Document:

Unassociated Document

    Exhibit
10.3

       

       

       

       

       

       

       

       

       

       

       

       

      
 

       

      UNIT
CORPORATION

       

      SEPARATION
BENEFIT PLAN

       

      FOR
SENIOR MANAGEMENT

       

       

       

       

       

      As
Amended and Restated

       

      Effective
December 31, 2008

       

       

      
         

        
          
          

        

         

      

      UNIT
CORPORATION

      SEPARATION
BENEFIT PLAN

      FOR
SENIOR MANAGEMENT

       

      INDEX

       

      
        	 
      	
                Page

              
	 
      	 
      
	
                Introduction

              	
                1

              
	 
      	 
      	 
      
	
                ARTICLE
      1. Definitions

              	
                1

              
	 
      	 
      	 
      
	
                1.1

              	
                “Base
      Salary”

              	
                1

              
	
                1.2

              	
                “Beneficiary”

              	
                1

              
	
                1.3

              	
                “Board
      of Directors”

              	
                1

              
	
                1.4

              	
                “Bonus”

              	
                1

              
	
                1.5

              	
                “Change
      in Control”

              	
                1

              
	
                1.6

              	
                “Code”

              	
                3

              
	
                1.7

              	
                “Company”

              	
                3

              
	
                1.8

              	
                “Comparable
      Position”

              	
                3

              
	
                1.9

              	
                “Compensation
      Committee”

              	
                3

              
	
                1.10

              	
                “Completed
      Year of Service”

              	
                3

              
	
                1.11

              	
                “Discharge
      for Cause”

              	
                3

              
	
                1.12

              	
                “Employing
      Company”

              	
                3

              
	
                1.13

              	
                “Erisa”

              	
                4

              
	
                1.14

              	
                “Human
      Resources Director”

              	
                4

              
	
                1.15

              	
                “Participant”

              	
                4

              
	
                1.16

              	
                “Plan”

              	
                4

              
	
                1.17

              	
                “Separation
      Agreement”

              	
                4

              
	
                1.18

              	
                “Separation
      Benefit”

              	
                4

              
	
                1.19

              	
                “Separation
      Period”

              	
                4

              
	
                1.20

              	
                “Separation
      from Service”

              	
                4

              
	
                1.21

              	
                “Specified
      Employee”

              	
                4

              
	
                1.22

              	
                “Years
      of Service”

              	
                4

              
	 
      	 
      	 
      
	
                ARTICLE
      2. Benefits

              	
                4

              
	 
      	 
      	 
      
	
                2.1

              	
                Participants

              	
                4

              
	
                2.2

              	
                Separation
      Benefit

              	
                4

              
	
                2.3

              	
                Eligibility

              	
                5

              
	
                2.4

              	
                Separation
      Benefit Amount

              	
                5

              
	
                2.5

              	
                Separation
      Benefit Limitation

              	
                7

              
	
                2.6

              	
                Withholding
      Tax

              	
                7

              
	
                2.7

              	
                Reemployment
      of a Participant

              	
                7

              
	
                2.8

              	
                Integration
      with Disability Benefits

              	
                7

              
	
                2.9

              	
                Plan
      Benefit Offset

              	
                7

              
	
                2.10

              	
                Recoupment

              	
                8

              
	
                2.11

              	
                Completion
      of Twenty Years of Service

              	
                8

              

      

       

      
        i

      

       

      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  
                                    	
                                            2.12

                                          	
                                            Change
      in Control

                                          	
                                            8

                                          
	 
      	 
      	 
      
	
                                            ARTICLE
      3. Method of Payment

                                          	
                                            8

                                          
	 
      	 
      	 
      
	
                                            3.1

                                          	
                                            Separation
      Benefit Payment

                                          	
                                            8

                                          
	
                                            3.2

                                          	
                                            Protection
      of Business

                                          	
                                            9

                                          
	
                                            3.3

                                          	
                                            Death
      Subsequent to Separation from Service

                                          	
                                            10

                                          
	
                                            3.4

                                          	
                                            Payment
      to Specified Employees Upon Separation from Service

                                          	
                                             
      11

                                          
	 
      	 
      	 
      
	
                                            ARTICLE
      4. Waiver and Release of Claims

                                          	
                                            11

                                          
	 
      	 
      	 
      
	
                                            ARTICLE
      5. Funding

                                          	
                                            11

                                          
	 
      	 
      	 
      
	
                                            ARTICLE
      6. Administration

                                          	
                                            11

                                          
	 
      	 
      	 
      
	
                                            6.1

                                          	
                                            Named
      Fiduciary

                                          	
                                            11

                                          
	
                                            6.2

                                          	
                                            Fiduciary
      Responsibilities

                                          	
                                            12

                                          
	
                                            6.3

                                          	
                                            Specific
      Fiduciary Responsibilities

                                          	
                                            12

                                          
	
                                            6.4

                                          	
                                            Allocations
      and Delegations of Responsibility

                                          	
                                            12

                                          
	
                                            6.5

                                          	
                                            Advisors

                                          	
                                            13

                                          
	
                                            6.6

                                          	
                                            Plan
      Determination

                                          	
                                            13

                                          
	
                                            6.7

                                          	
                                            Modification
      and Termination

                                          	
                                            13

                                          
	
                                            6.8

                                          	
                                            Indemnification

                                          	
                                            13

                                          
	
                                            6.9

                                          	
                                            Successful
      Defense

                                          	
                                            14

                                          
	
                                            6.10

                                          	
                                            Unsuccessful
      Defense

                                          	
                                            14

                                          
	
                                            6.11

                                          	
                                            Advance
      Payments

                                          	
                                            14

                                          
	
                                            6.12

                                          	
                                            Repayment
      of Advance Payments

                                          	
                                            14

                                          
	
                                            6.13

                                          	
                                            Right  of
      Indemnification

                                          	
                                            14

                                          
	 
      	 
      	 
      
	ARTICLE
      7. Effective Date and Plan Year	
                                            15

                                          
	 
      	 
      	 
      
	
                                            ARTICLE
      8. Miscellaneous

                                          	
                                            15

                                          
	 
      	 
      	 
      
	
                                            8.1

                                          	
                                            Assignment

                                          	
                                            15

                                          
	
                                            8.2

                                          	
                                            Governing
      Law

                                          	
                                            15

                                          
	
                                            8.3

                                          	
                                            Employing
      Company Records

                                          	
                                            15

                                          
	
                                            8.4

                                          	
                                            Employment
      Non-Contractual

                                          	
                                            15

                                          
	
                                            8.5

                                          	
                                            Taxes

                                          	
                                            16

                                          
	
                                            8.6

                                          	
                                            Binding
      Effect

                                          	
                                            16

                                          
	
                                            8.7

                                          	
                                            Entire
      Agreement

                                          	
                                            16

                                          
	
                                            8.8

                                          	
                                            Decisions
      and Appeals

                                          	
                                            16

                                          

                                  

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

       

      
        ii

      

       

      UNIT
CORPORATION

      SEPARATION
BENEFIT PLAN

      FOR
SENIOR MANAGEMENT

       

      Introduction

       

      The
purpose of the Unit Corporation Separation Benefit Plan for Senior Management is
to provide certain officers and key executives of Unit Corporation or its
subsidiaries with appropriate assurances of continued income and other benefits
for a reasonable period of time in the event that the individual’s employment
ceases under the circumstances described herein.

       

      The
Compensation Committee shall, in its absolute discretion select the individuals
to be covered by this Plan from time to time.  The Compensation
Committee may notify each selected individual of his or her selection and
provide him or her with a copy of this Plan.

       

      Participation
in the Plan shall not in any respect be deemed to grant Participant either a
right to continued participation in the Plan or a right to continued employment
and employment and participation remains terminable at will by either the
Employing Company or Participant at any time for any reason or for no
reason.

       

      ARTICLE
1.

      Definitions

       

      
        	
                1.1  

              	
                “Base
      Salary” means
      the regular basic cash remuneration before deductions for taxes and other
      items withheld, and without regard to any salary reduction under any plans
      maintained by an Employing Company under Section 401(k) or 125 of the
      Code, payable to a Participant for services rendered to an Employing
      Company, but not including pay for Bonuses, incentive compensation,
      special pay, awards or
commissions.

              

      

       

      
        	
                1.2  

              	
                “Beneficiary”
      means the person designated by a
      Participant in a written instrument filed with the Compensation Committee
      to receive benefits under this
Plan.

              

      

       

      
        	
                1.3  

              	
                “Board
      of Directors” means
      the board of directors of the
Company.

              

      

       

      
        	
                1.4  

              	
                “Bonus”
      means
      any annual incentive compensation paid to a Participant over and above
      Base Salary earned and paid in cash or
  otherwise.

              

      

       

      
        	
                1.5  

              	
                “Change
      in Control” of
      the Company shall be deemed to have occurred as of the first day that any
      one or more of the following conditions shall have been
      satisfied:

              

      

       

      
        	
                (i)  

              	
                On
      the close of business on the tenth day following the time the Company
      learns of the acquisition by any individual entity or group (a “Person”),
      including any “person” within the meaning of Section 13(d)(3) or 14(d)(2)
      of the Exchange Act, of beneficial ownership within the meaning of Rule
      13d-3 promulgated under the Exchange Act, of 15% or more of either (i) the
      then outstanding shares of Common Stock of the Company (the “Outstanding
      Company Common Stock”) or (ii) the combined voting power of the then
      outstanding securities of the Company

              

      

       

      
        1

      

       

      
        	
                 

              	
                entitled
      to vote generally in the election of Directors (the “Outstanding Company
      Voting Securities”); excluding, however, the following: (A) any
      acquisition directly from the Company (excluding any acquisition resulting
      from the exercise of an exercise, conversion or exchange privilege unless
      the security being so exercised, converted or exchanged was acquired
      directly from the Company); (B) any acquisition by the Company; (C) any
      acquisition by an employee benefit plan (or related trust) sponsored or
      maintained by the Company or any corporation controlled by the Company;
      and (D) any acquisition by any corporation pursuant to a transaction which
      complies with clauses (i), (ii) and (iii) of subsection (iii) of this
      definition;

              

      

       

      
        	
                (ii)  

              	
                individuals
      who, as of the date hereof, constitute the Board of Directors (the
      “Incumbent Board”), cease for any reason to constitute at least a majority
      of such Board; provided that any individual who becomes a Director of the
      Company subsequent to the date hereof whose election or nomination for
      election by the Company’s stockholders was approved by the vote of at
      least a majority of the Directors then comprising the Incumbent Board,
      shall be deemed a member of the Incumbent Board; and provided further,
      that any individual who was initially elected as a Director of the Company
      as a result of an actual or threatened election contest, as such terms are
      used in Rule 14a-11 of Regulation 14A promulgated under the Exchange Act,
      or any other actual or threatened solicitation of proxies or consents by
      or on behalf of any Person other than the Board, shall not be deemed a
      member of the Incumbent Board;

              

      

       

      
        	
                (iii)  

              	
                approval
      by the stockholders of the company of a reorganization, merger or
      consolidation or sale or other disposition of all or substantially all of
      the assets of the Company (a “Corporate Transaction”); excluding, however,
      a Corporate Transaction pursuant to which (i) all or substantially all of
      the individuals or entities who are the beneficial owners, respectively,
      of the Outstanding Company Common Stock and the Outstanding Company Voting
      Securities immediately prior to such Corporate Transaction will
      beneficially own, directly or indirectly, more than 70% of, respectively,
      the outstanding shares of common stock, and the combined voting power of
      the outstanding securities of such corporation entitled to vote generally
      in the election of Directors, as the case may be, of the corporation
      resulting from such Corporate Transaction (including, without limitation,
      a corporation which as a result of such transaction owns the Company or
      all or substantially all of the Company’s assets either directly or
      indirectly) in substantially the same proportions relative to each other
      as their ownership, immediately prior to such Corporate Transaction, of
      the Outstanding Company Common stock and the Outstanding Company Voting
      Securities, as the case may be, (ii) no Person (other than: the Company;
      the corporation resulting from such Corporate Transaction; and any Person
      which beneficially owned, immediately prior to such Corporate Transaction,
      directly or indirectly, 25% or more of the Outstanding Company Common
      Stock or the Outstanding Voting Securities, as the case may be) will
      beneficially own, directly or indirectly, 25% or more of, respectively,
      the outstanding shares of common stock of the corporation resulting from
      such Corporate Transaction or the combined voting power of the
      

              

      

       

      
        2

      

       

      
        	
                 

              	
                outstanding
      securities of such corporation entitled to vote generally in the election
      of Directors and (iii) individuals who were members of the Incumbent Board
      will constitute a majority of the members of the Board of Directors of the
      corporation resulting from such Corporate Transaction;
  or

              

      

       

      
        	
                (iv)  

              	
                approval
      by the stockholders of the Company of a plan of complete liquidation or
      dissolution of the Company.

              

      

       

      
        	
                1.6  

              	
                “Code”
      means
      the Internal Revenue Code of 1986, as amended from time to
      time.

              

      

       

      
        	
                1.7  

              	
                “Company”
      means
      Unit Corporation, the sponsor of this
  Plan.

              

      

       

      
        	
                1.8  

              	
                “Comparable
      Position” means
      a job with an Employing Company or successor company at the same or higher
      Base Salary as a Participant’s current job and at a work location within
      reasonable commuting distance from a Participant’s home, as determined by
      the Participant’s Employing
Company.

              

      

       

      
        	
                1.9  

              	
                “Compensation
      Committee” means
      the Compensation Committee established and appointed by the Board of
      Directors.

              

      

       

      
        	
                1.10  

              	
                 “Completed
      Year of Service” means the period of
      time beginning with a Participant’s date of hire or the anniversary of the
      date of hire and ending twelve months
  thereafter.

              

      

       

      
        	
                1.11  

              	
                “Discharge
      for Cause” means
      termination of a Participant’s employment by the Employing Company due
      to:

              

      

       

      
        	
                (i)  

              	
                the
      consistent failure of Participant to perform Participant’s prescribed
      duties to the Employing Company (other than any such failure resulting
      from Participant’s incapacity due to physical or mental
      illness);

              

      

       

      
        	
                (ii)  

              	
                the
      commission by Participant of a wrongful act that caused or was reasonably
      likely to cause damage to the Employing
Company;

              

      

       

      
        	
                (iii)  

              	
                an
      act of gross negligence, fraud, unfair competition, dishonesty or
      misrepresentation in the performance of Participant duties on behalf of
      the Employing Company;

              

      

       

      
        	
                (iv)  

              	
                the
      conviction of or the entry of a plea of nolo contendere by Participant to
      any felony or the conviction of or the entry of a plea of nolo contendere
      to any offense involving dishonesty, breach of trust or moral
      turpitude;

              

      

       

      
        	
                (v)  

              	
                a
      breach of Participant’s fiduciary duty involving personal profit;
      or

              

      

       

      
        	
                (vi)  

              	
                similar
      actions.

              

      

       

      
        	
                1.12  

              	
                “Employing
      Company” with
      respect to a Participant shall mean either the Company or, if applicable,
      the subsidiary of the Company which employs
      Participant.

              

      

       

      
        3

      

       

      
        	
                1.13  

              	
                “ERISA”
      means
      the Employee Retirement Income Security Act of 1974, as from time to time
      amended, and all regulations and rulings issued thereunder by governmental
      administrative bodies.

              

      

       

      
        	
                1.14  

              	
                “Human Resources Director” means the
      Human Resources Director of the
    Company.

              

      

       

      
        	
                1.15  

              	
                “Participant”
      means
      an individual who is designated as such pursuant to Section
      2.1.

              

      

       

      
        	
                1.16  

              	
                “Plan”
      means
      the Unit Corporation Separation Benefit Plan for Senior Management, as set
      forth in this document and as may be amended from time to
      time.

