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EXHIBIT 10.2
 

Pilgrim’s Pride Corporation
Second Amendment to Fourth Amended and Restated Secured Credit Agreement
 
This Second Amendment to Fourth Amended and Restated Secured Credit Agreement
(herein, the “Amendment”) is entered into as of April 30, 2008, among Pilgrim’s
Pride Corporation, a Delaware corporation (the “Company”), To-Ricos, Ltd., a
Bermuda company (“To-Ricos”), To-Ricos Distribution, Ltd., a Bermuda company
(“To-Ricos Distribution”; and together with To-Ricos, the “Foreign Borrowers”;
the Company and the Foreign Borrowers collectively, the “Borrowers” and
individually, a “Borrower”), the Banks party hereto, and Bank of Montreal
a Canadian chartered bank acting through its Chicago branch, as administrative
agent for the Banks (the “Agent”).
 
Preliminary Statements
 
A.The Borrowers, the Banks and the Agent are parties to that certain Fourth
Amended and Restated Secured Credit Agreement dated as of February 8, 2007, as
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 Borrowers and the Banks have agreed to limit the amount of L/Cs that can
be outstanding under the Revolving Credit at any time and to amend the
definition of the term “Applicable Margin” contained in Section 4.1 of the
Credit Agreement and the financial covenants contained in the Credit Agreement,
all 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:
 
 
1.Amendments.

 
Upon satisfaction of all of the applicable conditions precedent set forth in
Section 2 hereof, the Credit Agreement shall be amended as follows:
 
1.1.The third sentence of Section 1.5(a) of the Credit Agreement shall be
amended to read as follows:
 
“The L/Cs shall consist of standby and commercial letters of credit in an
aggregate face amount not to exceed $175,000,000 outstanding at any time
(excluding the amount of the Bond L/C).”
 
1.2.Section 4.1 of the Credit Agreement shall be amended by adding the following
definition thereto in the appropriate alphabetical order:
 
“Second Amendment Effective Date” means May 1, 2008.”
 
1.3.The definition of the term “Applicable Margin” contained in Section 4.1 of
the Credit Agreement shall be amended to read as follows:
 
“Applicable Margin” shall mean, (a) during the period commencing on the Second
Amendment Effective Date and ending on the date the Agent determines the
Applicable Margins based on the Company’s financial statements for its fiscal
quarter ending September 26, 2009 (the “Pricing Increase Termination Date”),
with respect to each type of Loan and the commitment fee described in Column A
below, the rate of interest per annum shown in Columns B, C, D, E, F and G below
for the range of Leverage Ratio (expressed as a percentage) specified for each
Column:
A
B
C
D
E
F
G
 
Level I
Level II
Level III
Level IV
Level V
Level VI
Leverage Ratio
<=45%
>45%<=
50%
>50%<=
55%
>55%<=
60%
>60%<=
65%
>65%
Domestic Rate Loans
0.50%
0.50%
0.50%
0.50%
0.50%
0.50%
Eurodollar Loans
1.25%
1.50%
1.75%
2.00%
2.25%
2.75%
Commitment Fee
0.25%
0.30%
0.35%
0.40%
0.45%
0.50%

 
and (b) from and after the Pricing Increase Termination Date, with respect to
each type of Loan and the commitment fee described in Column A below, the rate
of interest per annum shown in Columns B, C, D, E and F below for the range of
Leverage Ratio (expressed as a percentage) specified for each Column:
A
B
C
D
E
F
 
Level I
Level II
Level III
Level IV
Level V
Leverage Ratio
<=45%
>45%<=
50%
>50%<=
55%
>55%<=
60%
>60%
Domestic Rate Loans
0.0%
0.0%
0.0%
0.0%
0.0%
Eurodollar Loans
0.75%
1.00%
1.25%
1.50%
1.75%
Commitment Fee
0.175%
0.225%
0.275%
0.325%
0.35%

 
Not later than 5 Business Days after receipt by the Agent of the financial
statements called for by Section 7.4 hereof for the applicable fiscal quarter,
the Agent shall determine the Leverage Ratio for the applicable period and shall
promptly notify the Company and the Banks of such determination and of any
change in the Applicable Margins resulting therefrom.  Any such change in the
Applicable Margins shall be effective as of the date the Agent so notifies the
Company and the Banks with respect to all Loans outstanding on such date, and
such new Applicable Margins shall continue in effect until the effective date of
the next quarterly redetermination in accordance with this Section.  Each
determination of the Leverage Ratio and Applicable Margins by the Agent in
accordance with this Section shall be conclusive and binding on the Company and
the Banks absent manifest error.  From the date hereof until the Applicable
Margins are first adjusted pursuant hereto, the Applicable Margins shall be
those set forth in Level IV above.
 
1.4.Sections 7.8, 7.9, 7.11 and 7.12 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) 0.70 to 1 at any time from and after the Second Amendment
Effective Date through September 26, 2009, and (b) 0.65 to 1 at any time
thereafter.
 
Section 7.9.Tangible Net Worth.  The Company shall maintain its Tangible Net
Worth at all times in an amount not less than (a) $250,000,000 from and after
the Second Amendment Effective Date through September 25, 2009,
and (b) $300,000,000 thereafter, which amount shall increase as of the last day
of each Fiscal Year commencing with the Fiscal Year ending October 2, 2010 by an
amount, in each case, equal to 50% of the Company’s Net Income (but not less
than zero) for such Fiscal Year of the Company.
 
