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EXECUTION COPY

 
Exhibit 10.42
 
AMENDMENT No. 1
 
Dated as of October 10, 2008
 
to
 
AMENDED AND RESTATED RECEIVABLES PURCHASE AGREEMENT
 
Dated as of September 26, 2008
 
This AMENDMENT NO. 1 (this “Amendment”) dated as of October 10, 2008 is entered
into among PILGRIM’S PRIDE FUNDING CORPORATION (“Seller”), PILGRIM’S PRIDE
CORPORATION (“Pilgrim’s Pride”) as initial Servicer, THE VARIOUS PURCHASERS AND
PURCHASER AGENTS FROM TIME TO TIME PARTY THERETO and BMO CAPITAL MARKETS CORP.,
as administrator (in such capacity, together with its successors and assigns,
the “Administrator”).
 
RECITALS
 
WHEREAS, the parties hereto have entered into a certain Amended and Restated
Receivables Purchase Agreement dated as of September 26, 2008 (the “Agreement”);
 
WHEREAS, in order to make the most efficient use of the financing facility
contemplated by the Agreement and the other Transaction Documents, the Seller
has requested the Purchaser and the Administrator to agree to certain amendments
and/or modifications to such facility as described herein for various purposes;
 
WHEREAS, the Purchaser and the Administrator are willing to agree to such
amendments solely on the terms and subject to the conditions set forth herein;
 
NOW, THEREFORE, in consideration of the promises and the mutual agreements
contained herein and in the Agreement, the parties hereto agree as follows:
 
SECTION 1. Definitions.  All capitalized terms used, but not otherwise defined,
herein shall  have the respective meanings for such terms set forth in Exhibit I
to the Agreement.
 
SECTION 2. Amendments to the Agreement.  The Agreement is hereby amended as
follows:
 
2.1. The definition of “Loss Percentage” set forth in Exhibit I to the Agreement
is hereby amended and restated in its entirety as follows:
 
       “Loss Percentage” means, on any date, (a) solely during the Waiver
Period, the greatest of (i) 4 times the sum of (x) the highest average of the
Default Ratios for any three consecutive calendar months during the twelve most
recent calendar months, plus (y) the greater of (1) the highest average of the
Dilution Ratios for any three consecutive calendar months during the twelve most
recent calendar months and (2) 1.75%, (ii) 3.5 times the quotient (expressed as
a percentage) of (x) the aggregate Outstanding Balance of the Eligible
Receivables then included in the Net Receivable Pool Balance of the
non-Investment Grade Obligor with the greatest amount of Receivables included in
the Net Receivables Pool Balance divided by (y) Net Receivables Pool Balance on
such date, and (iii) 12%; and
 
       (b)           at all times following the expiration of the Waiver Period,
the greatest of (i) 5 times the sum of (x) the highest average of the Default
Ratios for any three consecutive calendar months during the twelve most recent
calendar months, plus (y) the greater of (1) the highest average of the Dilution
Ratios for any three consecutive calendar months during the twelve most recent
calendar months and (2) 2.25%, (ii) 4 times the quotient (expressed as a
percentage) of (x) the aggregate Outstanding Balance of the Eligible Receivables
then included in the Net Receivable Pool Balance of the non-Investment Grade
Obligor with the greatest amount of Receivables included in the Net Receivables
Pool Balance divided by (y) Net Receivables Pool Balance on such date, and (iii)
18%.
 