              

      

       

      
        	
                1.17  

              	
                “Separation
      Agreement” means the
      agreement between an Employee and the Employing Company in which the
      Participant waives and releases the Company, Employing Company and other
      potentially related parties from certain claims in exchange for and in
      consideration of payments of the Separation Benefit, to which the
      Participant would not otherwise be
  entitled.

              

      

       

      
        	
                1.18  

              	
                “Separation
      Benefit” means
      the benefit provided for under this Plan as determined under Article
      2.

              

      

       

      
        	
                1.19  

              	
                “Separation
      Period” means
      the period of time over which a Participant receives Separation Benefits
      under the Plan.

              

      

       

      
        	
                1.20  

              	
                “Separation
      from Service” shall
      mean an Participant’s “separation from service” as determined by the
      Company in accordance with Section 409A of the Code.  A
      Separation from Service shall be effective on the date specified by the
      Employing Company (the “Termination
  Date”).

              

      

       

      
        	
                1.21  

              	
                “Specified
      Employee” means those
      employees of the Company or a Employing Company who are determined by the
      Compensation Committee to be a “specified employee” in accordance with
      Section 409A of the Code and the regulations promulgated
      thereunder.

              

      

       

      
        	
                1.22  

              	
                “Years
      of Service” means
      the sum of the number of continuous Completed Years of Service as an
      employee of an Employing Company during Participant’s period of employment
      beginning with Participant’s most recent hire date and ending with
      Participant’s most recent termination
  date.

              

      

       

       

      ARTICLE
2.

      Benefits

       

      
        	
                2.1  

              	
                Participants

              

      

       

      Each
individual named on Schedule I hereto shall be a Participant in the
Plan.  Schedule I may be amended by the
Compensation Committee from time to time to add individuals as a
Participant.

       

      
        	
                2.2  

              	
                Separation
      Benefit

              

      

       

      
        4

      

       

      A
Separation Benefit shall be provided under the provisions of this Article 2 to a
Participant who is eligible to receive a Separation Benefit under Section 2.3 at
the time of their Separation from Service.

       

      
        	
                2.3  

              	
                Eligibility

              

      

       

      Each
Participant who complies with all administrative requirements of this Plan,
including the provisions of Article 4, is eligible to receive a Separation
Benefit following their Separation from Service.  However, a
Participant is ineligible to receive a Separation Benefit if he or she fails to
satisfy any of the requirements of this Plan, including, but not limited to,
failure to establish that his or her termination met the requirements for a
Separation from Service.  Additionally, a Participant shall be ineligible
to participate in this Plan if that Participant’s termination of
employment results from:

       

      (i) A
Discharge for Cause,

       

      (ii) A court
decree or government action or recommendation having an effect on an Employing
Company’s operations or manpower involving rationing or price control or any
other similar type cause beyond the control of an Employing
Company,

       

      (iii) An offer
to Participant of a position with an Employing Company, or
affiliate,

       

      (iv) A
termination under which a Participant accepts any benefits under an incentive
retirement plan or other severance or termination benefits program, contract or
plan offered by the Company or the Employing Company,

       

      (v) A
Participant who has a written employment contract which contains severance
provisions,

       

      (vi) A
temporary work cessation due to strikes, lockouts or similar
reasons,

       

      (vii) The
divestiture of any business of an Employing Company if the Participant is
offered a Comparable Position by the purchaser or successor of such business, an
affiliate thereof, or an affiliate of an Employing Company, or

       

      (viii) A
termination of the Participant if the Participant is offered a Comparable
Position arranged for or secured by an Employing Company.

       

      
        	
                2.4  

              	
                Separation
      Benefit Amount

              

      

       

      The
Separation Benefit payable to a Participant under this Plan shall be based, in
part, on his/her Years of Service with the Company, or Employing
Company.  The formula for determining a Participant’s Separation
Benefit payment shall be calculated by dividing Participant’s annual Base Salary
in effect immediately before the date of Separation from Service by 52 to
calculate the weekly separation benefit (the “Weekly Separation
Benefit”).  The amount of the Separation Benefit payable to
Participant shall then be determined in accordance with the following applicable
provision:

       

      
        5

      

       

      
        	
                2.4.1  

              	
                Involuntary separation
      - In the event the Separation from Service is the result of an Employing
      Company terminating the employment of Participant, the Separation Benefit
      shall be determined according to the following
  schedule:

              

      

       

      Involuntary
Separation

      Schedule
of Separation Benefits

       

      
        
          
            	
                     

                    Years
      of

                    Service

                  	
                    Number
      of Weekly

                    Separation
      Benefit

                    Payments:

                  	
                     

                    Years
      of

                    Service

                  	
                    Number
      of Weekly

                    Separation
      Benefit

                    Payments:

                  
	 
      	 
      	 
      	 
      
	
                    1

                  	
                    4

                  	
                    14

                  	
                    56

                  
	
                    2

                  	
                    8

                  	
                    15

                  	
                    60

                  
	
                    3

                  	
                    12

                  	
                    16

                  	
                    64

                  
	
                    4

                  	
                    16

                  	
                    17

                  	
                    68

                  
	
                    5

                  	
                    20

                  	
                    18

                  	
                    72

                  
	
                    6

                  	
                    24

                  	
                    19

                  	
                    76

                  
	
                    7

                  	
                    28

                  	
                    20

                  	
                    80

                  
	
                    8

                  	
                    32

                  	
                    21

                  	
                    84

                  
	
                    9

                  	
                    36

                  	
                    22

                  	
                    88

                  
	
                    10

                  	
                    40

                  	
                    23

                  	
                    92

                  
	
                    11

                  	
                    44

                  	
                    24

                  	
                    96

                  
	
                    12

                  	
                    48

                  	
                    25

                  	
                    100

                  
	
                    13

                  	
                    52

                  	
                    26
      or more

                  	
                    104

                  

          

        

      

      
        	
                2.4.2  

              	
                Voluntary separation -
      In the event the Separation from Service is the result of Participant’s
      own action (such as by way of example and not limitation, quitting,
      resignation or retirement) the Separation Benefit shall be determined
      according to the following
Schedule:

              

      

       

      Voluntary
Separation

      Schedule
of Separation Benefits

       

      
        
          
            
              
                	
                         

                        Years
      of

                        Service

                      	
                        Number
      of Weekly

                        Separation
      Benefit

                        Payments

                      
	 
      	 
      
	
                        1-19

                      	
                        0

                      
	
                        20

                      	
                        80

                      
	
                        21

                      	
                        84

                      
	
                        22

                      	
                        88

                      
	
                        23

                      	
                        92

                      
	
                        24

                      	
                        96

                      
	
                        25

                      	
                        100

                      
	
                        26
      or more

                      	
                        104

                      

              

            

          

        

      

       

      Under
certain exceptional circumstances the Compensation Committee may, in its sole
and absolute discretion, choose to treat a voluntary separation as an
involuntary separation and allow 

       

      
        6

      

       

      a
Participant to receive Separation Benefits in accordance with the schedule set
forth in Section 2.4.1.

       

      
        	
                2.5  

              	
                Separation
      Benefit Limitation

              

      

       

      Notwithstanding
anything in the Plan to the contrary, the Separation Benefit payable to any
Participant under this Plan shall never exceed the lesser of (i) 104 Weekly
Separation Benefit payments; or (ii) the amount permitted under ERISA to
maintain this Plan as a welfare benefit plan.  The benefits payable
under this Plan shall be inclusive of and offset by any amounts paid under
federal, state, local or foreign government worker notification (e.g., Worker
Adjustment and Retraining Notification Act) or office closing
requirements.

       

      
        	
                2.6  

              	
                Withholding
      Tax

              

      

       

      The
Employing Company shall deduct from the amount of any Separation Benefits
payable under this Plan, any amount required to be withheld by the Employing
Company by reason of any law or regulation, for the payment of taxes or
otherwise to any federal, state, local or foreign government.  In
determining the amount of any applicable tax, the Employing Company shall be
entitled to rely on the number of personal exemptions on the official form(s)
filed by Participant with the Employing Company for purposes of income tax
withholding on regular wages.

       

      
        	
                2.7  

              	
                Reemployment
      of a Participant

              

      

       

      Entitlement
to the unpaid balance of any Separation Benefit due a Participant under this
Plan shall be revoked immediately on reemployment of the person as an employee
of an Employing Company.  Any unpaid balance shall not be payable in
any future period.

       

      However,
if the person’s re-employment is subsequently terminated and he or she then
becomes entitled to a Separation Benefit under this Plan, Years of Service for
the period of re-employment shall be added to that portion of his or her prior
service represented by the unpaid balance or the revoked entitlement for the
prior Separation Benefit.

       

      
        	
                2.8  

              	
                Integration
      with Disability Benefits

              

      

       

      The
Separation Benefit payable to a Participant with respect to any Separation
Period shall be reduced (but not below zero) by the amount of any disability
benefit payable from any disability plan or program sponsored or contributed to
by an Employing Company.  The amount of any resulting reduction shall
not be paid to Participant in any future period.

       

      
        	
                2.9  

              	
                Plan
      Benefit Offset

              

      

       

      The
amount of any severance or separation type payment that an Employing Company is
or was obligated to pay to a Participant under any law, decree, or court award,
because of Participant’s termination of employment from an Employing Company
shall reduce the amount of Separation Benefit otherwise payable under this
Plan.

       

      
        7

      

       

      
        	
                2.10  

              	
                Recoupment

              

      

       

      The
Company may deduct from the Separation Benefit any amount owing to an Employing
Company from

       

      
        	
                 
      

              	
                (a)

              	
                Participant,
      or

              

      

       

      
        	
                 
      

              	
                (b)

              	
                the
      executor or administrator of Participant’s
  estate.

              

      

       

      
        	
                2.11  

              	
                Completion
      of Twenty Years of Service

              

      

       

      Any
Participant who completes 20 Years of Service before the termination of this
Plan shall be vested in his/her Separation Benefit, notwithstanding the
subsequent termination of this Plan before that Participant’s Separation from
Service.  Any Separation Benefit deemed to have vested under this
Section shall be payable on such Participant’s Separation from Service with the
Employing Company and shall be paid in accordance with the greater of (1) the
Plan provisions in effect immediately before the termination of this Plan, and
(2) the Plan provisions in effect on the date Participant completed 20 Years of
Service.

       

      
        	
                2.12  

              	
                Change
      in Control

              

      

       

      Unless
otherwise provided in writing by the Board of Directors before a Change in
Control of the Company, all Participant shall be vested in his/her Separation
Benefit as of the date of the Change in Control based on the Participant’s then
Years of Service as determined by reference to the schedule set forth in Section
2.3.1 of this Plan.  Any Separation Benefit deemed to have vested
under this Section shall be payable upon Participant’s Separation from Service
with the Employing Company and shall be paid in accordance with the Plan
provisions in effect immediately before the Change in Control.

       

      ARTICLE
3.

      Method
of Payment

       

      
        	
                3.1  

              	
                Separation
      Benefit Payment

              

      

       

      Separation
Benefit payments shall be paid in equal installments in the same manner as wages
were paid to Participant while employed, and, subject to Section 3.4, the
installments shall begin no later than 90 days following the Termination
Date.  Notwithstanding
anything in the Plan to the contrary, the Separation Period for a Participant
shall never exceed the amount of time permitted under ERISA to maintain this
Plan as a welfare benefit plan.  If under the payment schedule set
forth in this Plan, the Separation Period will expire before the full payment of
the Separation Benefit owed to a Participant under this Plan, then the total
amount unpaid as of the final installment shall be paid to the Participant in
the final installment.

       

      
        	
                3.1.1  

              	
                Each
      Participant, upon selection for participation in this Plan, may make an
      election to defer payment of the Separation Benefit to a date specified in
      the deferral election that will be provided in a form prescribed by the
      Compensation 

              

      

       

      
        8

      

       

      
        	
                 

              	
                Committee.  A
      Participant who elects to defer payment of his or her Separation Benefit
      will also be permitted to elect between payment of the deferred Separation
      Benefit in the form of a lump sum or installment payments over a 24-month
      period.  A Participant may change his or her election so long as
      the election to change is submitted to the Compensation Committee at least
      twelve months prior to the date payment of a Separation Benefit would have
      otherwise commenced and payment of the Separation Benefit is delayed at
      least five years from the date payment was previously set to
      commence.

              

         

      

       

      
        	
                3.2  

              	
                Protection
      of Business

              

      

       

      
        	
                3.2.1  

              	
                Any
      Participant who
      receives Separation Benefits under Section 2.2 of this Plan agrees that,
      in consideration of the Separation Benefits, the Participant will not, in
      any capacity, directly or indirectly, and on his or her own behalf or on
      behalf of any other person or entity, during the period of time he or she
      is receiving Separation Benefits, either (a) solicit or attempt to induce
      any current customer of the Employing Company to cease doing business with
      the Employing Company; (b) solicit or attempt to induce any employee of
      the Employing Company to sever the employment relationship; (c) compete
      against the Employing Company; (d) injure the Employing Company and the
      Company, in their business activities or its reputation; or (e) act as an
      employee, independent contractor, or service provider of a person or
      entity that is a competitor of the Employing Company or injures the
      Employing Company or the Company, its business activities or its
      reputation (collectively, the “Protection of Business
      Requirements”).  The Compensation Committee in its sole
      discretion shall decide whether any Participant is in
      violation of this Section.

              

      

       

      
        	
                3.2.2  

              	
                Except
      as provided in the next paragraph and/or the Separation Agreement, in the
      event the Participant violates the
      Protection of Business Requirements of this Section (or the like
      provisions of his or her Separation Agreement), the Participant shall not be
      entitled to any further payments of Separation Benefits under this Plan
      and shall be obligated to repay the Employing Company all monies
      previously received as Separation Benefits from the date of the violation
      forward.

              

      

       

      
        	
                3.2.3  

              	
                In
      the event of a Change in Control, the Participant ’s obligations
      under this Section shall expire and be canceled, and the Participant shall be
      entitled to Separation Benefits under this Plan in accordance with its
      terms even if he or she engages in conduct that would otherwise violate
      the Protection of Business Requirements in this
  Section.

              

      

       

      
        	
                3.2.4  

              	
                The
      Plan shall maintain records for each Participant that is
      eligible for Separation Benefits and for each Participant that actually
      receives Separation Benefits (including relevant dates, claim records,
      appeal records, payment amounts,
etc.).

              

      

       

      
        9

      

       

      
        	
                3.2.5  

              	
                The
      Plan shall pay benefits to Participant on a regular
      basis.  The Plan shall process and pay Separation Benefits on a
      regular basis, and adjudicate claims for denied or terminated Separation
      Benefits.

              

      

       

      
        	
                3.2.6  

              	
                The
      Compensation Committee shall have the ultimate ongoing administrative duty
      to monitor and investigate the activities of Participants to ensure
      they are in compliance with the Protection of Business
      Requirements.  As set forth in this Plan, the Compensation
      Committee shall have discretion to determine on an ongoing basis whether
      each Participant
      receiving Separation Benefits remains in compliance with the Plan’s
      Protection of Business Requirements during the period the Participant is receiving
      Separation Benefits.

              

      

       

      
        	
                3.2.7  

              	
                The
      Compensation Committee shall have full and sole discretion to determine
      eligibility for Separation Benefits and to construe the terms of the
      Plan.

              

      

       

      
        	
                3.2.8  

              	
                By
      accepting Separation Benefits, a Participant certifies that
      he/she is in compliance with the Protection of Business
      Requirements.  Participants must notify
      the Plan, through the Human Resources Director, of any change of employer,
      employment status, or job status or responsibilities, while eligible for
      Separation Benefits.  Additionally, Participants receiving
      benefits must complete and submit to the Plan on request a form certifying
      that they are in compliance with the Protection of Business
      Requirements.  The Human Resources Director shall review such
      forms and make preliminary decisions regarding whether the Participant is in
      compliance with the Protection of Business
  Requirements.

