EXHIBIT 10.1

 
Pilgrim’s Pride Corporation
 
Third Amendment To Amended and Restated Post-Petition Credit Agreement
 
This Third Amendment to Amended and Restated Post-Petition Credit Agreement
(herein, the “Amendment”) is entered into as of July 15, 2009, among Pilgrim’s
Pride Corporation, a Delaware corporation (the “Borrower”), as debtor and
debtor-in-possession in a case pending under Chapter 11 of the Bankruptcy Code,
the direct and indirect Domestic Subsidiaries of the Borrower party to this
Amendment and To-Ricos, Ltd., a Bermuda company (“To-Ricos”) and To-Ricos
Distribution, Ltd., a Bermuda company (“To-Ricos Distribution”), as Guarantors,
each as debtor and debtor-in-possession in a case pending under Chapter 11 of
the Bankruptcy Code, the Lenders party hereto, and Bank of Montreal, a Canadian
chartered bank acting through its Chicago branch,  as DIP Agent for the Lenders.
 
Preliminary Statements
 
A.The Borrower, the Guarantors from time to time parties thereto, the Lenders
and the DIP Agent are parties to that certain Amended and Restated Post-Petition
Credit Agreement dated as of December 31, 2008, as heretofore amended (the
“Credit Agreement”).  All capitalized terms used herein without definition shall
have the same meanings herein as such terms have in the Credit Agreement.
 
B.The Borrower and the Required Lenders have agreed to amend the Credit
Agreement on the terms and conditions set forth in this Amendment.
 
Now, Therefore, for good and valuable consideration, the receipt and sufficiency
of which is hereby acknowledged, the parties hereto agree as follows:
 
 
Section 1.Amendments To Credit Agreement.

 
Upon satisfaction of all of the conditions precedent specified in Section 2
hereof the Credit Agreement shall be amended as follows:
 
Section 1.1.Section 4.3 of the Credit Agreement shall be amended by adding the
following sentence thereto as the last sentence thereof:
 
“The Collection Accounts may consist of deposit accounts maintained by the
Debtors with the DIP Agent or any affiliate thereof that are fully insured by
the Federal Deposit Insurance Corporation, Pledged Deposit Accounts and Pledged
Government Securities Accounts.”
 
Section 1.2.Section 4.4(a) of the Credit Agreement shall be amended by adding
the following sentence thereto as the last sentence thereof:
 
“The Cash Collateral Accounts may consist of deposit accounts maintained by the
Debtors with the DIP Agent or any affiliates thereof that are fully insured by
the Federal Deposit Insurance Corporation, Pledged Deposit Accounts and Pledged
Government Securities Accounts.”
 
Section 1.3.Section 5.1 of the Credit Agreement shall be amended by adding the
following definitions thereto in alphabetical order:
 
“Customer Hedging Contracts” commodity hedging arrangements entered into at the
request or direction of a customer or with the prior written approval of the
Required Lenders in each case with financial institutions or on a recognized
commodity exchange in connection with bona fide hedging activities in the
ordinary course of business and not for speculative purposes.
 
“Permitted Hedging Contracts” means any forward contract, futures contract,
options contract and other similar agreements relating to feed ingredients used
by the Borrower and its Subsidiaries in their business (other than Customer
Hedging Contracts) that satisfies each of the following requirements: (a) it is
traded on a recognized commodity exchange, (b) it is held in a commodity account
maintained by the Borrower with a futures commission merchant that is a Lender,
an Affiliate of a Lender or a commodities broker or financial institution
reasonably acceptable to the DIP Agent in each case that is subject to a
commodity account control agreement satisfactory in form and substance to the
DIP Agent among the Borrower, such futures commission merchant and the DIP
Agent, (c) the expiration date of such contract is no later than the later of
(i) March 21, 2010, or (ii) such later date as the DIP Agent shall agree in
writing, (d) on the trade date of such contract, the Borrower and its
Subsidiaries do not have open  forward, futures or options positions in the
subject commodity (excluding open positions under Customer Hedging Contracts) in
excess of fifty percent (50%) of the Borrower's expected usage of such commodity
in the ordinary course of business of the Borrower and its Subsidiaries for the
period beginning on such trade date and ending on the expiration date of such
contract, (e) it has been approved in accordance with the Borrower's commodity
price risk management guidelines, and (f) it is entered into in the ordinary
course of business to protect the Borrower and its Subsidiaries against
fluctuations in the price of such feed ingredients and not for speculative
purposes.
 