Section 7.11.Net Tangible Assets to Total Liabilities. The Company will not
permit the ratio of its Net Tangible Assets to its Total Liabilities at any
time, but measured as of the last day of each quarterly fiscal accounting period
of the Company, to be less than (a) 1.05 to 1 as of the last day of each
quarterly fiscal accounting period of the Company ending after the Second
Amendment Effective Date through and including June 27, 2009, (b) 1.10 to 1 as
of the last day of the quarterly fiscal accounting period of the Company ending
September 26, 2009, and (c) 1.125 to 1 as of the last day of each quarterly
fiscal accounting period of the Company thereafter.
 
Section 7.12.Fixed Charge Coverage Ratio.  The Company will not permit, as of
the last day of each fiscal quarter of the Company, its Fixed Charge Coverage
Ratio for the eight consecutive fiscal quarters of the Company then ended to be
less than (a) 1.25 to 1 as of the last day of each quarterly fiscal accounting
period of the Company ending after the Second Amendment Effective Date through
September 26, 2009, and (b) as of the last day of each quarterly fiscal
accounting period of the Company thereafter, 1.50 to 1.”
 
1.5.Schedule I attached to the form of Compliance Certificate attached to the
Credit Agreement as Exhibit F shall be replaced by Schedule I attached to this
Amendment.
 
1.6.The Company agrees that no later than May 7, 2008, it shall cause the
Guarantor to execute and deliver to the Agent the Guarantor’s Consent set forth
below, and that the Company’s failure to comply with this Section shall
constitute an Event of Default under the Credit Agreement.
 
 
2.Conditions Precedent.

 
The effectiveness of this Amendment is subject to the satisfaction of all of the
following conditions precedent:
 
2.1.The Borrowers and the Required 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 Borrowers 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.The Agent shall have received for the ratable benefit of the Banks executing
this Amendment (the “Consenting Banks”) an amendment fee in an amount equal to
one-quarter of one percent (0.25%) of Revolving Credit Commitment of each of the
Consenting Banks, which amendment fee shall be non-refundable.
 
2.5.The Agent shall have received for its own account such fees as have been
agreed upon by the Company and the Agent.
 
 
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 Borrowers are 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 has heretofore executed and delivered to the Agent that certain
Second Amended and Restated Security Agreement Re:  Inventory and Farm Products
dated as of February 8, 2007 (the “Security Agreement”) and the Company hereby
agrees that the Security Agreement shall continue to secure all of the Company’s
and the Foreign Borrowers’ indebtedness, obligations and liabilities to the
Agent, the L/C Issuers 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.
 
4.2.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.
 
4.3.The Company agrees to pay all reasonable out-of-pocket costs and expenses
incurred by the Agent in connection with the preparation, execution and delivery
of this Amendment and the documents and transactions contemplated hereby,
including the reasonable fees and expenses of Chapman and Cutler LLP.
 
4.4.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.
 
4.5.(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 4.5(b) hereof and to the
extent that the Federal laws of the United States of America may otherwise
apply.
 
(b)Notwithstanding anything in Section 4.5(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.
 
[Signature pages to follow]

DALDMS/638955.3
 
 

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This Second Amendment to Fourth Amended and Restated Secured Credit Agreement is
entered into as of the date and year first above written.
 
 
“Borrowers”

 
 
Pilgrim’s Pride Corporation

 
 
By /s/ Richard A. Cogdill

 
Its Chief Financial Officer

 
 
To-Ricos, Ltd.

 
 
By /s/ Richard A. Cogdill

 
Its Executive Vice President, Treasurer and Assistant Secretary

 
 
To-Ricos Distribution, Ltd.

 
 
By /s/ Richard A. Cogdill

 
Its Executive Vice President, Treasurer and Assistant Secretary

 
Accepted and Agreed to as of the day and year last above written.
 
 
Bank of Montreal, as Agent

 
 
By /s/ David J. Bechstein

 
Its Vice President

 
 
BMO Capital Markets Financing, Inc., individually and as Swing Bank

 
 
By /s/ David J. Bechstein

 
Its Vice President

 
 
SunTrust Bank

 
 
By/s/ M. Gabe Bonfield

 
Its Vice President

 
 
U.S. Bank National Association

 
 
By/s/ illegible

 
Its Vice President

 
 
Wells Fargo Bank National Association

 
 
By/s/ Jeff Mercer

 
Its Vice President

 
 
ING Capital LLC

 
 
By /s/ Lina A. Garcia

 
Its Vice President

 
 
Credit Suisse, Cayman Islands Branch

 
 
By /s/ Karl Studer

 
Its Director

 
 
By /s/ Petra Jaek

 
Its Assistant Vice President

 
 
Bank of America N.A.

 
 
By /s/ Charles Dale

 
Its Senior Vice President

 
 
CALYON New York Branch

 
 
By  /s/ Greg Hennenfent

 
Its Managing Director

 
 
By /s/ Blake Wright

 
Its Managing Director

 
 
Natixis New York Branch

 
 
By /s/ Vincent Lauras

 
Its Managing Director

 
 
By /s/ Stephen A. Jendras

 
Its Managing Director

 
 
JP Morgan Chase Bank, N.A.

 
 
By /s/ Barbara R. Marks

 
Its Executive Director

 
 
Deutsche Bank Trust Company Americas

 
 
By /s/ Scottye Lindsey

 
Its Director

 
 
By /s/ Carin Keegan

Its Director
 
First National Bank of Omaha
 
 
By /s/ Wade Horton

 
Its Vice President

-  -
DALDMS/638955.3
 
 

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