              

      

       

      
        	
                3.2.9  

              	
                As
      a condition to receiving Separation Benefits or coverage, Participants and their
      employers must fully cooperate with any inquiry or investigation by the
      Plan concerning the Protection of Business Requirements.  If the
      Participant or
      employer fails to fully cooperate with any such inquiry or investigation,
      the Participant
      shall be deemed to have been in violation of the Protection of Business
      Requirements, and shall therefore forfeit any further benefits under the
      Plan and shall be obligated to repay the Employing Company all monies
      previously received as Separation
Benefits.

              

      

       

      
        	
                3.2.10  

              	
                The
      Company shall maintain a projection of the amount of money that will be
      required for the Company to fulfill its unfunded obligation under the Plan
      to make payments to various Participants at different
      times.

              

      

       

      

       

      
        	
                3.3  

              	
                Death
      Subsequent to Separation from
Service

              

      

       

      If the
death of a Participant occurs after the date of Separation from Service and
before receipt of the full Separation Benefit to which he or she was entitled,
the remaining payments shall be paid to such Participant’s Beneficiary in
accordance with the Provisions of Section 2.4.2 and 3.1.  If there is
no designated living Beneficiary, the payments shall be paid to the executor or
administrator of Participant’s estate.

       

      
        10

      

       

      
        	
                3.4  

              	
                Payment
      to Specified Employees Upon Separation from
  Service

              

      

       

      In no
event shall a Specified Employee receive a payment under this Plan following a
Separation from Service before the first business day of the seventh month
following the date of Separation from Service, unless the Separation from
Service results from death.  Any amounts which would otherwise be
payable to the Specified Employee during the six month period may, at the
Employing Company’s discretion, be accumulated and paid on the first day of the
seventh month following the date of the Specified Employee’s Separation from
Service.

       

      ARTICLE
4.

      Waiver
and Release of Claims

       

      It is a
condition of this Plan that no Separation Benefit shall be paid to or for any
Participant except on due signing and delivery to the Employing Company by that
Participant of a Separation Agreement, in substantially the form attached to
this Plan as Attachment A (except as may be modified from time to time), by
which Participant waives and releases the Company, the Employing Company, their
subsidiaries and their officers, directors, agents, employees, and affiliates
from all claims arising or alleged to arise out of his or her employment or the
Separation from Service.  The waiver and release provided in the
Separation Agreement is being given in exchange for and in consideration of
payment of the Separation Benefit, to which Participant would not otherwise be
entitled.

       

      In
connection with the signing of the Separation Agreement, the following
procedures shall be followed (except as modified from time to time): Participant
shall be advised in writing, by receiving the written text of the Separation
Agreement so stating, to consult a lawyer before signing the Separation
Agreement; Participant shall be given 21 days to consider the Separation
Agreement before signing; after signing, Participant shall have seven days in
which to revoke the Separation Agreement; and the Separation Agreement shall not
take effect until that seven-day period shall have passed.

       

      ARTICLE
5.

      Funding

       

      This Plan
is an unfunded employee welfare benefit plan under ERISA established by the
Company.  Benefits payable to Participants shall be paid out of the
general assets of the Company or the Employing Company.  The Employing
Company shall not be required to establish any special or separate fund or to
make any other segregation of assets to assure the payment of any Separation
Benefits under this Plan.

       

      ARTICLE
6.

      Administration

       

      
        	
                6.1  

              	
                Named
      Fiduciary

              

      

       

      This Plan
shall be administered by the Company acting through the Compensation Committee
or such other person as may be designated by the Company from time to
time.  The Compensation Committee shall be the “Administrator” of the
Plan and shall be, in its 

       

      
        11

      

       

      capacity
as Administrator, a “Named Fiduciary,” as such terms are defined or used in
ERISA.

       

      
        	
                6.2  

              	
                Fiduciary
      Responsibilities

              

      

       

      The named
fiduciary shall fulfill the duties and requirements of fiduciary under ERISA and
is the Plan’s agent for service of legal process.  The named fiduciary
may designate other persons to carry out the fiduciary responsibilities and may
cancel any designation.  A person may serve in more than one fiduciary
or administrative capacity with respect to this Plan.  The named
fiduciary shall periodically review the performance of the fiduciary
responsibilities by each designated person.

       

      
        	
                6.3  

              	
                Specific
      Fiduciary Responsibilities

              

      

       

      The
Compensation Committee shall be responsible for the general administration and
interpretation of the Plan and the proper carrying out of its provisions and
shall have full discretion to carry out its duties.  In addition to
any powers of the Compensation Committee specified elsewhere in this Plan, the
Compensation Committee shall have all discretionary powers necessary to
discharge its duties under this Plan, including, but not limited to, the
following discretionary powers and duties:

       

      (i) To
interpret or construe the terms of this Plan, including eligibility to
participate, and resolve ambiguities, inconsistencies and
omissions;

       

      (ii) To make
and enforce such rules and regulations and prescribe the use of these forms as
it deems necessary or appropriate for the efficient administration of the
Plan;

       

      (iii) To decide
all questions concerning this Plan and the determination of who shall be a
Participant; and

       

      (iv) To
determine eligibility for Separation Benefits under this Plan.

       

      
        	
                6.4  

              	
                Allocations
      and Delegations of Responsibility

              

      

       

      The Board
of Directors and the Compensation Committee, respectively, shall have the
authority to delegate, from time to time, all or any part of its
responsibilities under this Plan to those person or persons as it may deem
advisable and in the same manner to revoke any such delegation of
responsibility.  Any action of the delegate in the exercise of such
delegated responsibilities shall have the same force and effect for all purposes
hereunder as if such action had been taken by the Board of Directors or the
Compensation Committee.  The Company, the Board of Directors and the
Compensation Committee shall not be liable for any acts or omissions of any such
delegate.  The delegate shall report periodically to the Board of
Directors or the Compensation Committee, as applicable, concerning the discharge
of the delegated responsibilities.

       

      The Board
of Directors and the Compensation Committee, respectively, shall have the
authority to allocate, from time to time, all or any part of its
responsibilities under this Plan to one or more of its members as it may deem
advisable, and in the same manner to 

       

      
        12

      

       

      remove
such allocation of responsibilities.  Any action of the member to whom
responsibilities are allocated in the exercise of such allocated
responsibilities shall have the same force and effect for all purposes hereunder
as if such action had been taken by the Board of Directors or the Compensation
Committee.  The Company, the Board of Directors and the Compensation
Committee shall not be liable for any acts or omissions of such
member.  The member to whom responsibilities have been allocated shall
report periodically to the Board of Directors or the Compensation Committee, as
applicable, concerning the discharge of the allocated
responsibilities.

       

      
        	
                6.5  

              	
                Advisors

              

      

       

      The named
fiduciary or any person designated by the named fiduciary to carry out fiduciary
responsibilities may employ one or more persons to render advice with respect to
any responsibility imposed by this Plan.

       

      
        	
                6.6  

              	
                Plan
      Determination

              

      

       

      The
determination of the Compensation Committee as to any question involving the
general administration and interpretation or construction of the Plan shall be
within its sole discretion and shall be final, conclusive and binding on all
persons, except as otherwise provided herein or by law.

       

      
        	
                6.7  

              	
                Modification
      and Termination

              

      

       

      The
Company may at any time, without notice or consent of any person, terminate or
modify this Plan in whole or in part, and such termination or modification shall
apply to existing as well as to future Participants, but such actions shall not
affect any Separation Benefit that has become payable to a Participant, and such
benefit shall continue to be paid in accordance with the Plan provisions in
effect on the date of the Separation from Service.

       

      
        	
                6.8  

              	
                Indemnification

              

      

       

      To the
extent permitted by law, the Company shall indemnify and hold harmless the
members of the Board of Directors, the Compensation Committee members, and any
employee to whom any fiduciary responsibility with respect to this Plan is
allocated or delegated to, and against any and all liabilities, costs and
expenses incurred by any such person as a result of any act, or omission to act,
in connection with the performance of his/her duties, responsibilities and
obligations under this Plan, ERISA and other applicable law, other than such
liabilities, costs and expenses as may result from the gross negligence or
willful misconduct of any such person.  The foregoing right of
indemnification shall be in addition to any other right to which any such person
may be entitled as a matter of law or otherwise.  The Company may
obtain, pay for and keep current a policy or policies of insurance, insuring the
members of the Board of Directors, the Compensation Committee members and any
other employees who have any fiduciary responsibility with respect to this Plan
from and against any and all liabilities, costs and expenses incurred by any
such person as a result of any act, or omission, in connection 

       

      
        13

      

       

      with the
performance of his/her duties, responsibilities and obligations under this Plan
and under ERISA.

       

      
        	
                6.9  

              	
                Successful
      Defense

              

      

       

      A person
who has been wholly successful, on the merits or otherwise, in the defense of a
civil or criminal action or proceeding or claim or demand of the character
described in Section 6.8 shall be entitled to indemnification as authorized in
Section 6.8.

       

      
        	
                6.10  

              	
                Unsuccessful
      Defense

              

      

       

      Except as
provided in Section 6.9, any indemnification under Section 6.8, unless ordered
by a court of competent jurisdiction, shall be made by the Company only if
authorized in the specific case:

       

      
        	
                6.10.1  

              	
                By
      the Board of Directors acting by a quorum consisting of directors who are
      not parties to such action, proceeding, claim or demand, upon a finding
      that the member of the Compensation Committee has met the standard of
      conduct set forth in Section 6.8;
or

              

      

       

      
        	
                6.10.2  

              	
                If
      a quorum under Section 6.10.1 is not obtainable with due diligence by the
      Board of Directors upon the opinion in writing of independent legal
      counsel (who may be counsel to any Employing Company) that indemnification
      is proper in the circumstances because the standard of conduct set forth
      in Section 6.8 has been met by such member of the Compensation
      Committee.

              

      

       

      
        	
                6.11  

              	
                Advance
      Payments

              

      

       

      Expenses
incurred in defending a civil or criminal action or proceeding or claim or
demand may be paid by the Company or Employing Company, as applicable, in
advance of the final disposition of such action or proceeding, claim or demand,
if authorized in the manner specified in Section 6.10, except that, in view of
the obligation of repayment set forth in Section 6.12, there need be no finding
or opinion that the required standard of conduct has been met.

       

      
        	
                6.12  

              	
                Repayment
      of Advance Payments

              

      

       

      All
expenses incurred, in defending a civil or criminal action or proceeding, claim
or demand, which are advanced by the Company or Employing Company, as
applicable, under Section 6.11 shall be repaid if the person receiving such
advance is ultimately found, under the procedures set forth in this Article 6,
not to be entitled to the extent the expenses so advanced by the Company exceed
the indemnification to which he or she is entitled.

       

      
        	
                6.13  

              	
                Right
      of Indemnification

              

      

       

      Notwithstanding
the failure of the Company or Employing Company, as applicable, to provide
indemnification in the manner set forth in Sections 6.10 and 6.11, and despite

       

      
        14

      

       

      any
contrary resolution of the Board of Directors or of the shareholders in the
specific case, if the member of the Compensation Committee has met the standard
of conduct set forth in Section 6.8, the person made or threatened to be made a
party to the action or proceeding or against whom the claim or demand has been
made, shall have the legal right to indemnification from the Company or
Employing Company, as applicable, as a matter of contract by virtue of this
Plan, it being the intention that each such person shall have the right to
enforce such right of indemnification against the Company or Employing Company,
as applicable, in any court of competent jurisdiction.

       

      ARTICLE
7.

      Effective
Date and Plan Year

       

      This Plan
shall be effective as amended and restated on and after December 31,
2008.  The Plan Year is the calendar year.

       

      ARTICLE
8.

      Miscellaneous

       

      
        	
                8.1  

              	
                Assignment

              

      

       

      A
Participant’s right to benefits under this Plan shall not be assigned,
transferred, pledged, encumbered in any way or subject to attachment or
garnishment, and any attempted assignment, transfer, pledge, encumbrance,
attachment, garnishment or other disposition of such benefits shall be null and
void and without effect.

       

      
        	
                8.2  

              	
                Governing
      Law

              

      

       

      The Plan
shall be construed and administered in accordance with ERISA and with the laws
of the State of Oklahoma, to the extent such State laws are not preempted by
ERISA.

       

      
        	
                8.3  

              	
                Employing
      Company Records

              

      

       

      The
records of the Employing Company with regard to any person’s Participant status,
Beneficiary status, employment history, Years of Service and all other relevant
matters shall be conclusive for purposes of administration of the
Plan.

       

      
        	
                8.4  

              	
                Employment
      Non-Contractual

              

      

       

      This Plan
is not intended to and does not create a contract of employment, express or
implied, and an Employing Company may terminate the employment of any employee
with or without cause as freely and with the same effect as if this Plan did not
exist.  Nothing contained in this Plan shall be deemed to qualify,
limit or alter in any manner the Employing Company’s sole and complete authority
and discretion to establish, regulate, determine or modify at all times, the
terms and conditions of employment, including, but not limited to, levels of
employment, hours of work, the extent of hiring and employment termination, when
and where work shall be done, marketing of its products, or any other matter
related to the conduct of its business or the manner in which its business is to
be 

       

      
        15

      

       

      maintained
or carried on, in the same manner and to the same extent as if this Plan were
not in existence.

       

      
        	
                8.5  

              	
                Taxes

              

      

       

      Neither
an Employing Company nor any fiduciary of this Plan shall be liable for any
taxes incurred by a Participant or Beneficiary for Separation Benefit payments
made pursuant to this Plan.

       

      
        	
                8.6  

              	
                Binding
      Effect

              

      

       

      This Plan
shall be binding on the Company, any Employing Company and their successors and
assigns, and Participant,  Participant’s heirs, executors,
administrators and legal representatives.  As used in this Plan, the
term “successor” shall include any person, firm, corporation or other business
entity which at any time, whether by merger, purchase or otherwise, acquires all
or substantially all of the assets or business of the Company or any Employing
Company.

       

      
        	
                8.7  

              	
                Entire
      Agreement

              

      

       

      This Plan
constitutes the entire understanding between the parties hereto and may be
modified only in accordance with the terms of this Plan.

       

      
        	
                8.8  

              	
                Decisions and Appeals

              

      

       

      
        	
                8.8.1  

              	
                Manner and Content of
      Benefit Determination

              

      

       

      Within
thirty (90) days from the date of a Participant’s Separation from
Service (or longer if special circumstances require), the Human Resources
Director and the General Counsel shall provide the Participant with either an
agreement and release offering Separation Benefits under the Plan or written or
electronic notification of such Participant’s ineligibility for
or denial of Separation Benefits, either in whole or in part.  If at
any time the Human Resources Director and the General Counsel make any adverse
benefit determination, such notification shall set forth, in a manner calculated
to be understood by the Participant including the
following:

       

      (i) the
specific reason(s) for the adverse determination;

       

      (ii) references
to the specific plan provisions upon which the determination is
based;

       

      (iii) a
description of any additional material or information necessary for the Participant to perfect the claim
and an explanation of why such material or information is
necessary;

       

      (iv) a
description of the Plan’s review procedures and the time limits applicable to
such procedures, including a statement of the Participant’s right to bring a
civil action under section 502(a) of ERISA following an adverse benefit
determination on 

       

      
        16

      

       

      review
under Section 8.8.3;

       

      (v) if the
Plan utilizes a specific internal rule, guideline, protocol, or other similar
criterion in making the determination, either the specific rule, guideline,
protocol or other similar criterion; or a statement that such a rule, guideline,
protocol or other similar criterion was relied upon and that a copy of such
rule, guideline, protocol or similar criterion will be provided free of charge
to the Participant upon
request;

       

      
        	
                8.8.2  

              	
                Appeal of Denied Claim
      and Review Procedure

              

      

       

      If a
Participant does not agree with the reason for the denial or termination of
Separation Benefits (including a denial or termination of benefits based on a
determination of a Participant’s eligibility to participate in the Plan), he/she
may file a written appeal within 180 days after the receipt of the original
claim determination.  The request should state the basis for the
disagreement along with any data, questions, or comments he/she thinks are
appropriate, and should be sent to the office of the Human Resources
Director.