 
     2.2.  The definition of “Normal Concentration Percentage” set forth in
Exhibit I to the Agreement is hereby amended and restated in its entirety as
follows:
 
    “Normal Concentration Percentage” means, at any time, (1) solely during the
Waiver Period (a) for any Obligor that is not a Special Obligor or Wal-Mart, 3%;
(b) for any Obligor that is a Special Obligor, (i) if such Special Obligor is
rated A+ or better by S&P and A1 or better by Moody’s, 12% or (ii) if such
Special Obligor is not so rated but is rated at least BBB- by S&P and Baa3 by
Moody’s, 6%; or (c) for any Obligor that is Wal-Mart, (i) if Wal-Mart is rated
AA or better by S&P and Aa2 or better by Moody’s, 18%, or (ii) if Wal-Mart is
not so rated but is rated at least AA- by S&P and Aa3 by Moody’s, 15% or (iii)
if Wal-Mart is rated A+ or lower by S&P and A1 or lower by Moody’s, the
applicable percentage shall be as set forth for Obligors and Special Obligors in
this definition.  If the ratings from S&P and Moody’s fall within different
categories, the Normal Concentration Percentage shall be based on the category
in which the lower of the two ratings falls.  If any Obligor is rated only by
S&P or only by Moody’s, the Normal Concentration Percentage shall be based on
the rating by such Rating Agency without regard to a rating by any other Rating
Agency; and
 
    (2) at all times following the expiration of the Waiver Period (a) for any
Obligor that is not a Special Obligor, 3%; or (b) for any Obligor that is a
Special Obligor, (i) if such Special Obligor is rated A+ or better by S&P and A1
or better by Moody’s, 12% or (ii) if such Special Obligor is not so rated but is
rated at least BBB- by S&P and Baa3 by Moody’s, 6%.  If the ratings from S&P and
Moody’s fall within different categories, the Normal Concentration Percentage
shall be based on the category in which the lower of the two ratings falls.  If
any Obligor is rated only by S&P or only by Moody’s, the Normal Concentration
Percentage shall be based on the rating by such Rating Agency without regard to
a rating by any other Rating Agency.
 
    2.3. The definition of “Net Receivables Pool Balance” set forth in Exhibit I
to the Agreement is hereby amended by inserting, immediately prior to the period
at the end of such definition, the following proviso:
 
; provided, that, for purposes of calculating the Outstanding Balance of each
such Eligible Receivable then in the Receivables Pool, to the extent that the
Outstanding Balance of such Receivable has been reduced by the Servicer by
application of payments on account of such Receivable deposited to the Lock-Box
Accounts, Collection Account and/or Liquidation Account but not yet available
funds, the Outstanding Balance of such Receivable shall be deemed increased
solely to the extent of such payments until such time as such payments become
available funds.
 
    2.4. The definition of “NRB” set forth in the definition of “Participation”
set forth in Exhibit I to the Agreement is hereby amended in its entirety as
follows:
 
NRB=the Net Receivables Pool Balance at the time of computation.
 
    2.5. Exhibit I to the Agreement is hereby amended by adding the following
new definition thereto in the appropriate alphabetical order:
 
    “PPC Limited Duration Waiver Agreement” means the Pilgrim’s Pride
Corporation Limited Duration Waiver Agreement, dated as of September 26, 2008,
among Pilgrims Pride Corporation, Pilgrim’s Pride Funding Corporation, the
various purchasers and purchaser agents from time to time party thereto and BMO
Capital Markets Corp.
 
    “Waiver Period” has the meaning set forth in the PPC Limited Duration Waiver
Agreement.
 
    “Wal-Mart” means Wal-Mart Stores, Inc., a Delaware corporation, and its
subsidiaries.

SECTION 3. Representations and Warranties.  Each of the Seller and the Servicer
hereby represents and warrants to the Purchaser and the Administrator that the
representations and warranties of such Person contained in Exhibit III to the
Agreement are true and correct as of the date hereof (unless stated to relate
solely to an earlier date, in which case such representations and warranties
were true and correct as of such earlier date), and that as of the date hereof,
no Termination Event or Unmatured Termination Event has occurred and is
continuing or will result from this Amendment.
 