“Pledged Deposit Account” means an interest bearing deposit account that (a) is
maintained by the Borrower with an institution located in the United States of
America that is acceptable to the DIP Agent, (b) is fully insured by the Federal
Deposit Insurance Corporation without limit as to the amount of such insurance,
and (c) is subject to the terms of a deposit account control agreement
satisfactory in form and substance to the DIP Agent among the Borrower, the DIP
Agent and such institution.
 
“Pledged Government Securities Account” means a securities account that (a) is
maintained by the Borrower with the DIP Agent, an affiliate of the DIP Agent or
a securities intermediary located in the United States of America that is
acceptable to the DIP Agent, (b) is subject to a securities account control
agreement satisfactory in form and substance to the DIP Agent among the DIP
Agent, the Borrower and the securities intermediary, and (c) contains no
investments except investments permitted by Section 8.9(a) and (b) hereof.
 
Section 1.4.Section 8.5 of the Credit Agreement shall be amended by replacing
the period appearing at the end of subsection (p) thereof with “; and” and by
adding the following provision thereto as subsection (q) thereof:
 
(q)on Friday of each week, commencing August 14, 2009, a position report showing
in reasonable detail, as of last day of the preceding week, the amount of each
commodity that is subject to a Permitted Hedging Contract, the latest expiration
date of all Permitted Hedging Contracts then outstanding, the percentage of the
Borrower's expected usage of each feed ingredient in the ordinary course of
business of the Borrower and its Subsidiaries subject to open positions under
such contracts during the period beginning on such date and ending on the latest
expiration date of all Permitted Hedging Contracts then outstanding, and the
aggregate amount of all margin provided or required to be provided to futures
commission merchants with respect to such Permitted Hedging Contracts, certified
by chief financial officer or chief restructuring officer of the Borrower or
another officer of the Borrower acceptable to the DIP Agent.
 
Section 1.5.Section 8.8 of the Credit Agreement shall be amended  by replacing
the period appearing at the end of subsection (z) thereof with “; and” and by
adding the following provision thereto as subsection (aa) thereof:
 
(aa)Liens on Permitted Hedging Contracts, all margin provided or required to be
provided by the Borrower or its Subsidiaries with respect to Permitted Hedging
Contracts, all of the Borrower’s or its Subsidiaries’ rights relating thereto
and all proceeds thereof granted to the futures commission merchant with which
such Permitted Hedging Contracts are maintained to secure the Borrower’s
obligations with respect to such Permitted Hedging Contracts, which Liens shall
be prior to the Lien of the DIP Agent therein.
 
Section 1.6.Section 8.25 of the Credit Agreement shall be amended to read as
follows:
 
Section 8.25Restriction on Hedging.  The Borrower shall not, and shall not
permit any of its Subsidiaries to, directly or indirectly enter into any
interest rate, foreign currency or commodity hedging agreements or arrangements
other than (a) Customer Hedging Contracts and (b) Permitted Hedging Contracts;
provided that the aggregate amount of all margin required to be provided by the
Borrower with respect to all Permitted Hedging Contracts shall not exceed
$100,000,000 at any time.
 
Section 1.7.The Borrower and the Lenders agree that the DIP Commitments are
hereby permanently reduced by $100,000,000, which reduction shall reduce each
Lender’s DIP Commitment ratably in accordance with its Percentage of such
reduction amount.
 
 
Section 2.Conditions Precedent.

 
The effectiveness of this Amendment is subject to the satisfaction of all of the
following conditions precedent:
 
Section 2.1.The Borrower, the Guarantors and the Required Lenders shall have
executed and delivered this Amendment.
 
Section 2.2.Each of the representations and warranties set forth in Section 6 of
the Credit Agreement shall be true and correct in all material respects, except
to the extent the same expressly relate to an earlier date in which case they
shall remain true and correct in all material respects as of such earlier date.
 
Section 2.3.The Borrower shall be in full compliance with all of the terms and
conditions of the Credit Agreement and no Event of Default or Default shall have
occurred and be continuing thereunder or shall result after giving effect to
this Amendment.
 
Section 2.4.The Bankruptcy Court shall have entered an order authorizing the
execution and delivery of this Amendment.
 
 
Section 3.Representations And Warranties.

 
Section 3.1.The Borrower, by its execution of this Amendment, hereby certifies
and warrants the following:
 
(a)each of the representations and warranties set forth in Section 6 of the
Credit Agreement is true and correct in all material respects as of the date
hereof, except to the extent the same expressly relate to an earlier date in
which case they shall remain true and correct in all material respects as of
such earlier date; and
 
(b)the Borrower is in full compliance with all of the terms and conditions of
the Credit Agreement and no Event of Default or Default has occurred and is
continuing thereunder.
 