       

      The
Compensation Committee shall conduct a full and fair review of the
determination.  The review shall not defer to the initial
determination, and it shall take into account all comments, documents, records
and other information submitted by the Participant without regard to
whether such information was previously submitted or considered in the initial
determination.

       

      
        	
                8.8.3  

              	
                Manner and Content of
      Notification of Benefit Determination on
Review

              

      

       

      Within 60
days (or longer if special circumstances require), the Compensation Committee
shall provide a Participant with written or
electronic notification of any adverse benefit determination on
review.  The notification shall set forth, in a manner calculated to
be understood by the Participant the
following:

       

      (i) the
specific reason(s) for the adverse determination on review;

       

      (ii) reference
to the specific plan provisions upon which the review is based;

       

      (iii) a
statement that the Participant is entitled to receive, upon request and free of
charge, reasonable access to, and copies of, all documents, records, and other
information relevant to his claim for benefits;

       

      (iv) a
statement describing any voluntary appeal procedures offered by the Plan and the
Participant’s right to obtain the information about such procedures, and a
statement of the Participant’s right to bring an action under section 502(a) of
ERISA;

       

      (v) if an
internal rule, guideline, protocol, or other similar criterion was relied upon
in making the adverse determination on review, either the specific rule,
guideline, protocol, or other similar criterion, or a statement that such rule,
guideline, protocol, or other similar criterion was relied upon in making the
adverse determination on review and that a copy of the rule, guideline,
protocol, or other similar criterion will be provided free of charge to the
Participant upon request;

       

      
        17

      

       

      (vi) the
following statement: “Other voluntary alternative dispute resolution methods,
such as mediation, may be available.  You may seek additional
information by contacting your local U.S. Department of Labor office and your
State insurance regulatory agency.”

       

      EXECUTED
as of this 31st day of December, 2008.

       

      UNIT
CORPORATION

       

      By: /s/ Mark E.
Schell

      Mark E.
Schell, Senior Vice President and General Counsel

       

      

       

       

       

       

       

       

       

       

       

      
        18

      

       

      To
receive a Separation Benefit, a participant must sign the following Separation
Agreement provided by the Company:

       

      SEPARATION
AGREEMENT

       

      [Name of
Employing Company] (“Unit”) and _______________________________________
(“Participant”) hereby agree as follows:

       

      Participant’s
employment will end on ____________________, 20__.

       

      Unit will
pay to Participant a Separation Benefit of $_________________ in accordance with
and subject to the terms of the Unit Corporation Separation Benefit Plan for
Senior Management (the “Plan”).

       

      Participant
knows that state and federal laws, including the Age Discrimination in
Employment Act, prohibit employment discrimination based on age, sex, race,
color, national origin, religion, handicap, disability, or veteran status, and
that these laws are enforced through the United States Equal Employment
Opportunity Commission (“EEOC”), United States Department of Labor, and State
Human Rights Agencies.

       

      PARTICIPANT
IS ADVISED TO CONSULT AN ATTORNEY PRIOR TO SIGNING THIS AGREEMENT.

       

      PARTICIPANT
HAS TWENTY-ONE DAYS AFTER RECEIVING THIS AGREEMENT TO CONSIDER WHETHER TO SIGN
IT.

       

      AFTER
SIGNING THIS AGREEMENT,  PARTICIPANT HAS ANOTHER SEVEN DAYS IN WHICH
TO REVOKE IT, AND IT DOES NOT TAKE EFFECT UNTIL THOSE SEVEN DAYS HAVE
ENDED.

       

      In
exchange for the Separation Benefit described above, to which Participant is not
otherwise entitled, Participant forever releases and discharges Unit
Corporation, and its subsidiaries, their officers, directors, agents, employees,
and affiliates from all claims, liabilities, and lawsuits arising out of
Participant’s employment or the termination of that employment and agrees not to
assert any such claim, liability, or lawsuit. This includes any claim under the
Age Discrimination in Employment Act or under any other federal, state, or local
statute or regulation relating to employment discrimination.  It also
includes any claim under any other statute or regulation or common law rule
relating to Participant’s employment or the termination of that
employment.  This Agreement does not have any effect with respect to
acts or events occurring after the date upon which Participant signs
it.  This Agreement does not limit any benefits to which Participant
is entitled under any retirement plans, if any.

       

      As
further consideration for the payment of the Separation Benefit described above,
Participant agrees that if Participant’s Separation Benefit is received pursuant
to Section 2.3.2 “Voluntary Separation” of the Plan, Participant will not in any
capacity directly or indirectly and on his or her own behalf or on behalf of any
other person or entity, during the period of time he or she is receiving such
Separation Benefits, either (a) solicit or 

       

      
        1

      

       

      attempt
to induce any current customer of the Company to cease doing business with the
Company or (b) solicit or attempt to induce any employee of the Company to sever
the employment relationship with the Company (collectively, the “Protection of
Business Requirements”).

       

      Except as
provided in the next paragraph, in the event Participant violates the Protection
of Business Requirements hereof, Participant shall not be entitled to any
further payments of Separation Benefits under the Plan or this Agreement and
shall be obligated to repay Unit all Separation Benefit payments previously
received under the Plan and this Agreement.

       

      In the
event of a Change in Control (as defined in the Plan), Participant’s obligations
regarding the Protection of Business Requirements under this Agreement shall
expire and be canceled, and Participant shall be entitled to the Separation
Benefits provided under the Plan in accordance with the terms of the Plan,
notwithstanding whether Participant thereafter engages in conduct that would
otherwise violate the Protection of Business Requirements described in this
Agreement.

       

      Participant
has carefully read and fully understands all the provisions of this
Agreement.  This Agreement and the Plan constitute the entire
agreement between the parties and is legally binding and enforceable.
Participant has not relied upon any representation or statement, written or
oral, not set forth in this Agreement.

       

      This
Agreement shall be governed and interpreted under federal law and the laws of
Oklahoma.

       

      
        2

      

       

      Participant
knowingly and voluntarily signs this Agreement.

       

      
        	
                Date
      Delivered to Participant:

              	
                [Name
      of Employing Company]

              

      

       

      
        
        

      

       

      
        	__________________________	
                By: 
        ___________________________

              	 

      

       

      
        	
              	
                Title: 
      ___________________________

              	 

      

       

      
        	
                Date
      signed by Participant:

              	
                Date: 
      ___________________________

              	 

      

       

      
        	
                __________________________ 
      

              	 

      

       

      
        	
                Participant
      Signature:

              	
                Seven-Day
      Revocation Period Ends:

              

      

       

      
        	
                __________________________ 
      

              	____________________________ 

      

       

       

      __________________________

      

      (Print
Participant’s Name)

      
         

        
          3

        

         

      

      SCHEDULE
I

       

      Dated as
of December 31, 2008

       

       

       

      Name of
Participants

       

      King P.
Kirchner

      O. Earle
Lamborn

      John G.
Nikkelex10_1.htm

    EXHIBIT 10.1

      
        
          
            

            

          

           

      

       

      Amended
and Restated Post-Petition Credit Agreement

       

       

       

      Dated as
of December 31, 2008

       

      

       

      among

       

      

       

      Pilgrim’s
Pride Corporation, as Debtor and Debtor-in-Possession,

       

      

       

      the
guarantors from time to time parties hereto,

       

      

       

      the
Lenders from time to time parties hereto,

      
 

      
and

       

      

      Bank
of Montreal,

       

      as
DIP Agent

      
        

      

       

      

      
        

        

      

      
        
          
            2545997_0110.DOC

            1078278/RLC

          

           

        

        
           

          
            

          

        

        
           

        

      

    

    

      
        	 
      	
                Table
      of Contents

              	 
      
	
                Section

              	
                Heading

              	
                Page

              
	
                Section
      1.

              	
                The
      Credit Facilities.

              	
                1

              
	 
      	
                Section
      1.1

              	 
      	
                DIP
      Commitments

              	
                1

              
	 
      	
                Section
      1.2

              	 
      	
                Letters
      of Credit

              	
                2

              
	 
      	
                Section
      1.3

              	 
      	
                Applicable
      Interest Rates

              	
                5

              
	 
      	
                Section
      1.4

              	 
      	
                Minimum
      Borrowing Amounts

              	
                6

              
	 
      	
                Section
      1.5

              	 
      	
                Manner
      of Borrowing DIP Loans

              	
                6

              
	 
      	
                Section
      1.6

              	 
      	
                Swing
      Loans

              	
                7

              
	 
      	
                Section
      1.7

              	 
      	
                Maturity
      of Loans

              	
                8

              
	 
      	
                Section
      1.8

              	 
      	
                Prepayments

              	
                8

              
	 
      	
                Section
      1.9

              	 
      	
                Default
      Rate

              	
                10

              
	 
      	
                Section
      1.10

              	 
      	
                Evidence
      of Indebtedness

              	
                11

              
	 
      	
                Section
      1.11

              	 
      	
                Commitment
      Terminations

              	
                11

              
	 
      	
                Section
      1.12

              	 
      	
                Guaranties

              	
                12

              
	 
      	
                Section
      1.13

              	 
      	
                Substitution
      of Lenders

              	
                12

              
	
                Section
      2.

              	
                Fees.

              	
                12

              
	 
      	
                Section
      2.1

              	 
      	
                Fees

              	
                12

              
	
                Section
      3.

              	
                Place
      and Application of Payments.

              	
                13

              
	 
      	
                Section
      3.1

              	 
      	
                Place
      and Application of Payments

              	
                13

              
	 
      	
                Section
      3.2

              	 
      	
                Account
      Debit

              	
                14

              
	
                Section
      4.

              	
                The
      Collateral.

              	
                14

              
	 
      	
                Section
      4.1

              	 
      	
                Security

              	
                14

              
	 
      	
                Section
      4.2

              	 
      	
                Perfection
      of Security Interests

              	
                15

              
	 
      	
                Section
      4.3

              	 
      	
                Receivables
      and Inventory Collections

              	
                16

              
	 
      	
                Section
      4.4

              	 
      	
                Cash
      Collateral Account

              	
                16

              
	 
      	
                Section
      4.5

              	 
      	
                Rights
      of DIP Agent

              	
                17

              
	 
      	
                Section
      4.6

              	 
      	
                Performance
      by DIP Agent of Debtors’ Post-Petition Obligations

              	
                17

              
	 
      	
                Section
      4.7

              	 
      	
                DIP
      Agent’s Appointment as Attorney-in-Fact

              	
                18

              
	
                Section
      5.

              	
                Definitions;
      Interpretation.

              	
                19

              
	 
      	
                Section
      5.1

              	 
      	
                Definitions

              	
                19

              
	 
      	
                Section
      5.2

              	 
      	
                Interpretation

              	
                42

              
	 
      	
                Section
      5.3

              	 
      	
                Change
      in Accounting Principles

              	
                43

              
	 
      	
                Section
      5.4

              	 
      	
                Timing
      of Payment or Performance

              	
                43

              
	
                Section
      6.

              	
                Representations
      and Warranties.

              	
                43

              
	 
      	
                Section
      6.1

              	 
      	
                Organization
      and Qualification

              	
                43

              
	 
      	
                Section
      6.2

              	 
      	
                Subsidiaries

              	
                43

              
	 
      	
                Section
      6.3

              	 
      	
                Authority
      and Validity of Obligations

              	
                44

              
	 
      	
                Section
      6.4

              	 
      	
                Use
      of Proceeds; Margin Stock

              	
                45

              
	 
      	
                Section
      6.5

              	 
      	
                Financial
      Reports

              	
                45

              

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      
        	 
      	
                Section
      6.6

              	 
      	
                No
      Material Adverse Change

              	
                45

              
	 
      	
                Section
      6.7

              	 
      	
                Full
      Disclosure

              	
                45

              
	 
      	
                Section
      6.8

              	 
      	
                Trademarks,
      Franchises, and Licenses

              	
                46

              
	 
      	
                Section
      6.9

              	 
      	
                Governmental
      Authority and Licensing

              	
                46

              
	 
      	
                Section
      6.10

              	 
      	
                Good
      Title

              	
                46

              
	 
      	
                Section
      6.11

              	 
      	
                Litigation
      and Other Controversies

              	
                46

              
	 
      	
                Section
      6.12

              	 
      	
                Taxes

              	
                46

              
	 
      	
                Section
      6.13

              	 
      	
                Approvals

              	
                47

              
	 
      	
                Section 6.14

              	 
      	
                Affiliate
      Transactions

              	
                47

              
	 
      	
                Section
      6.15

              	 
      	
                Investment
      Company

              	
                47

              
	 
      	
                Section
      6.16

              	 
      	
                ERISA

              	
                47

              
	 
      	
                Section
      6.17

              	 
      	
                Compliance
      with Laws

              	
                47

              
	 
      	
                Section
      6.18

              	 
      	
                Other
      Agreements

              	
                48

              
	 
      	
                Section
      6.19

              	 
      	
                No
      Default

              	
                48

              
	 
      	
                Section
      6.20

              	 
      	
                Financing
      Orders

              	
                48

              
	 
      	
                Section
      6.21

              	 
      	
                Super-Priority
      Administrative Expense and Liens

              	
                49

              
	
                Section
      7.

              	
                Conditions
      Precedent.

              	
                49

              
	 
      	
                Section
      7.1

              	 
      	
                All
      Credit Events

              	
                49

              
	 
      	
                Section
      7.2

              	 
      	
                Conditions
      to Effectiveness

              	
                50

              
	
                Section
      8.

              	
                Covenants.

              	
                52

              
	 
      	
                Section
      8.1

              	 
      	
                Maintenance
      of Business

              	
                52

              
	 
      	
                Section
      8.2

              	 
      	
                Maintenance
      of Properties

              	
                52

              
	 
      	
                Section
      8.3

              	 
      	
                Taxes
      and Assessments

              	
                52

              
	 
      	
                Section
      8.4

              	 
      	
                Insurance

              	
                52

              
	 
      	
                Section
      8.5

              	 
      	
                Financial
      Reports

              	
                53

              
	 
      	
                Section
      8.6

              	 
      	
                Inspection

              	
                56

              
	 
      	
                Section
      8.7

              	 
      	
                Borrowings
      and Guaranties

              	
                56

              
	 
      	
                Section
      8.8

              	 
      	
                Liens

              	
                58

              
	 
      	
                Section
      8.9

              	 
      	
                Investments,
      Acquisitions, Loans and Advances

              	
                62

              
	 
      	
                Section
      8.10

              	 
      	
                Mergers,
      Consolidations and Sales

              	
                64

              
	 
      	
                Section
      8.11

              	 
      	
                Maintenance
      of Subsidiaries

              	
                65

              
	 
      	
                Section
      8.12

              	 
      	
                Dividends
      and Certain Other Restricted Payments

              	
                66

              
	 
      	
                Section
      8.13

              	 
      	
                ERISA

              	
                66

              
	 
      	
                Section
      8.14

              	 
      	
                Compliance
      with Laws

              	
                66

              
	 
      	
                Section
      8.15

              	 
      	
                Burdensome
      Contracts With Affiliates

              	
                67

              
	 
      	
                Section
      8.16

              	 
      	
                No
      Changes in Fiscal Year

              	
                68

              
	 
      	
                Section
      8.17

              	 
      	
                Formation
      of Subsidiaries

              	
                68

              
	 
      	
                Section
      8.18

              	 
      	
                Change
      in the Nature of Business

              	
                68

              
	 
      	
                Section
      8.19

              	 
      	
                Use
      of Proceeds

              	
                68

              
	 
      	
                Section
      8.20

              	 
      	
                No
      Restrictions

              	
                68

              
	 
      	
                Section
      8.21

              	 
      	
                DIP
      Agent’s and Lenders’ Financial Consultant

              	
                70

              
	 
      	
                Section
      8.22

              	 
      	
                Financial
      Covenants

              	
                70

              
	 
      	
                Section
      8.23

              	 
      	
                Chapter 11
      Claims

              	
                71

              
	 
      	
                Section
      8.24

              	 
      	
                Course
      of Business

              	
                71

              

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      
        	 
      	
                Section
      8.25

              	 
      	
                Restriction
      on Hedging

              	
                72

              
	 
      	
                Section
      8.26

              	 
      	
                The
      Budget

              	
                72

              
	 
      	
                Section
      8.27

              	 
      	
                Subsidiary
      Distributions, Etc

              	
                72

              
	 
      	
                Section
      8.28

              	 
      	
                Borrower’s
      Financial Consultants Engagements; Sale of Certain Assets

              	
                73

              
	 
      	
                Section
      8.29

              	 
      	
                Engagement
      of Chief Restructuring Officer

              	
                73

              
	
                Section
      9.