SECTION 4. Effect of Amendment.  (a) All provisions of the Agreement, as
expressly amended and modified by this Amendment, shall remain in full force and
effect and are hereby ratified and confirmed in all respects.  After this
Amendment becomes effective, all references in the Agreement (or in any other
Transaction Document) to “this Agreement”, “hereof”, “herein” or words of
similar effect referring to the Agreement shall be deemed to be references to
the Agreement as amended by this Amendment.  This Amendment shall not be deemed,
either expressly or impliedly, to waive, amend or supplement any provision of
the Agreement other than as set forth herein.
 
(b) Notwithstanding anything in the Agreement or any other Transaction Document
to the contrary, each of the parties hereto, hereby consents and agrees to the
amendments contemplated hereby and that all of the provisions in the Agreement,
the Purchase and Contribution Agreement, the Purchase Agreement and the other
Transaction Documents shall be interpreted so as to give effect to the intent of
the parties hereto as set forth in this Amendment.
 
SECTION 5. Effectiveness.  This Amendment shall become effective as of the date
hereof upon receipt by the Administrator of the following (each, in form and
substance satisfactory to the Administrator):
 
(a) Counterparts of this Amendment executed by each of the parties hereto
(including facsimile or electronic copies);
 
(b) (i) Evidence, in form and substance satisfactory to the Administrator that
the Seller and the Servicer have complied with the Administrator’s request (as
described in its letter to the Seller and the Servicer with respect thereto
delivered on October 9, 2008) to provide the Administrator with a daily
Collateral Report and to direct Collections to the Administrator or an account
designated by the Administrator on a daily basis and (ii) a signed copy of an
account control agreement, in form and substance satisfactory to the
Administrator, covering each of the Lock-Box Accounts at Bank of America, N.A.;
 
(c) Evidence, in form and substance satisfactory to the Administrator, that any
requirement for there to be undrawn commitments under either or both of the BMO
Credit Agreement and the CoBank Credit Agreement, be reduced to an aggregate
amount of not greater than $75,000,000; and
 
(d) Such other documents, resolutions, certificates, agreements and opinions as
the Administrator may reasonably request in connection herewith.
 
For purposes of this Section 5, (a) “BMO Credit Agreement”, means the Fourth
Amended and Restated Credit Agreement dated as of February 8, 2007 among Pilgrim
Pride Corporation , To-Ricos, Ltd and To-Ricos Distribution Ltd, the various
banks party thereto and Bank of Montreal as agent (as amended, supplemented or
otherwise modified from time to time) and (b) “CoBank Credit Agreement” means,
the Amended and Restated Credit Agreement dated as of September 21, 2006, among
Pilgrims Pride Funding Corporation, CoBank, ACB, Farm Credit Services of
America, FLCA and the various other parties thereof (as amended, supplemented or
otherwise modified from time to time).
 
SECTION 6. Additional Covenant.  The Company and the Servicer hereby covenant
and agree that, if any upfront fees are paid to the agents, or if pricing or
other fees are otherwise increased, under the BMO Credit Agreement or the CoBank
Credit Agreement in connection with any amendments thereto during the Waiver
Period, the Company (or the Servicer on its behalf) shall (a) in the case of any
upfront fees, pay to the Administrator, within one Business Day of any payment
of fees under any amendments to the BMO Credit Agreement or the CoBank Credit
Agreement, a corresponding fee to the Administrator (calculated by converting
any such fee under the amendments to the BMO Credit Agreement or the CoBank
Credit Agreement into an equivalent rate based on the relative commitments
thereunder and multiplying such equivalent rate by the Commitment) and (b) in
the case of increased pricing or other fees, as soon as practicable thereafter
amend the Agreement or Purchaser Group Fee Letter or execute such other
documents as may be requested by the Administrator, in form and substance
satisfactory to the Administrator, to reflect increased pricing or other fees on
similarly favorable terms.
 
