Exhibit 10.1

PREMIUM STANDARD FARMS, INC.,
Issuer

PSF GROUP HOLDINGS, INC.,
PREMIUM STANDARD FARMS OF NORTH CAROLINA, INC.,
LUNDY INTERNATIONAL, INC.,
and
LPC TRANSPORT, INC.,
Guarantors

and

WILMINGTON TRUST COMPANY,
Trustee
_________________

Second Supplemental Indenture

Dated as of April 21, 2005
_________________

91/4% Senior Notes due 2011

 

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SECOND SUPPLEMENTAL INDENTURE

          SECOND SUPPLEMENTAL INDENTURE (this “Second Supplemental Indenture”)
dated as of April 21, 2005 among Premium Standard Farms, Inc., a Delaware
corporation (the “Company”), PSF Group Holdings, Inc., a Delaware corporation,
Premium Standard Farms of North Carolina, Inc., a Delaware corporation, Lundy
International, Inc., a North Carolina corporation, and LPC Transport, Inc., a
Delaware corporation (the “Guarantors”), and Wilmington Trust Company, a
Delaware banking corporation, as trustee (the “Trustee”).

RECITALS

          WHEREAS, pursuant the Indenture (the “Original Indenture”) dated as of
June 7, 2001 the Company issued its $175,000,000 91/4% Senior Notes due 2011
(the “Notes”), which Original Indenture has been supplemented by a First
Supplemental Indenture dated as of March 31, 2002 (the Original Indenture as so
supplemented, the “Indenture”);

          WHEREAS, the Company has offered to purchase all of the Notes (the
“Offer”) and has solicited consents (the “Solicitation”) to certain amendments
to the Indenture pursuant to the Company’s Offer to Purchase and Consent
Solicitation Statement dated April 6, 2005;

          WHEREAS, Section 9.02 of the Indenture provides that the Company, when
authorized by a Board Resolution (as evidenced by a Board Resolution delivered
to the Trustee), and the Trustee may amend or supplement the Indenture with the
written consent of the Holders of at least a majority in aggregate principal
amount of the Notes;

          WHEREAS, in accordance with Section 9.02 of the Indenture, the Company
has obtained the written consent to the proposed amendments to the Indenture
from the Holders of at least a majority in aggregate principal amount of the
Notes; and

          WHEREAS, the Company is authorized to enter into this Supplemental
Indenture by a Board Resolution, and the Trustee has received an Opinion of
Counsel and an Officers’ Certificate stating that the execution of this
Supplemental Indenture is permitted by the Indenture and all conditions
precedent under the Indenture have been satisfied.

          NOW, THEREFORE, for and in consideration of the foregoing premises, it
is mutually covenanted and agreed, for the equal and proportionate benefit of
all Holders of the Notes, as follows:

AGREEMENTS

          SECTION 1.01. Capitalized Terms. Capitalized terms used herein without
definition shall have the meanings assigned to them in the Indenture.

          SECTION 2.01. Amendments to Indenture. At such time as the Company
delivers written notice to the Trustee that Notes representing at least a
majority in aggregate principal amount of the Notes validly tendered and not
validly withdrawn pursuant to the Offer have been accepted for purchase:

(a)      The following Sections of the Indenture, and any corresponding
provisions in the Notes, shall be deleted in their entirety and replaced with
“Intentionally Omitted”:

 

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      Existing Section or     Subsection Number   Caption  
Section 4.03
  Limitation on Indebtedness
Section 4.04
  Limitation on Restricted Payments
Section 4.05
  Limitation on Dividend and Other Payment Restrictions Affecting Restricted
Subsidiaries
Section 4.06
  Limitation on the Issuance and Sale of Capital Stock of Restricted
Subsidiaries
Section 4.07
  Limitation on Issuances of Guarantees by Restricted Subsidiaries
Section 4.08
  Limitation on Transactions with Stockholders and Affiliates
Section 4.09
  Limitation on Liens
Section 4.10
  Limitation on Sale-Leaseback Transactions
Section 4.13
  Existence
Section 4.14
  Payment of Taxes and Other Claims
Section 4.15
  Maintenance of Properties and Insurance
Section 4.16
  Notice of Defaults
Section 4.18
  Commission Reports and Reports to Holders
Section 4.19
  Waiver of Stay, Extension or Usury Laws
Section 4.20
  Issuance of Subsidiary Guarantees by Restricted Subsidiaries

(b)      Section 4.11 of the Indenture shall be amended by deleting the text of
such Section in its entirety and replacing it with the following text:

          SECTION 4.11. Limitation on Asset Sales.