              	
                Events
      of Default and Remedies.

              	
                73

              
	 
      	
                Section
      9.1

              	 
      	
                Events
      of Default

              	
                73

              
	 
      	
                Section
      9.2

              	 
      	
                Consequences
      of Event of Default

              	
                77

              
	 
      	
                Section
      9.3

              	 
      	
                Relief
      from Stay

              	
                78

              
	
                Section
      10.

              	
                Guarantee.

              	
                78

              
	 
      	
                Section
      10.1

              	 
      	
                Guarantee

              	
                78

              
	 
      	
                Section
      10.2

              	 
      	
                Right
      of Contribution

              	
                79

              
	 
      	
                Section
      10.3

              	 
      	
                No
      Subrogation

              	
                79

              
	 
      	
                Section
      10.4

              	 
      	
                Amendments,
      Etc. with Respect to the Post-Petition Obligations

              	
                79

              
	 
      	
                Section
      10.5

              	 
      	
                Guarantee
      Absolute and Unconditional

              	
                80

              
	 
      	
                Section
      10.6

              	 
      	
                Reinstatement

              	
                80

              
	 
      	
                Section
      10.7

              	 
      	
                Payments

              	
                81

              
	 
      	
                Section
      10.8

              	 
      	
                Release
      of Guaranties

              	
                81

              
	
                Section
      11.

              	
                The
      DIP Agent.

              	
                81

              
	 
      	
                Section
      11.1

              	 
      	
                Appointment
      and Authorization of DIP Agent

              	
                81

              
	 
      	
                Section
      11.2

              	 
      	
                DIP
      Agent and its Affiliates

              	
                81

              
	 
      	
                Section
      11.3

              	 
      	
                Action
      by DIP Agent

              	
                81

              
	 
      	
                Section
      11.4

              	 
      	
                Consultation
      with Experts

              	
                82

              
	 
      	
                Section
      11.5

              	 
      	
                Liability
      of DIP Agent; Credit Decision

              	
                82

              
	 
      	
                Section
      11.6

              	 
      	
                Indemnity

              	
                83

              
	 
      	
                Section
      11.7

              	 
      	
                Resignation
      of DIP Agent and Successor DIP Agent

              	
                83

              
	 
      	
                Section
      11.8

              	 
      	
                L/C
      Issuer and Swing Line Lender

              	
                83

              
	 
      	
                Section
      11.9

              	 
      	
                Authorization
      to Release or Subordinate or Limit Liens and to Release
      Guaranties

              	
                84

              
	 
      	
                Section
      11.10

              	 
      	
                Authorization
      to Enter into, and Enforcement of, the Collateral
Documents

              	
                84

              
	
                Section
      12.

              	
                Miscellaneous.

              	
                85

              
	 
      	
                Section
      12.1

              	 
      	
                Withholding
      Taxes

              	
                85

              
	 
      	
                Section
      12.2

              	 
      	
                No
      Waiver, Cumulative Remedies

              	
                86

              
	 
      	
                Section
      12.3

              	 
      	
                Non-Business
      Days

              	
                86

              
	 
      	
                Section
      12.4

              	 
      	
                Documentary
      Taxes

              	
                86

              
	 
      	
                Section
      12.5

              	 
      	
                Survival
      of Representations

              	
                86

              
	 
      	
                Section
      12.6

              	 
      	
                Survival
      of Indemnities

              	
                87

              
	 
      	
                Section
      12.7

              	 
      	
                Sharing
      of Set-Off

              	
                87

              
	 
      	
                Section
      12.8

              	 
      	
                Notices

              	
                87

              
	 
      	
                Section
      12.9

              	 
      	
                Counterparts

              	
                88

              
	 
      	
                Section
      12.10

              	 
      	
                Successors
      and Assigns

              	
                88

              
	 
      	
                Section
      12.11

              	 
      	
                Participants

              	
                88

              
	 
      	
                Section
      12.12

              	 
      	
                Assignments

              	
                89

              

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      
        	 
      	
                Section
      12.13

              	 
      	
                Amendments

              	
                91

              
	 
      	
                Section
      12.14

              	 
      	
                Headings

              	
                91

              
	 
      	
                Section
      12.15

              	 
      	
                Costs
      and Expenses; Indemnification

              	
                92

              
	 
      	
                Section
      12.16

              	 
      	
                Set-off

              	
                93

              
	 
      	
                Section
      12.17

              	 
      	
                Entire
      Agreement

              	
                94

              
	 
      	
                Section
      12.18

              	 
      	
                Governing
      Law

              	
                94

              
	 
      	
                Section
      12.19

              	 
      	
                Severability
      of Provisions

              	
                94

              
	 
      	
                Section
      12.20

              	 
      	
                Excess
      Interest

              	
                94

              
	 
      	
                Section
      12.21

              	 
      	
                Construction

              	
                95

              
	 
      	
                Section
      12.22

              	 
      	
                Lender’s
      and L/C Issuer’s Obligations Several

              	
                95

              
	 
      	
                Section
      12.23

              	 
      	
                Submission
      to Jurisdiction; Waiver of Jury Trial

              	
                95

              
	 
      	
                Section
      12.24

              	 
      	
                USA
      Patriot Act

              	
                95

              
	 
      	
                Section
      12.25

              	 
      	
                No
      Modification; No Discharge; Survival of Claims

              	
                95

              
	 
      	
                Section
      12.26

              	 
      	
                Pre-Petition
      BMO Loan Documents

              	
                96

              
	 
      	
                Section
      12.27

              	 
      	
                Bankruptcy
      Code Waivers

              	
                96

              
	 
      	
                Section
      12.28

              	 
      	
                Validation
      of Liens

              	
                96

              
	 
      	
                Section
      12.29

              	 
      	
                Confidentiality

              	
                96

              
	 
      	
                Section
      12.30

              	 
      	
                Disclosure

              	
                97

              
	 
      	
                Section 12.31

              	 
      	
                Amendment
      and Restatement

              	
                97

              

      

      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

     

    
      Exhibit A—Notice
of Payment Request

      Exhibit B—Notice
of Borrowing

      Exhibit C—Final
Financing Order

      Exhibit D-1—Revolving
Note

      Exhibit D-2—Swing
Note

      Exhibit E—Borrowing
Base Certificate

      Exhibit F—Compliance
Certificate

      Exhibit G—Additional
Guarantor Supplement

      Exhibit H—Assignment
and Acceptance

      Exhibit I—Material
Executory Contracts

       

      Schedule 1—Commitments

      Schedule 6.2—Subsidiaries

      Schedule 6.16—ERISA

      Schedule 8.7—Indebtedness
Outstanding on the Petition Date

      Schedule 8.8—Liens
Existing on the Petition Date

      Schedule 8.9(c)—Investments
Existing on the Petition Date

      Schedule 8.9(q)—Insurance
Subsidiaries’ Investment Policies on the Petition Date

      Schedule 8.13—ERISA
Plan Termination

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      Amended
and Restated Post-Petition Credit Agreement

       

      This
Amended and Restated Post-Petition Credit Agreement is entered into as of
December 31, 2008, by and 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 from time to
time party to this Agreement 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 (the Borrower and the
Guarantors, each a “Debtor” and collectively the
“Debtors”) in a case
pending under Chapter 11 of the Bankruptcy Code (the cases of the Borrower
and the Guarantors, each a “Chapter 11 Case” and,
collectively, the “Chapter 11 Cases”), the
several financial institutions from time to time party to this Agreement, as
Lenders, and Bank of Montreal, a Canadian chartered bank acting through its
Chicago branch, as DIP Agent as provided herein.  All capitalized
terms used herein without definition shall have the same meanings herein as such
terms are defined in Section 5.1 hereof.

       

      Preliminary
Statement

       

      On
December 1, 2008 (the “Petition Date”) the Debtors
filed voluntary petitions with the United States Bankruptcy Court for the
Northern District of Texas, Fort Worth Division, initiating the Chapter 11
Cases and have continued in possession of their assets and the management of
their businesses pursuant to Sections 1107 and 1108 of the Bankruptcy
Code;

       

      The
Borrower owns, directly or indirectly, all of the issued and outstanding capital
stock or other equity interests of each of the Guarantors;

       

      The
Debtors (other than To-Ricos and To-Ricos Distribution), the DIP Agent and the
Lenders have entered into a Post-Petition Credit Agreement dated as of
December 2, 2008 (the “Original DIP Credit
Agreement”) pursuant to which the Lenders may make loans and provide
other financial accommodations to the Borrower;

       

      The
Debtors, the DIP Agent and the Lenders wish to amend certain provisions of the
Original DIP Credit Agreement and, for the sake of clarity and convenience, to
amend and restate the Original DIP Credit Agreement on the terms and conditions
set forth herein.

       

      Now,
Therefore, in consideration of the mutual agreements contained herein, and other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto hereby agree as follows:

       

      
        	
                 
      

              	
                Section
      1.The Credit Facilities.

              

      

       

          Section
1.1   DIP
Commitments.  Subject to the terms and conditions hereof, each
Lender, by its acceptance hereof, severally agrees to make a loan or loans
(individually a “DIP
Loan” and collectively for all the Lenders the “DIP Loans”) in U.S. Dollars
to the Borrower from time to time on a revolving basis up to the amount of such
Lender’s DIP Commitment, subject to 

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      any
reductions thereof pursuant to the terms hereof, before the Termination
Date.  The sum of the aggregate principal amount of DIP Loans, Swing
Loans, and L/C Obligations at any time outstanding shall not exceed the lesser
of (i) the DIP Commitments in effect at such time and (ii) the
Borrowing Base as determined based on the most recent Borrowing Base
Certificate.  Each Borrowing of DIP Loans shall be made ratably by the
Lenders in proportion to their respective DIP Percentages.  DIP Loans
may be repaid and the principal amount thereof reborrowed before the Termination
Date, subject to the terms and conditions hereof.

       

          Section
1.2   Letters
of Credit.  (a) General
Terms.  Subject to the terms and conditions hereof, as part of
the DIP Credit, the L/C Issuer shall issue standby and commercial letters
of credit (each a “Letter of
Credit”) for the account of Borrower or for the account of the Guarantors
in an aggregate undrawn face amount up to the L/C Sublimit and for purposes that
are permitted under Section 8.19 hereof.  Each Letter of Credit
shall be issued by the L/C Issuer, but each Lender shall be obligated to
reimburse the L/C Issuer for such Lender’s DIP Percentage of the amount of
each drawing thereunder and, accordingly, each Letter of Credit shall constitute
usage of the DIP Commitment of each Lender pro rata in an amount equal to its
DIP Percentage of the L/C Obligations then outstanding.

       

          (b) 
Applications.  At
any time before the Termination Date, the L/C Issuer shall, at the request
of the Borrower, issue one or more Letters of Credit in U.S. Dollars, in a form
satisfactory to the L/C Issuer upon the receipt of an application duly
executed by the Borrower for the relevant Letter of Credit in the form then
customarily prescribed by the L/C Issuer for the Letter of Credit requested
(each an “Application”).  Each
Letter of Credit shall have an expiration date that is 30 days from the date of
its issuance and shall be automatically extended for an additional 30 days
unless the L/C Issuer gives the beneficiary thereof at least 30 days prior
written notice that the expiration date will not so extend beyond its then
scheduled expiration date, provided that in no event may the expiration date of
any Letter of Credit extend beyond the Maturity Date.  Any Letters of
Credit that expire after the Termination Date must be fully cash collateralized
on the Termination Date by cash held in a Cash Collateral Account and otherwise
under the exclusive control of the DIP Agent in an amount equal to 105% of the
maximum amount available to be drawn thereunder, or be supported by a letter of
credit issued by a bank acceptable to the Required Lenders and that is
satisfactory in form and substance to the Required Lenders.  The
L/C Issuer may give notice of non-renewal to the beneficiary of any Letter
of Credit issued hereunder at any time in its sole
discretion.  Notwithstanding anything contained in any Application to
the contrary:  (i) the Borrower shall pay fees in connection with
each Letter of Credit as set forth in Section 2.1(b) hereof,
(ii) except as otherwise provided in this Section and in
Section 1.8 hereof, unless an Event of Default exists, the L/C Issuer
will not call for the funding by the Borrower of any amount under a Letter of
Credit before being presented with a drawing thereunder, and (iii) if the
L/C Issuer is not timely reimbursed by the Borrower for the amount of any
drawing under a Letter of Credit on the date such drawing is paid, the
Borrower’s obligation to reimburse the L/C Issuer for the amount of such
drawing shall bear interest (which the Borrower hereby promises to pay) from and
after the date such drawing is paid at the Default Rate.  Unless the
DIP Agent or the Required Lenders instruct the L/C Issuer otherwise, the
L/C Issuer will give each beneficiary of a Letter of Credit notice of
non-renewal before the time necessary to prevent the automatic extension thereof
if before such required notice date:  (i) the expiration date of
such Letter of Credit if so extended would be after the Termination
Date,

      
        
           

        

        
          -2-

          
            

          

        

        
           

        

      

      (ii) the
DIP Commitments have been terminated, or (iii) a Default or an Event of
Default exists and either the DIP Agent or the Required Lenders (with notice to
the DIP Agent) have given the L/C Issuer instructions not to so permit the
extension of the expiration date of such Letter of Credit.  The
L/C Issuer shall also issue amendments to the Letter(s) of Credit
increasing the amount thereof at the request of the Borrower, subject to the
conditions of Section 7 hereof and the other terms of this
Section 1.2.  The Borrower shall provide to the DIP Agent cash
collateral in an amount equal to 105% of the maximum amount available to be
drawn under all Letters of Credit outstanding hereunder as part of a plan of
reorganization of the Borrower.

       

          (c) 
The Reimbursement
Obligations.  Subject to Section 1.2(b) hereof, the
obligation of the Borrower to reimburse the L/C Issuer for all drawings
under a Letter of Credit (a “Reimbursement Obligation”)
shall be governed by the Application related to such Letter of Credit, except
that reimbursement shall be made by no later than 2:00 p.m. (Chicago time) on
the date when each drawing is to be paid if the Borrower has been informed of
such drawing by the L/C Issuer on or before 10:00 a.m. (Chicago time)
on the date when such drawing is to be paid or, if notice of such drawing is
given to the Borrower after 10:00 a.m. (Chicago time) on the date when such
drawing is to be paid, by no later than 2:00 p.m. (Chicago time) on the
following Business Day, in immediately available funds at the DIP Agent’s
principal office in Chicago, Illinois, or such other office as the DIP Agent may
designate in writing to the Borrower (who shall thereafter cause to be
distributed to the L/C Issuer such amount(s) in like funds).  If
the Borrower does not make any such reimbursement payment on the date due and
the Participating Lenders fund their participations therein in the manner set
forth in Section 1.2(e) below, then all payments thereafter received by the
DIP Agent in discharge of any of the relevant Reimbursement Obligations shall be
distributed in accordance with Section 1.2(e) below.

