cooperative, X 10509 01/01/82
Inc.
Supervalu Inc. ZQ R042571 12 09/08/99
The Christiana Companies, Inc. M5529 12/18/95
Tyson Foods, Inc. DA 131859 02/01/91
Tyson Foods, Inc. DA 150625 04/15/91
Tyson Foods, Inc. DA 285535 02/09/98
Wal-Mart Stores, Inc. SL 604101 07/28/92
Wal-Mart Stores, Inc. SL 852665 02/25/93
Highland Telephone
</TABLE>