 
Section 4.Miscellaneous.

 
Section 4.1.Except as specifically amended herein the Credit Agreement shall
continue in full force and effect.  Reference to this specific Amendment need
not be made in any note, documents, 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.
 
Section 4.2.As an additional inducement to and in consideration of the Lenders’
acceptance of this Amendment each of the Guarantors hereby acknowledges the
execution of the foregoing Amendment by the Borrower and agrees that this
acknowledgement is not required under the terms of the Guaranty and that the
execution hereof by the Guarantors shall not be construed to require the Lenders
to obtain their acknowledgement or consent to any future amendment, modification
or waiver of any term of the Credit Agreement except as otherwise provided in
the Guaranty.  Each of the Guarantors hereby agree that the Guaranty shall apply
to all indebtedness, obligations and liabilities of the Borrower and the
Guarantors to the Lenders under the Credit Agreement as amended by this
Amendment.  Each Guarantor further acknowledges and agrees that the Guaranty
shall be and remain in full force and effect.
 
Section 4.3.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.
 
[Signature pages to follow]

 
 

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This Third Amendment to Amended and Restated Post-Petition Credit Agreement is
entered into as of the date and year first above written.

 
“Borrower”
 
Pilgrim’s Pride Corporation, as debtor and debtor-in-possession
 
By/s/ Richard A. Cogdill

Name:  Richard A. Cogdill
Title:  Chief Financial Officer
 
“Guarantors”
 
PFS Distribution Company, as debtor and debtor-in-possession
 
By/s/ Richard A. Cogdill

Name:  Richard A. Cogdill
Title:  Chief Financial Officer
 
PPC Transportation Company, as debtor and debtor-in-possession
 
By/s/ Richard A. Cogdill

Name:  Richard A. Cogdill
Title:  Chief Financial Officer
 
Pilgrim’s Pride Corporation of West Virginia, Inc., as debtor and
debtor-in-possession
 
By/s/ Richard A. Cogdill

Name:  Richard A. Cogdill
Title:  Chief Financial Officer
 

 
PPC Marketing, Ltd., as debtor and debtor-in-possession
 
By/s/ Richard A. Cogdill

Name:  Richard A. Cogdill
Title:  Chief Financial Officer

 
To-Ricos, Ltd., as debtor and debtor-in-possession
 
By/s/ Richard A. Cogdill

Name:  Richard A. Cogdill
Title:  Chief Financial Officer

 
To-Ricos Distribution, Ltd., as debtor and debtor-in-possession
 
By/s/ Richard A. Cogdill

Name:  Richard A. Cogdill
Title:  Chief Financial Officer

Pilgrim’s Pride Corporation
Signature Page to Third Amendment to Amended and Restated Post-Petition Credit
Agreement
 
 

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“DIP Agent, Swing Line Lender and L/C Issuer”
 
Bank of Montreal, as a Lender, Swing Line Lender, L/C Issuer and as DIP Agent
 
By/s/ Barry W. Stratton

Barry W. Stratton
Managing Director

Pilgrim’s Pride Corporation
Signature Page to Third Amendment to Amended and Restated Post-Petition Credit
Agreement
 
 

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“Lenders”
 
Cooperatieve Centrale Raiffeisen-Boerenleenbank B.A. “Rabobank Nederland” New
York Branch
 
By/s/ Brett Delfino
Its Executive Director
 
By/s/ John McMahon
Its Managing Director
 
U.S. Bank National Association
 
By/s/ Dale L. Welke
Its: Vice President
 
Wells Fargo Bank National Association
 
By/s/ Roger Fruendt
Its Senior Vice President
 
ING Capital LLC
 
By/s/ Lina A. Garcia
Its Director
 
CALYON New York Branch
 
By/s/ Mark Koneval
Its Managing Director
 
By/s/ Alan Sidrane
Its Managing Director
 

 
Natixis New York Branch
 
By/s/ Alisa Trani
Its Associate Director
 
By/s/ Stephen A. Jendras
Its Managing Director
 
SunTrust Bank
 
By/s/ Janet R. Naifeh
Its Senior Vice President
 
First National Bank of Omaha
 
By
Its

 

 

Pilgrim’s Pride Corporation
Signature Page to Third Amendment to Amended and Restated Post-Petition Credit
Agreement
 
 

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