       

          (d) 
Obligations
Absolute.  The Borrower’s obligation to reimburse L/C
Obligations as provided in subsection (c) of this Section shall be
absolute, unconditional and irrevocable, and shall be performed strictly in
accordance with the terms of this Agreement and the relevant Application under
any and all circumstances whatsoever and irrespective of (i) any lack of
validity or enforceability of any Letter of Credit or this Agreement, or any
term or provision therein, (ii) any draft or other document presented under a
Letter of Credit proving to be forged, fraudulent or invalid in any respect or
any statement therein being untrue or inaccurate in any respect, or (iii) any
other event or circumstance whatsoever, whether or not similar to any of the
foregoing, that might, but for the provisions of this Section, constitute a
legal or equitable discharge of, or provide a right of setoff against, the
Borrower’s obligations hereunder.  None of the DIP Agent, the Lenders,
or the L/C Issuer shall have any liability or responsibility by reason of
or in connection with the issuance or transfer of any Letter of Credit or any
payment or failure to make any payment thereunder (irrespective of any of the
circumstances referred to in the preceding sentence), or any error, omission,
interruption, loss or delay in transmission or delivery of any draft, notice or
other communication under or relating to any Letter of Credit (including any
document required to make a drawing thereunder), any error in interpretation of
technical terms or any consequence arising from causes beyond the control of the
L/C Issuer; provided that the foregoing shall not be construed to excuse
the L/C Issuer from liability to the Borrower to the extent of any direct
damages (as opposed to consequential damages, claims in respect of which are
hereby waived by the Borrower to the extent permitted by applicable law)
suffered by the Borrower that are caused by the L/C Issuer’s failure to
exercise care when determining whether 

      
        
           

        

        
          -3-

          
            

          

        

        
           

        

      

      drafts
and other documents presented under a Letter of Credit comply with the terms
thereof.  The parties hereto expressly agree that, in the absence of
bad faith, gross negligence or willful misconduct on the part of the
L/C Issuer (as finally determined by a court of competent jurisdiction),
the L/C Issuer shall be deemed to have exercised care in each such
determination.  In furtherance of the foregoing and without limiting
the generality thereof, the parties agree that, with respect to documents
presented which appear on their face to be in substantial compliance with the
terms of a Letter of Credit, the L/C Issuer may, in its sole discretion,
either accept and make payment upon such documents without responsibility for
further investigation, regardless of any notice or information to the contrary,
or refuse to accept and make payment upon such documents if such documents are
not in strict compliance with the terms of such Letter of Credit.

       

          (e) 
The Participating
Interests.  Each Lender (other than the Lender acting as
L/C Issuer in issuing the relevant Letter of Credit), by its acceptance
hereof, severally agrees to purchase from the L/C Issuer, and the
L/C Issuer hereby agrees to sell to each such Lender (a “Participating Lender”), an
undivided percentage participating interest (a “Participating Interest”), to
the extent of its DIP Percentage, in each Letter of Credit issued by, and each
Reimbursement Obligation owed to, the L/C Issuer and any Cash Collateral
therefor.  Upon any failure by the Borrower to pay any
Reimburse­ment Obligation at the time required on the date the related
drawing is to be paid, as set forth in Section 1.2(c) above, or if the
L/C Issuer is required at any time to return to the Borrower or to a
trustee, receiver, liquidator, custodian or other Person any portion of any
payment of any Reimbursement Obligation, each Participating Lender shall, not
later than the Business Day it receives a certificate in the form of
Exhibit A hereto from the L/C Issuer (with a copy to the DIP Agent) to
such effect, if such certificate is received before 1:00 p.m. (Chicago
time), or not later than 1:00 p.m. (Chicago time) the following Business
Day, if such certificate is received after such time, pay to the DIP Agent for
the account of the L/C Issuer an amount equal to such Participating
Lender’s DIP Percentage of such unpaid or recap­tured Reimbursement
Obligation together with interest on such amount accrued from the date the
related payment was made by the L/C Issuer to the date of such payment by
such Participating Lender at a rate per annum equal to:  (i) from
the date the related payment was made by the L/C Issuer to the date two
(2) Business Days after payment by such Participating Lender is due
hereunder, the Federal Funds Rate for each such day and (ii) from the date
two (2) Business Days after the date such payment is due from such
Participating Lender to the date such payment is made by such Participating
Lender, the Base Rate in effect for each such day.  Each such
Participating Lender shall thereafter be entitled to receive its DIP Percentage
of each payment received in respect of the relevant Reimbursement Obligation and
of interest paid thereon and any Cash Collateral therefor, with the
L/C Issuer retaining its DIP Percentage thereof as a Lender
hereunder.  The several obligations of the Participating Lenders to
the L/C Issuer under this Section 1.2 shall be absolute, irrevocable,
and unconditional under any and all circumstances whatsoever and shall not be
subject to any set-off, counterclaim or defense to payment which any
Participating Lender may have or have had against the Borrower, the
L/C Issuer, the DIP Agent, any Lender or any other Person
whatsoever.  Without
limiting the generality of the foregoing, such obligations shall not be affected
by any Default or Event of Default or by any reduction or termination of any DIP
Commitment of any Lender, and each payment by a Participating Lender under this
Section 1.2 shall be made without any offset, abatement, withholding or
reduction whatsoever. 

       

      
        
          
             

          

          
            -4-

            
              

            

          

          
             

          

        

      

       

          (f) 
Indemnification.  The
Participating Lenders shall, to the extent of their respective DIP Percentages,
indemnify the L/C Issuer (to the extent not reimbursed by the Borrower)
against any cost, expense (including reasonable counsel fees and disbursements),
claim, demand, action, loss or liability (except such as result from such
L/C Issuer’s gross negligence or willful misconduct) that the
L/C Issuer may suffer or incur in connection with any Letter of Credit
issued by it.  The obligations of the Participating Lenders under this
Section 1.2(f) and all other parts of this Section 1.2 shall survive
termination of this Agreement and of all Applications, Letters of Credit, and
all drafts and other documents presented in connection with drawings
thereunder.

       

          (g) 
Manner of Requesting a Letter
of Credit.  The Borrower shall provide at least five
(5) Business Days’ advance written notice to the DIP Agent of each request
for the issuance of a Letter of Credit, such notice in each case to be
accompanied by an Application for such Letter of Credit properly completed and
executed by the Borrower and, in the case of an extension (other than an
automatic extension) or amendment or an increase in the amount of a Letter of
Credit, a written request therefor, in a form acceptable to the DIP Agent and
the L/C Issuer, in each case, together with the fronting fee called for by
this Agreement.  The DIP Agent shall promptly notify the
L/C Issuer of the DIP Agent’s receipt of each such notice (and the
L/C Issuer shall be entitled to assume that the conditions precedent to any
such issuance, extension, amendment or increase have been satisfied unless
notified to the contrary by the DIP Agent or the Required Lenders) and the
L/C Issuer shall promptly notify the DIP Agent and the Lenders of the
issuance of the Letter of Credit so requested.

       

          (h) 
Replacement of the
L/C Issuer.  The L/C Issuer may be replaced at any
time by written agreement among the Borrower, the DIP Agent, the replaced
L/C Issuer and the successor L/C Issuer.  The DIP Agent
shall notify the Lenders of any such replacement of the
L/C Issuer.  At the time any such replacement shall become
effective, the Borrower shall pay all unpaid fees accrued for the account of the
replaced L/C Issuer.  From and after the effective date of any
such replacement (i) the successor L/C Issuer shall have all the
rights and obligations of the L/C Issuer under this Agreement with respect
to Letters of Credit to be issued thereafter and (ii) references herein to
the term “L/C Issuer” shall be
deemed to refer to such successor or to any previous L/C Issuer, or to such
successor and all previous L/C Issuers, as the context shall
require.  After the replacement of a L/C Issuer hereunder, the
replaced L/C Issuer shall remain a party hereto and shall continue to have
all the rights and obligations of a L/C Issuer under this Agreement with
respect to Letters of Credit issued by it prior to such replacement, but shall
not be required to issue additional Letters of Credit.

       

          Section
1.3   Applicable Interest
Rates.  (a) DIP Loans.  Each
DIP Loan made or maintained by a Lender shall bear interest (computed on the
basis of a year of 365 or 366 days, as the case may be, and the actual days
elapsed) on the unpaid principal amount thereof from the date such Loan is
advanced until maturity (whether by acceleration or otherwise) at a rate per
annum equal to the sum of eight percent (8.0%) plus the Base Rate from time to
time in effect, payable by the Borrower monthly in arrears on the last day of each calendar
month in each year (commencing
on the first such date occurring after the date hereof) and at maturity (whether
by acceleration or otherwise).

      

        
          
             

          

          
            -5-

            
              

            

          

          
             

          

        

         

            (b) 
Rate
Determinations.  The DIP Agent shall determine each interest
rate applicable to the Loans and the Reimbursement Obligations hereunder, and
its determination thereof shall be conclusive and binding except in the case of
manifest error.

         

            Section
1.4   Minimum
Borrowing Amounts.  Each Borrowing advanced shall be in an
amount not less than $1,000,000 or any greater amount which is an integral
multiple of $100,000.

         

            Section
1.5   Manner
of Borrowing DIP Loans.  (a) Notice to the DIP
Agent.  The Borrower shall give notice to the DIP Agent by no later
than 12:00 noon (Chicago time) on the date the Borrower requests the
Lenders to advance a Borrowing of DIP Loans.  The Borrower shall give
all such notices to the DIP Agent by telephone, telecopy, or other
telecommunication device acceptable to the DIP Agent (which notice shall be
irrevocable once given and, if by telephone, shall be promptly confirmed in
writing), substantially in the form attached hereto as Exhibit B (Notice of
Borrowing) or in such other form acceptable to the DIP Agent.  All
such notices shall specify the date of the requested advance (which shall be a
Business Day) and the amount of the requested Borrowing to be
advanced.  The Borrower agrees that the DIP Agent may rely on any such
telephonic, telecopy or other telecommunication notice given by any person the
DIP Agent in good faith believes is an Authorized Representative without the
necessity of independent investigation, and in the event any such notice by
telephone conflicts with any written confirmation such telephonic notice shall
govern if the DIP Agent has acted in reliance thereon.

         

            (b) 
Notice to the
Lenders.  The DIP Agent shall give prompt telephonic, telecopy
or other telecommunication notice to each Lender of any notice from the Borrower
received pursuant to Section 1.5(a) above.

         

            (c) 
Borrower’s Failure to
Notify.  In the event the Borrower fails to give notice
pursuant to Section 1.5(a) above of a Borrowing equal to the amount of a
Reimbursement Obligation and has not notified the DIP Agent by 12:00 noon
(Chicago time) on the day such Reimbursement Obligation becomes due that it
intends to repay such Reimbursement Obligation through funds not borrowed under
this Agreement, the Borrower shall be deemed to have requested a Borrowing of
DIP Loans under the DIP Credit on such day in the amount of the Reimbursement
Obligation then due, which Borrowing shall be applied to pay the Reimbursement
Obligation then due.

         

            (d) 
Disbursement of
Loans.  Not later than 1:00 p.m. (Chicago time) on the
date of any requested advance of a new Borrowing, subject to Section 7
hereof, each Lender shall make available its DIP Loan comprising part of such
Borrowing in funds immediately available at the principal office of the DIP
Agent in Chicago, Illinois (or at such other location as the DIP Agent shall
designate).  The DIP Agent shall make the proceeds of each new
Borrowing available to the Borrower at the DIP Agent’s principal office in
Chicago, Illinois (or at such other location as the DIP Agent shall designate),
by depositing or wire transferring such proceeds to the credit of the Borrower’s
Designated Disbursement Account or as the Borrower and the DIP Agent may
otherwise agree.

        
          
             

          

          
            -6-

            
              

            

          

          
             

          

        

         

            (e) 
DIP Agent Reliance on Lender
Funding.  Unless the DIP Agent shall have been notified by a
Lender prior to 1:00 p.m. (Chicago time) on the date on which such Lender
is scheduled to make payment to the DIP Agent of the proceeds of a DIP Loan
(which notice shall be effective upon receipt) that such Lender does not intend
to make such payment, the DIP Agent may assume that such Lender has made such
payment when due and the DIP Agent may in reliance upon such assumption (but
shall not be required to) make available to the Borrower the proceeds of the DIP
Loan to be made by such Lender and, if any Lender has not in fact made such
payment to the DIP Agent, such Lender shall, on demand, pay to the DIP Agent the
amount made available to the Borrower attributable to such Lender together with
interest thereon in respect of each day during the period commencing on the date
such amount was made available to the Borrower and ending on (but excluding) the
date such Lender pays such amount to the DIP Agent at a rate per annum equal
to:  (i) from the date the related advance was made by the DIP
Agent to the date two (2) Business Days after payment by such Lender is due
hereunder, the Federal Funds Rate for each such day and (ii) from the date
two (2) Business Days after the date such payment is due from such Lender
to the date such payment is made by such Lender, the Base Rate in effect for
each such day.  If such amount is not received from such Lender by the
DIP Agent immediately upon demand, the Borrower will, on demand, repay to the
DIP Agent the proceeds of the Loan attributable to such Lender with interest
thereon at a rate per annum equal to the interest rate applicable to the
relevant DIP Loan.

         

            Section
1.6   Swing
Loans.  (a) Generally.  Subject
to the terms and conditions hereof, as part of the DIP Credit, the Swing Line
Lender will make loans in U.S. Dollars to the Borrower under the Swing Line
(individually a “Swing
Loan” and collectively the “Swing Loans”) which shall not
in the aggregate at any time outstanding exceed the Swing Line
Sublimit.  Swing Loans may be availed of from time to time and
borrowings thereunder may be repaid and used again during the period ending on
the Termination Date.  Each Swing Loan shall be in a minimum amount of
$500,000 or such greater amount which is an integral multiple of
$100,000.

         

            (b) 
Interest on Swing
Loans.  Each Swing Loan shall bear interest until maturity
(whether by acceleration or otherwise) at a rate per annum equal to the sum of
the Base Rate plus eight percent (8%) (computed on the basis of a year of 365 or
366 days, as the case may be, for the actual number of days
elapsed).  Interest on each Swing Loan shall be due and payable by the
Borrower monthly in arrears on the last day of each calendar
month in each year (commencing on the first such date occurring after the date
hereof) and at maturity (whether by acceleration or otherwise).

         

            (c)  Requests for Swing
Loans.  The Borrower shall give the DIP Agent prior notice
(which may be written or oral) no later than 3:00 p.m. (Chicago time) on
the date upon which the Borrower requests that any Swing Loan be made, of the
amount and date of such Swing Loan.  Subject to the terms and
conditions hereof, the proceeds of each Swing Loan extended to the Borrower
shall be deposited or otherwise wire transferred to the Borrower’s Designated
Disbursement Account or as the Borrower, the DIP Agent, and the Swing Line
Lender may otherwise agree.  Anything contained in the foregoing to
the contrary notwithstanding, the undertaking of the Swing Line Lender to make
Swing Loans shall be subject to all of the terms and conditions of this
Agreement (provided that the Swing Line Lender shall be entitled
to

        
          
             

          

          
            -7-

            
              

            

          

          
             

          

        

         

         

         

         

         

        assume
that the conditions precedent to an advance of any Swing Loan have been
satisfied unless notified to the contrary by the DIP Agent or the Required
Lenders).