SECTION 7. RELEASE. FOR VALUE RECEIVED, INCLUDING WITHOUT LIMITATION, THE
AGREEMENTS OF THE ADMINISTRATOR AND THE PURCHASERS IN THIS AMENDMENT AND THE
AGREEMENT AS AMENDED HEREBY, EACH OF THE SELLER AND THE SERVICER HEREBY RELEASES
THE ADMINISTRATOR, EACH PURCHASER AGENT, EACH PURCHASER, EACH INDEMNIFIED PARTY
AND THEIR RESPECTIVE CURRENT AND FORMER SHAREHOLDERS, DIRECTORS, OFFICERS,
AGENTS, EMPLOYEES, ATTORNEYS, CONSULTANTS, AND PROFESSIONAL ADVISORS
(COLLECTIVELY, THE “RELEASED PARTIES”) OF AND FROM ANY AND ALL DEMANDS, ACTIONS,
CAUSES OF ACTION, SUITS, CONTROVERSIES, ACTS AND OMISSIONS, LIABILITIES, AND
OTHER CLAIMS OF EVERY KIND OR NATURE WHATSOEVER, BOTH IN LAW AND IN EQUITY,
KNOWN OR UNKNOWN, WHICH SUCH SELLER OR SERVICER HAS OR EVER HAD AGAINST THE
RELEASED PARTIES FROM THE BEGINNING OF THE WORLD TO THIS DATE ARISING IN ANY WAY
OUT OF THE EXISTING FINANCING ARRANGEMENTS BETWEEN THE SELLER, THE SERVICER, THE
ADMINISTRATOR, THE PURCHASER AGENTS AND THE PURCHASERS, AND EACH OF THE SELLER
AND THE SERVICER FURTHER ACKNOWLEDGES THAT, AS OF THE DATE HEREOF, IT DOES NOT
HAVE ANY COUNTERCLAIM, SET-OFF, OR DEFENSE AGAINST THE RELEASED PARTIES, EACH OF
WHICH EACH OF THE SELLER AND THE SERVICER HEREBY EXPRESSLY WAIVES.
 
SECTION 8. Counterparts.  This Amendment may be executed in any number of
counterparts and by different parties on separate counterparts, each of which
when so executed shall be deemed to be an original and all of which when taken
together shall constitute but one and the same instrument.
 
SECTION 9. Governing Law.  This Amendment, including the rights and duties of
the parties hereto, shall be governed by, and construed in accordance with, the
laws of the State of Texas (without giving effect to the conflict of laws
principles thereof).
 
SECTION 10. Section Headings.  The various headings of this Amendment are
included for convenience only and shall not affect the meaning or interpretation
of this Amendment, the Agreement or any provision hereof or thereof.
 
SECTION 11. JURY TRIAL.  THE JURY TRIAL WAIVER SET FORTH IN SECTION 6.10 OF THE
AGREEMENT SHALL APPLY TO THIS AMENDMENT AS IF IT WERE FULLY SET FORTH HEREIN.
 
 
 

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5225406 98442494
 
 

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IN WITNESS WHEREOF, the parties have caused this Amendment to be executed by
their respective officers thereunto duly authorized as of the date first above
written.
 
PILGRIM’S PRIDE FUNDING CORPORATION,
as Seller

By: /s/ Richard A. Cogdill
Richard A. Cogdill
Chief Financial Officer, Secretary and Treasurer

PILGRIM’S PRIDE CORPORATION,
as initial Servicer

By: /s/ Richard A. Cogdill
Richard A. Cogdill
Chief Financial Officer, Secretary and Treasurer

FAIRWAY FINANCE COMPANY, LLC,
as Uncommitted Purchaser and as Related Committed Purchaser for the BMOCM
Purchaser Group

By: /s/ Phillip A. Martone
Name: Phillip A. Martone
Title:   Vice President

BMO CAPITAL MARKETS CORP.,
as Administrator and as Purchaser Agent for the BMOCM Purchaser Group

By:    /s/ Brian Zaban
Name: Brian Zaban
Title:   Managing Director

 

 
S-
Amendment No. 1 to A&R RPA

5225406 98442494
 
 

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