     In the event and to the extent that the Net Cash Proceeds received by the
Company or any of its Restricted Subsidiaries from one or more Asset Sales
occurring on or after the Closing Date in any period of 12 consecutive months
exceed 10% of Adjusted Consolidated Net Tangible Assets (determined as of the
date closest to the commencement of such 12-month period for which a
consolidated balance sheet of the Company and its Subsidiaries has been filed
with the Commission or provided to the Trustee), then the Company shall or shall
cause the relevant Restricted Subsidiary to:

     (i) within twelve months after the date Net Cash Proceeds so received
exceed 10% of Adjusted Consolidated Net Tangible Assets,

     (A) apply an amount equal to such excess Net Cash Proceeds to permanently
repay unsubordinated Indebtedness of the Company or any Subsidiary Guarantor or
Indebtedness of any other Restricted Subsidiary, in each case owing to a Person
other than the Company or any Affiliate of the Company, or

     (B) invest an equal amount, or the amount not so applied pursuant to clause
(A) (or enter into a definitive agreement committing to so invest within
12 months after the date of such agreement), in Replacement Assets, and

     (ii) apply (no later than the end of the 12-month period referred to in
clause (i)) such excess Net Cash Proceeds (to the extent not applied pursuant to
clause (i) as extended in accordance with any definitive agreement referred to
in subclause (B)) as provided in the following paragraphs of this Section 4.11.

     The amount of such excess Net Cash Proceeds required to be applied (or to
be committed to be applied) during such 12-month period as set forth in clause
(i) of the preceding sentence and not applied as so required by the end of such
period shall constitute “Excess Proceeds.”

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     If, as of the first day of any calendar month, the aggregate amount of
Excess Proceeds not theretofore subject to an Offer to Purchase pursuant to this
Section 4.11 totals at least $10.0 million, the Company must commence, not later
than the fifteenth Business Day of such month, and consummate an Offer to
Purchase from the Holders (and if required by the terms of any Indebtedness that
is pari passu with the Notes (“Pari Passu Indebtedness”), from the holders of
such Pari Passu Indebtedness) on a pro rata basis an aggregate principal amount
of Notes (and Pari Passu Indebtedness) equal to the Excess Proceeds on such
date, at a purchase price equal to 100% of their principal amount, plus, in each
case, accrued interest (if any) to the Payment Date. If any Excess Proceeds
remain after consummation of an Offer to Purchase, the Company or any Restricted
Subsidiary may use such Excess Proceeds for any purpose not otherwise prohibited
by this Indenture.

(c)      Section 4.17 of the Indenture shall be amended by deleting the text of
such Section in its entirety and replacing it with the following text:

          SECTION 4.17. Compliance Certificates.

     The Company shall deliver to the Trustee, within 90 days after the end of
the last fiscal quarter of each year, an Officers’ Certificate stating whether
or not the signers know of any Default or Event of Default that occurred during
such fiscal quarter; such certificate shall contain a certification from the
principal executive officer, principal financial officer or principal accounting
officer of the Company that a review has been conducted of the activities of the
Company and its Restricted Subsidiaries and the Company’s and its Restricted
Subsidiaries’ performance under this Indenture and that the Company has complied
with all conditions and covenants under this Indenture. For purposes of this
Section 4.17, such compliance shall be determined without regard to any period
of grace or requirement of notice provided under this Indenture.

(d)      Section 5.01 of the Indenture shall be amended by deleting the text of
such Section in its entirety and replacing it with the following text:

          SECTION 5.01. When Company or Guarantors May Merge, Etc.