         

            (d) 
Refunding
Loans.  In its sole and absolute discretion, the Swing Line
Lender may at any time, on behalf of the Borrower (which hereby irrevocably
authorizes the Swing Line Lender to act on its behalf for such purpose) and with
notice to the Borrower and the DIP Agent, request each Lender to make a DIP Loan
in an amount equal to such Lender’s DIP Percentage of the amount of the Swing
Loans outstanding on the date such notice is given.  Regardless of the
existence of any Event of Default, each Lender shall make the proceeds of its
requested DIP Loan available to the DIP Agent for the account of the Swing Line
Lender), in immediately available funds, at the DIP Agent’s office in Chicago,
Illinois (or such other location designated by the DIP Agent), before 12 Noon
(Chicago time) on the Business Day following the day such notice is
given.  The DIP Agent shall promptly remit the proceeds of such
Borrowing to the Swing Line Lender to repay the outstanding Swing
Loans.

         

            (e) 
Participations.  If
any Lender refuses or otherwise fails to make a DIP Loan when requested by the
Swing Line Lender pursuant to Section 1.6(d) above for any reason, such
Lender will, by the time and in the manner such DIP Loan was to have been funded
to the Swing Line Lender, purchase from the Swing Line Lender an undivided
participating interest in the outstanding Swing Loans in an amount equal to its
DIP Percentage of the aggregate principal amount of Swing Loans that were to
have been repaid with such DIP Loans.  Each Lender that so purchases a
participation in a Swing Loan shall thereafter be entitled to receive its DIP
Percentage of each payment of principal received on the Swing Loan and of
interest received thereon accruing from the date such Lender funded to the Swing
Line Lender its participation in such Loan.  The several obligations
of the Lenders under this Section shall be absolute, irrevocable, and
unconditional under any and all circumstances whatsoever and shall not be
subject to any set-off, counterclaim or defense to payment which any Lender may
have or have had against the Borrower, any other Lender, or any other Person
whatsoever.  Without limiting the generality of the foregoing, such
obligations shall not be affected by any Default or Event of Default or by any
reduction or termination of the DIP Commitments of any Lender, and each payment
made by a Lender under this Section shall be made without any offset,
abatement, withholding, or reduction whatsoever.

         

            Section
1.7   Maturity of
Loans.  (a) DIP Loans.  Each
DIP Loan, both for principal and interest not sooner paid, shall mature and be
due and payable by the Borrower on the Termination Date.

         

            (b) 
Swing
Loans.  Each Swing Loan, both for principal and interest not
sooner paid, shall mature and be due and payable by the Borrower on the
Termination Date.

         

            Section
1.8   Prepayments.  (a) Optional.  The
Borrower may prepay in whole or in part
(but, if in part, then in an amount not less than $1,000,000 and in any event in
an amount such that the amount of such Borrowing that remains outstanding after
such prepayment is not less than $1,000,000) any Borrowing of Loans upon notice
delivered by the Borrower to the DIP Agent no later than 12:00 noon
(Chicago time) on the date of prepayment (or, in any case, such

        

          
            
               

            

            
              -8-

              
                

              

            

            
               

            

          

          

           

          shorter
period of time then agreed to by the DIP Agent), such prepayment to be made by
the payment of the principal amount to be prepaid.

           

              (b) 
Mandatory.  (i) If
any Dispositions or Events of Loss with respect to any Property that includes
any Pre-Petition BMO Primary Collateral, Pre-Petition CoBank Primary Collateral
or Collateral (in
an amount in excess of $1,000,000 in the aggregate) occur prior to the
Termination Date and outside the ordinary course of business (no such
Disposition to occur without Bankruptcy Court approval and with the Lenders
reserving all rights, if any, to object to any such Disposition), 100% of the
Net Proceeds thereof in excess of $1,000,000 (or any greater amount that is a
whole multiple of $250,000) in the aggregate (the “Prepayment Amount”) shall be
applied as follows:

           

          (A) 
First, to the costs, fees and expenses of the DIP Agent and the Lenders
(including without limitation the reasonable fees and expenses of their counsel
and other professionals, including those previously employed or retained by the
DIP Agent and the Lenders);

           

          (B) 
Second, to interest and fees then due and then to the prepayment of all
outstanding Loans and unreimbursed Reimbursement Obligations hereunder until all
such Loans and Reimbursement Obligations shall be fully paid (but without any
reduction in the DIP Commitments resulting from such prepayments);

           

          (C) 
Third, to be held by the DIP Agent in the Cash Collateral Account (including to
prefund outstanding Letters of Credit in an amount equal to 105% of the amount
of all such Letters of Credit) until released or applied pursuant to
Section 4.4 hereof (but without any reduction in the DIP Commitments
resulting from such prepayments); and

           

          (D) 
Fourth, as the Financing Order shall provide if then in effect and otherwise as
shall be determined by the Bankruptcy Court.

           

          Any such
proceeds of sale designated to pay such taxes and costs of sale which are not
required to be disbursed at the closing of such sale shall be held in escrow by
the DIP Agent and shall be subject to the Lien of the DIP Agent, the Lenders,
the Pre-Petition BMO Agent, the Pre-Petition BMO Lenders, the Pre-Petition
CoBank Agent and the Pre-Petition CoBank Lenders until applied to pay
such taxes and costs of sale and the amount of all obligations secured by
Permitted Liens that are senior to the DIP Agent’s in the Collateral and the
Replacement Liens.

           

          (ii) 
Prior to the Termination Date, all Available Unrestricted Cash (including
without limitation all Available Unrestricted Cash consisting of proceeds of the
inventory and proceeds of the accounts receivable of the Borrower and the
Guarantors and all Cash Collateral generated in the ordinary course of the
Borrower’s and the Guarantors’ businesses) determined as of 12:00 noon, Chicago
time, on any Business Day (other than amounts subject to Section 1.8(b)(i)
hereof) in excess of $15,000,000 shall be deposited in the Collection Accounts
referred to in Section 4.3 hereof
and applied daily as follows:

          
            
               

            

            
              -9-

              
                

              

            

            
               

            

          

          

           

          (A) 
First, to the costs, fees and expenses of the DIP Agent and the Lenders
(including without limitation the reasonable fees and expenses of their counsel
and other professionals, including those previously employed or retained by the
DIP Agent and the Lenders) that are then due and payable;

           

          (B) 
Second, to interest and fees then due and payable and then to the prepayment of
all outstanding Loans and unreimbursed Reimbursement Obligations hereunder until
all such Loans and Reimbursement Obligations shall be fully paid (but without
any reduction in the DIP Commitments resulting from such prepayments);
and

           

          (C) 
Third, to be held by the DIP Agent in the Cash Collateral Account (including to
prefund outstanding Letters of Credit in an amount equal to 105% of the amount
of all such Letters of Credit) until released or applied pursuant to
Section 4.4 hereof.

           

          (iii) 
The Borrower shall, on each date the DIP Commitments are reduced pursuant to
Section 1.11 hereof, prepay the DIP Loans, Swing Loans, and, if necessary,
prefund the L/C Obligations by the amount, if any, necessary to reduce the sum
of the aggregate principal amount of DIP Loans, Swing Loans, and L/C Obligations
then outstanding to the amount to which the DIP Commitments have been so
reduced.

           

          (iv) 
If at any time the sum of the unpaid principal balance of the DIP Loans, Swing
Loans, and the L/C Obligations then outstanding shall be in excess of the
lesser of the DIP Commitments then in effect and the Borrowing Base as
determined on the basis of the most recent Borrowing Base Certificate, the
Borrower shall immediately and without notice or demand pay over the amount of
the excess to the DIP Agent for the account of the Lenders as and for a
mandatory prepayment on such Post-Petition Obligations, with each such
prepayment first to be applied to the DIP Loans and Swing Loans until paid in
full with any remaining balance to be held by the DIP Agent in the Cash
Collateral Account as security for the Post-Petition Obligations owing with
respect to outstanding Letters of Credit.

           

          (v) 
Each prepayment of Loans under this Section 1.8(b) shall be made by the
payment of the principal amount to be prepaid.  Each prefunding of L/C
Obligations shall be made in accordance with Section 4.4
hereof.

           

              (b)  Any
amount of DIP Loans and Swing Loans paid or prepaid before the Termination Date
may, subject to the terms and conditions of this Agreement, be borrowed, repaid
and borrowed again.

           

              Section
1.9   Default
Rate.  Notwithstanding anything to the contrary contained
herein, while any Event of Default exists and is continuing or after
acceleration, the Borrower shall pay interest (after as well as before entry of
judgment thereon to the extent permitted by law) on the principal amount of all
Loans and Reimbursement Obligations, and letter of credit fees at a rate per
annum (the “Default
Rate”), equal to:

          
            
               

            

            
              -10-

              
                

              

            

            
               

            

          

          

           

          (a) 
for any Loan, the sum of 10.0% plus the Base Rate from time to time in
effect;

           

          (b) 
for any Reimbursement Obligation, the sum of 2.0% plus the amounts due under
Section 1.2 with respect to such Reimbursement Obligation; and

           

          (c) 
for any Letter of Credit, the sum of 2.0% plus the letter of credit fee due
under Section 2.1 with respect to such Letter of Credit.

           

          Interest
at the Default Rate shall be paid on demand of the DIP Agent at the request or
with the consent of the Required Lenders.  Any applicable stay shall
be deemed to be lifted to the extent necessary to permit the DIP Agent and the
Lenders to exercise their rights under this Section.

           

              Section
1.10   Evidence of
Indebtedness.  (a) Each Lender shall maintain in
accordance with its usual practice an account or accounts evidencing the
indebtedness of the Borrower to such Lender resulting from each Loan made by
such Lender from time to time, including the amounts of principal and interest
payable and paid to such Lender from time to time hereunder.

           

              (b)  The
DIP Agent shall also maintain accounts in which it will record (i) the
amount of each Loan made hereunder, (ii) the amount of any principal or
interest due and payable or to become due and payable from the Borrower to each
Lender hereunder and (iii) the amount of any sum received by the DIP Agent
hereunder from the Borrower and each Lender’s share thereof.

           

              (c)  The
entries maintained in the accounts maintained pursuant to paragraphs (a)
and (b) above shall be prima facie evidence, absent manifest error, of the
existence and amounts of the Post-Petition Obligations therein recorded;
provided, however, that the failure of the DIP Agent or any Lender to maintain
such accounts or any error therein shall not in any manner affect the obligation
of the Borrower to repay the Post-Petition Obligations in accordance with their
terms.

           

              (d)  Any
Lender may request that its Loans be evidenced by a promissory note or notes in
the forms of Exhibit D-1 (in the case of its DIP Loans and referred to
herein as a “Revolving
Note”), or D-2 (in the case of its Swing Loans and referred to herein as
a “Swing Note”), as
applicable (the Revolving Notes and Swing Note being hereinafter referred to
collectively as the “Notes” and individually as a
“Note”).  In
such event, the Borrower shall prepare, execute and deliver to such Lender a
Note payable to such Lender or its registered assigns in the amount of the
relevant DIP Commitment, or Swing Line Sublimit, as
applicable.  Thereafter, the Loans evidenced by such Note or Notes and
interest thereon shall at all times (including after any assignment pursuant to
Section 12.12) be represented by one or more Notes payable to the order of
the payee named therein or any assignee pursuant to Section 12.12, except
to the extent that any such Lender or assignee subsequently returns any such
Note for cancellation and requests that such Loans once again be evidenced as
described in subsections (a) and (b) above.

           

          Section
1.11   Commitment
Terminations.  (a) Optional DIP Credit
Terminations.  The Borrower shall have the right at any time
and from time to time, upon five (5) Business Days’ prior written notice to
the DIP Agent (or such shorter period of time agreed to by the DIP
Agent),

          
            
               

            

            
              -11-

              
                

              

            

            
               

            

          

          

           

          to
terminate the DIP Commitments without premium or penalty and in whole or in
part, any partial termination to be (i) in an amount not less than
$5,000,000 and
(ii) allocated ratably among the Lenders in proportion to their respective
DIP Percentages, provided that the DIP Commitments may not be reduced to an
amount less than the sum of the aggregate principal amount of DIP Loans, Swing
Loans, and L/C Obligations then outstanding (after giving effect to any
concurrent prepayments).  Any termination of the DIP Commitments below
the L/C Sublimit or the Swing Line Sublimit then in effect shall reduce the
L/C Sublimit and Swing Line Sublimit, as applicable, by a like
amount.  The DIP Agent shall give prompt notice to each Lender of any
such termination of the DIP Commitments.

           

              (b)  Any
termination of the DIP Commitments pursuant to this Section 1.11 may not be
reinstated.

           

              Section
1.12   Guaranties.  The
payment and performance of the Post-Petition Obligations, shall at all times be
guaranteed by each direct and indirect Domestic Subsidiary of the Borrower that
is a Debtor in a Chapter 11 Case and To-Ricos and To-Ricos Distribution pursuant
to Section 10 hereof or pursuant to one or more guaranty agreements in form
and substance acceptable to the DIP Agent, as the same may be amended, modified
or supplemented from time to time (individually a “Guaranty” and, collectively,
the “Guaranties,” and
each such Subsidiary executing and delivering this Agreement as a Guarantor
(including any Subsidiary hereafter executing and delivering an Additional
Guarantor Supplement substantially in the form of Exhibit G hereto) or a
separate Guaranty, a “Guarantor” and, collectively,
the “Guarantors”).

           

              Section
1.13   Substitution of
Lenders.  Notwithstanding anything to the contrary contained in
Section 12.13, in the event that the Borrower requests that this Agreement
be modified or amended in a manner which would require the unanimous consent of
all of the Lenders and such modification or amendment is agreed to by the
Super-majority Lenders, then with the consent of the Borrower and the
Super-majority Lenders, the Borrower, the DIP Agent and the Super-majority
Lenders shall be permitted to amend this Agreement without the consent of the
Lender or Lenders which did not agree to the modification or amendment requested
by the Borrower (such Lender or Lenders, collectively the “Minority Lenders”) to provide
for (w) the termination of the DIP Commitment of each of the Minority Lenders,
(x) the addition to this Agreement of one or more other financial institutions
(each of which shall be an Eligible Assignee), or an increase in the DIP
Commitment of one or more of the Super-majority Lenders, so that the DIP
Commitments after giving effect to such amendment shall be in the same amount as
the DIP Commitments immediately before giving effect to such amendment, (y) if
any Loans are outstanding at the time of such amendment, the making of such
additional Loans by such new financial institutions or Super-majority Lender or
Lenders, as the case may be, as may be necessary to repay in full the
outstanding Loans of, and all other amounts owed under the Loan Documents to,
the Minority Lenders immediately before giving effect to such amendment and (z)
such other modifications to this Agreement as may be appropriate.

           

          
            	
                     
      

                  	
                    Section
      2.Fees.

                  

          

          Section
2.1   Fees.  (a) DIP Commitment
Fee.  The Borrower shall pay to the DIP Agent for the ratable
account of the Lenders in accordance with their DIP Percentages a
commitment

          
            
               

            

            
              -12-

              
                

              

            

            
               

            

          

           

           

          fee at
the rate per annum equal to one-half of one percent (0.50%) (computed on the
basis of a year of 360 days and the actual number of days elapsed) on the
average daily Unused DIP Commitments.  Such commitment fee shall be
payable monthly in arrears on the last day of each calendar
month in each year (commencing on the first such date occurring after the date
hereof) and on the Termination Date, unless the DIP Commitments are terminated
in whole on an earlier date, in which event the commitment fee for the period to
the date of such termination in whole shall be paid on the date of such
termination.