     Neither the Company nor PSF Group Holdings will consolidate with, merge
with or into, or sell, convey, transfer, lease or otherwise dispose of all or
substantially all of its property and assets (as an entirety or substantially an
entirety in one transaction or a series of related transactions) to, any Person
or permit any Person to merge with or into it unless:

     (i) it shall be the continuing Person, or the Person (if other than it)
formed by such consolidation or into which it is merged or that acquired or
leased such property and assets of (the “Surviving Person”) shall be a
corporation organized and validly existing under the laws of the United States
of America or any jurisdiction thereof and shall expressly assume, by a
supplemental indenture, executed and delivered to the Trustee, all of the
Company’s or PSF Group Holdings’ obligations, as the case may be, under this
Indenture and the Notes;

     (ii) [Intentionally Omitted]

     (iii) [Intentionally Omitted]

     (iv) [Intentionally Omitted]

     (v) it delivers to the Trustee an Officers’ Certificate (if such
transaction involves the Company, attaching the arithmetic computations to
demonstrate compliance with clauses (iii) and

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(iv)) and Opinion of Counsel, in each case stating that such consolidation,
merger or transfer and such supplemental indenture complies with this
Section 5.01 and that all conditions precedent provided for herein relating to
such transaction have been complied with; and

     (vi) each Guarantor, unless such Guarantor is the Person entering into such
transaction under this Section 5.01 shall have by amendment to its Note
Guarantee confirmed that its Note Guarantee shall apply to the obligations of
the Company or the Surviving Person in accordance with the Notes and this
Indenture.

       Each Subsidiary Guarantor (other than any Subsidiary Guarantor whose Note
Guarantee is to be released in accordance with the terms of this Indenture) will
not, and the Company will not cause or permit any Subsidiary Guarantor to,
consolidate with or merge with or into any Person other than the Company or any
other Subsidiary Guarantor unless:

     (i) the entity formed by or surviving any such consolidation or merger (if
other than the Subsidiary Guarantor) is a corporation organized and existing
under the laws of the United States or any State thereof or the District of
Columbia;

     (ii) such entity assumes by supplemental indenture all of the obligations
of the Subsidiary Guarantor on its Note Guarantee; and

     (iii) [Intentionally Omitted]

     (iv) [Intentionally Omitted]

     (v) it delivers to the Trustee an Officers’ Certificate and Opinion of
Counsel, in each case stating that such consolidation, merger or transfer and
such supplemental indenture complies with this Section 5.01 and that all
conditions precedent provided for herein relating to such transaction have been
complied with.

(e)      Section 6.01 of the Indenture shall be amended by deleting the text of
such Section in its entirety and replacing it with the following text:

          SECTION 6.01. Events of Default.

     The following events will be defined as “Events of Default” in this
Indenture:

     (a) default in the payment of principal of (or premium, if any, on) any
Note when the same becomes due and payable at maturity, upon acceleration,
redemption or otherwise;

     (b) default in the payment of interest on any Note when the same becomes
due and payable, and such default continues for a period of 30 days;

     (c) (i) default in the performance or breach of the provisions of this
Indenture applicable to (A) mergers, consolidations and transfers of all or
substantially all of the assets of the Company or PSF Group Holdings or
(B) mergers or consolidations of any Subsidiary Guarantor or (ii) the failure by
the Company to make or consummate an Offer to Purchase in accordance with
Section 4.11 or Section 4.12;

     (d) [Intentionally Omitted]

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     (e) [Intentionally Omitted]

     (f) [Intentionally Omitted]

     (g) a court having jurisdiction in the premises enters a decree or order
for (A) relief in respect of the Company, any Subsidiary Guarantor, PSF Group
Holdings or any Significant Subsidiary in an involuntary case under any
applicable bankruptcy, insolvency or other similar law now or hereafter in
effect, (B) appointment of a receiver, liquidator, assignee, custodian, trustee,
sequestrator or similar official of the Company, any Subsidiary Guarantor, PSF
Group Holdings or any Significant Subsidiary or for all or substantially all of
the property and assets of the Company, any Subsidiary Guarantor, PSF Group
Holdings or any Significant Subsidiary or (C) the winding up or liquidation of
the affairs of the Company, any Subsidiary Guarantor, PSF Group Holdings or any
Significant Subsidiary and, in each case, such decree or order shall remain
unstayed and in effect for a period of 60 consecutive days;

     (h) the Company, any Subsidiary Guarantor, PSF Group Holdings or any
Significant Subsidiary (A) commences a voluntary case under any applicable
bankruptcy, insolvency or other similar law now or hereafter in effect, or
consents to the entry of an order for relief in an involuntary case under any
such law, (B) consents to the appointment of or taking possession by a receiver,
liquidator, assignee, custodian, trustee, sequestrator or similar official of
the Company, any Subsidiary Guarantor, PSF Group Holdings or any Significant
Subsidiary or for all or substantially all of the property and assets of the
Company, any Subsidiary Guarantor, PSF Group Holdings or any Significant
Subsidiary or (C) effects any general assignment for the benefit of creditors;
or

     (i) any Guarantor repudiates its obligations under its Note Guarantee or,
except as permitted by this Indenture, any Note Guarantee is determined to be
unenforceable or invalid or shall for any reason cease to be in full force and
effect.

          SECTION 3.01. Amendment and Ratification. This Second Supplemental
Indenture shall be construed as an amendment and supplement to the Indenture and
shall form a part thereof, and the Indenture as modified hereby is ratified,
approved and confirmed.

          SECTION 4.01. Trustee Not Responsible. All recitations or recitals
contained in this Second Supplemental Indenture are made by and on behalf of the
Company and the Guarantors only, and the Trustee is in no way responsible for
the correctness of any statement herein contained or for the validity or
sufficiency of this Second Supplemental Indenture. The execution by the Trustee
of this Second Supplemental Indenture shall not be construed to be an approval
or disapproval by the Trustee of the advisability of the action being taken
herein by the Company and the Guarantors. All the provisions of the Indenture
with respect to the rights, privileges, immunities, powers and duties of the
Trustee shall be applicable in respect hereof as fully and with like effect as
if set forth herein in full with such omissions, variations or insertions, if
any, as may be appropriate to make the same conform to this Second Supplemental
Indenture.

          SECTION 5.01. Governing Law. This Second Supplemental Indenture shall
be governed by the laws of the State of New York.

          SECTION 6.01. Duplicate Originals. The parties may sign any number of
copies of this Second Supplemental Indenture. Each signed copy shall be an
original, but all of them together represent the same agreement.

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SIGNATURES

          IN WITNESS WHEREOF, the parties hereto have caused this Second
Supplemental Indenture to be duly executed, all as of the date first written
above.

              PREMIUM STANDARD FARMS, INC.
 
       
 
       

  By:   /s/ Stephen A. Lightstone

       

            Stephen A. Lightstone
      Executive Vice President, Chief Financial
      Officer and Treasurer
 
            PREMIUM STANDARD FARMS OF
NORTH CAROLINA, INC.
 
       
 
       

  By:   /s/ Stephen A. Lightstone

       

            Stephen A. Lightstone
      Executive Vice President, Chief Financial
      Officer and Treasurer
 
            LUNDY INTERNATIONAL, INC.
 
       
 
       

  By:   /s/ Stephen A. Lightstone

       

            Stephen A. Lightstone
      Executive Vice President, Chief Financial
      Officer and Treasurer
 
            LPC TRANSPORT, INC.
 
       
 
       

  By:   /s/ Stephen A. Lightstone

       

            Stephen A. Lightstone
      Executive Vice President, Chief Financial
      Officer and Treasurer
 
            PSF GROUP HOLDINGS, INC.
 
       
 
       

  By:   /s/ Stephen A. Lightstone

       

            Stephen A. Lightstone
      Executive Vice President, Chief Financial
      Officer and Treasurer

 

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              WILMINGTON TRUST COMPANY, as Trustee
 
       
 
       

  By:   /s/ Kristin F. Long

       

  Name:         Kristin F. Long

  Title:         Financial Services Officer