           

              (b) 
Letter of Credit
Fees.  On the date of issuance, renewal or extension, or
increase in the amount, of any Letter of Credit pursuant to Section 1.2
hereof, the Borrower shall pay to the L/C Issuer for its own account a
fronting fee equal to 0.25% of the face amount of (or of the increase in the
face amount of) such Letter of Credit.  Monthly in arrears, on the
last day of each calendar month, commencing on the first such date occurring
after the date hereof, the Borrower shall pay to the DIP Agent, for the ratable
benefit of the Lenders in accordance with their DIP Percentages, a letter of
credit fee at a rate per annum equal to 3.00% (computed on the basis of a year
of 360 days and the actual number of days elapsed) in effect during each
day of such month applied to the daily average face amount of Letters of Credit
outstanding during such month.  In addition, the Borrower shall pay to
the L/C Issuer for its own account the L/C Issuer’s standard issuance,
drawing, negotiation, amendment, assignment, and other administrative fees for
each Letter of Credit as established by the L/C Issuer from time to
time.

           

              (c) 
Closing
Fee.  The Borrower shall pay to the DIP Agent for the ratable
account of the Lenders a non-refundable closing fee in an amount equal to 2.5%
(inclusive of any portion of such closing fee paid in connection with the
execution and delivery by the Lenders of their commitment letters relating to
the DIP Credit Facility) of the aggregate amount of the DIP Commitments on the
Closing Date.  Such fee shall be payable in full no later than the
Closing Date.

           

              (d) 
DIP Agent
Fees.  The Borrower shall pay to the DIP Agent, for its own use
and benefit, a non-refundable fee in the amount of $125,000 payable in full upon
the entry of the Interim Financing Order.

           

              (e) 
Audit
Fees.  The Borrower shall pay to the DIP Agent for its own use
and benefit reasonable out-of-pocket costs and expenses for audits of the
Collateral performed by the DIP Agent or its agents or representatives in such
amounts as the DIP Agent may from time to time request (the DIP Agent
acknowledging and agreeing that such charges shall be computed in the same
manner as it at the time customarily uses for the assessment of charges for
similar collateral audits).

           

          
            	
                     
      

                  	
                    Section
      3.Place and Application of Payments

                  

          

          Section
3.1   Place and Application of
Payments.  All payments of principal of and interest on the
Loans and the Reimbursement Obligations, and of all other Post-Petition
Obligations payable by the Borrower under this Agreement and the other Loan
Documents, shall be made by the Borrower to the DIP Agent by no later than
1:00 p.m. (Chicago time) on the due date thereof at the office of the DIP
Agent in Chicago, Illinois (or such other location as the DIP

          
            
               

            

            
              -13-

              
                

              

            

            
               

            

          

          

           

          Agent may
designate in writing to the Borrower), for the benefit of the Lender(s) or
L/C Issuer entitled thereto.  Any payments received after such
time shall be deemed to have been received by the DIP Agent on the next Business
Day.  All such payments shall be made in U.S. Dollars, in immediately
available funds at the place of payment, in each case without set-off or
counterclaim.  The DIP Agent will promptly thereafter cause to be
distributed like funds relating to the payment of principal or interest on Loans
and on Reimbursement Obligations in which the Lenders have purchased
Participating Interests ratably to the Lenders and like funds relating to the
payment of any other amount payable to any Lender to such Lender, in each case
to be applied in accordance with the terms of this Agreement.  If the
DIP Agent causes amounts to be distributed to the Lenders in reliance upon the
assumption that the Borrower will make a scheduled payment and such scheduled
payment is not so made, each Lender shall, on demand, repay to the DIP Agent the
amount distributed to such Lender together with interest thereon in respect of
each day during the period commencing on the date such amount was distributed to
such Lender and ending on (but excluding) the date such Lender repays such
amount to the DIP Agent, at a rate per annum equal to:  (i) from
the date the distribution was made to the date two (2) Business Days after
payment by such Lender is due hereunder, the Federal Funds Rate for each such
day and (ii) from the date two (2) Business Days after the date such
payment is due from such Lender to the date such payment is made by such Lender,
the Base Rate in effect for each such day.

           

          On or
after the occurrence of the Termination Date, all payments and collections from
Collateral (including Dispositions) shall be applied: first, to pay the
Administrative Expense Carve-Out, second to the costs, fees and expenses of the
DIP Agent and the Lenders; third, to interest and fees and then to repay the
Loans and other Post-Petition Obligations outstanding under this Agreement;
fourth, to provide cash collateral for Letters of Credit outstanding under this
Agreement in an amount equal to 105% of the maximum amount available to be drawn
under all such Letters of Credit; fifth, to reduce the Pre-Petition BMO
Obligations under the Pre-Petition BMO Credit Agreement and the Pre-Petition
CoBank Obligations under the Pre-Petition CoBank Credit Agreement according to
the priorities of their respective Replacement Liens therein and otherwise on
the basis set forth in the Pre-Petition BMO Credit Agreement and the
Pre-Petition CoBank Credit Agreement; and then, to the Borrower (or relevant
Debtor) or as otherwise required by applicable law pursuant to an order of the
Bankruptcy Court.

           

              Section
3.2   Account
Debit.  The Borrower hereby irrevocably authorizes the DIP
Agent to charge any of the Borrower’s deposit accounts maintained with the DIP
Agent for the amounts from time to time necessary to pay any then due
Post-Petition Obligations; provided that the Borrower
acknowledges and agrees that the DIP Agent shall not be under an obligation to
do so and the DIP Agent shall not incur any liability to the Borrower or any
other Person for the DIP Agent’s failure to do so.

           

          
            	
                     
      

                  	
                    Section
      4.The Collateral.

                  

          

           

              Section
4.1   Security.  As
collateral security for the prompt and complete payment and performance when due
(whether at stated maturity, by acceleration or otherwise) of the Post-Petition
Obligations and to induce the Lenders to make the DIP Credit available to
the

           

          
            
              
              

            

            
              -14-

              
                

              

            

            
              
              

            

          

           

          Borrower
in accordance with the terms hereof, the Borrower and each of the Guarantors
hereby assigns, creates, grants, conveys, mortgages, pledges, hypothecates and
transfers to the DIP Agent for the ratable benefit of the Lenders, first
priority Liens (subject to the Administrative Expense Carve-Out and Permitted
Liens permitted by, and with the priority established by, the Final Financing
Order), in accordance with Sections 364(c) and (d) of the Bankruptcy Code
in all right, title and interest of the Borrower and each of the Guarantors in
and to any and all Property, assets and things of value of every kind or type,
tangible, intangible, real, personal and fixed, whether now owned or hereafter
acquired and wherever located, including, without limitation, real property
(including without limitation all leasehold interests, mineral leases, and
mineral and water rights), the Cash Collateral Account and all other deposit
accounts, accounts, chattel paper (including electronic chattel paper),
instruments, documents (including electronic documents of title), all of the
Debtors’ rights and claims relating to all deposits and reserves held by
utilities and trade creditors,  inventory, farm products, rights
against contract growers, equipment, rolling stock (including titled and
non-titled vehicles), general intangibles (including, without limitation,
payment intangibles, intellectual property, interests in partnerships and joint
ventures (unless prohibited, in which case the DIP Agent for the benefit of the
Lenders shall have a Lien on the proceeds of such interests)), tax refunds,
letter of credit rights, supporting obligations, commercial tort claims, and
investment property (other than any equity interests of Avicola that is part of
the Avicola Pre-Petition Collateral, but including in the Collateral any
proceeds of any sale or other Disposition of such equity interests to which any
Debtor may be entitled after the payment in full of the Avicola Pre-Petition
Obligations), and, to the extent not otherwise included, (a) all proceeds
of each of the foregoing, (b) all accessions to, substitutions and
replacements (including any Property repaired, rebuilt or replaced with casualty
insurance proceeds and condemnation awards) for, and insurance and condemnation
proceeds, rents, profits and products of each of the foregoing, (c) the
Pre-Petition BMO Collateral and the Pre-Petition CoBank Collateral, and
(d) all Property of the Borrower and each of the Guarantors held by the DIP
Agent or any Lender, including without limitation, the funds from time to time
on deposit in the Collection Accounts referred to in Section 4.3 hereof,
any funds held in escrow by the DIP Agent pursuant to the last sentence of
Section 1.8(b)(i) hereof and all other Property of every description, now
or hereafter in the possession or custody of or in transit to the DIP Agent or
any Lender for any purpose, including safekeeping, collection or pledge, for the
account of the Borrower or any Guarantor or as to which the Borrower or any
Guarantor may have any right or power (all of the foregoing, the “Collateral”), provided that
the Collateral shall not include any of (i) the stock of first-tier Foreign
Subsidiaries of the Borrower, other than first-tier Foreign Subsidiaries of the
Borrower that are Debtors, in excess of 65% of the total combined voting power
of such Foreign Subsidiaries, or any stock in any Subsidiary of any first-tier
Foreign Subsidiaries of the Borrower, (ii) Property of any Debtor with
respect to which the consent of a third party is required for the pledge
thereof, except to the extent permitted by the Uniform Commercial Code,
(iii) the Avicola Pre-Petition Collateral, or (iv) the recoveries on
claims and causes of action brought under Chapter 5 of the Bankruptcy
Code.

          
             

          

              Section
4.2   Perfection of Security
Interests.  (a) At the request of the DIP Agent or the
Required Lenders and at the Borrower’s expense, the Borrower and each of the
Guarantors shall (i) execute and deliver to the DIP Agent documentation
satisfactory to the DIP Agent or the Required Lenders evidencing the Liens
granted hereby, providing for the perfection of such Liens and evidencing that
the automatic stay provisions of Section 362 of the Bankruptcy Code have

           

          
            
              
              

            

            
              -15-

              
                

              

            

            
              
              

            

          

           

          been
modified to permit the execution, delivery and filing of such documentation, and
(ii) perform or take any and all steps at any time necessary to perfect,
maintain, protect and enforce the DIP Agent’s Lien on the Collateral; provided,
however, that no such documentation shall be required as a condition to the
validity, priority or perfection of any of the Liens created pursuant to this
Agreement which security interests and liens shall be deemed valid and properly
perfected upon approval by the Bankruptcy Court of the Financing Order; provided
further that no such documentation shall be filed in any jurisdiction with a
mortgage, stamp, intangibles or similar tax.

           

              (b) 
Until all Post-Petition Obligations and Adequate Protection Obligations have
been satisfied and paid in full in cash by the Debtors and the DIP Commitments
shall have terminated, the DIP Agent’s security interest in the Collateral as
security for such obligations shall continue in full force and
effect.

           

              (c) 
Notwithstanding the provisions of Section 4.2(a) hereof, or failure on the
part of the Borrower, any Guarantor, the DIP Agent or any Lender to perfect,
maintain, protect or enforce the DIP Agent’s Lien on the Collateral, the
Financing Order shall automatically, and without further action by any Person,
perfect the DIP Agent’s Lien against the Collateral.

           

              Section
4.3   Receivables and Inventory
Collections.  The Borrower and the Guarantors agree to
continue, or if appropriate, forthwith make, such arrangements as shall be
necessary or appropriate to assure that all proceeds of the inventory and
accounts receivable of the Borrower and the Guarantors and any other Cash
Collateral generated after the Closing Date but prior to the Termination Date
not required for the payment of normal operating expenses of the Borrower and
the Guarantors consistent, in amount and type of expenditure, with the Budget
are deposited (in the same form as received) in an account maintained with the
DIP Agent or accounts under the control of the DIP Agent (including local petty
cash accounts and local payroll accounts approved by the DIP Agent (the “Petty Cash and Payroll
Accounts”)), which provide for collections therein to be transmitted,
upon the DIP Agent’s request, to an account maintained with or otherwise under
the exclusive dominion and control of the DIP Agent, all such accounts
maintained with or under the control of the DIP Agent to constitute special
restricted accounts (each a “Collection Account” and
collectively the “Collection
Accounts”).   The Borrower acknowledges on behalf of
itself and the Guarantors that the DIP Agent has (and is hereby granted to the
extent that it does not already have) a Lien for the ratable benefit of the
Lenders on each of the Collection Accounts and all funds contained therein to
secure the Post-Petition Obligations and Adequate Protection Obligations,
subject to the provisions of the Financing Order and the Bankruptcy
Code.  Cash held in the Collection Accounts shall constitute Cash
Collateral subject to the Financing Order (if in effect) and otherwise as the
Bankruptcy Court shall determine.  Any applicable stay shall be deemed
to be lifted to the extent necessary to permit the DIP Agent and the Lenders to
exercise their rights under this Section 4.3.

           

              Section
4.4   Cash
Collateral Account.  (a) All Cash Collateral and other
amounts referred to in Section 1.8(b)(ii) shall be deposited by the Debtors
in one or more accounts subject to the DIP Agent’s first priority perfected Lien
and, if at any time required by the DIP Agent, under its exclusive dominion and
control (collectively, the “Cash Collateral
Account”).  Such funds shall be held in the Cash Collateral
Account until such time as the amounts held therein are 

           

          
            
              
              

            

            
              -16-

              
                

              

            

            
              
              

            

          

           

          applied
by the relevant Debtor to pay normal operating expenses consistent with the
Budget and the Interim Financing Order and any Final Financing Order or as the
DIP Agent shall otherwise require, except that the Net Proceeds of Dispositions
shall be applied as set forth in Section 1.8(b)(i) hereof.  So
long as no Event of Default shall have occurred and be continuing, amounts held
in the Cash Collateral Account shall be made available to the relevant Debtor to
pay normal operating expenses consistent, in amount and type of expenditure,
with the Budget.  During the existence of an Event of Default all
amounts held in the Cash Collateral Account shall be applied as required by the
second paragraph of Section 3.1.

           

              (b)  If
the prepayment of the amount available for drawing under any or all outstanding
Letters of Credit is required by this Agreement (including under
Sections 1.8(b), 1.2(b) or 9.2), the Borrower shall forthwith pay the
amount required to be so prepaid, to be held by the DIP Agent in a separate Cash
Collateral Account as security for, and for application by the DIP Agent (to the
extent available) to, the reimbursement of any payment under any Letter of
Credit then or thereafter made by the L/C Issuer until all Reimbursement
Obligations have been paid in full and no Letters of Credit remain outstanding,
and thereafter to be applied as provided in
Section 4.4(a).  Notwithstanding the foregoing, so long as no
Default or Event of Default shall have occurred and be continuing, amounts held
in the Cash Collateral Account pursuant to this Section 4.4(b) shall be
made available to the relevant Debtor to pay normal operating expenses
consistent, in amount and type of expenditure, with the
Budget.  During the existence of a Default or Event of Default all
amounts held in such Cash Collateral Account shall be applied as required by the
second paragraph of Section 3.1.

           

              Section
4.5   Rights
of DIP Agent.  The DIP Agent may, or upon the direction of the
Required Lenders, shall, in each case at any time on or after the Termination
Date, after three (3) Business Days’ prior written notice to the Borrower of its
intention to do so, notify Account Debtors, parties to contracts with the
Borrower or any Guarantor, obligors on instruments of the Borrower or any
Guarantor and obligors in respect of chattel paper of the Borrower or any
Guarantor that the right, title and interest of the Borrower and the Guarantors
in and under such accounts, such contracts, such instruments and such chattel
paper have been assigned to the DIP Agent and that payments shall be made
directly to the DIP Agent.  Upon the request of the DIP Agent or the
Required Lenders on or after the Termination Date, the Borrower and the
Guarantors will so notify such Account Debtors, such parties to contracts,
obligors on such instruments and obligors in respect of such chattel
paper.  Upon the occurrence and during the continuation of a Default
or an Event of Default, the DIP Agent may in its own name or in the name of
others communicate with such parties to such accounts, such contracts, such
instruments and such chattel paper to verify with such Persons to the DIP
Agent’s satisfaction the existence, amount and terms of any such accounts,
contracts, instruments or chattel paper.

           

              Section
4.6   Performance by DIP Agent of Debtors’
Post-Petition Obligations.  If the Borrower or any Guarantor
fails to perform or comply with any of its agreements contained in this
Agreement, the other Loan Documents or the Financing Order and the DIP Agent, as
provided for by the terms of this Agreement, shall itself perform or comply, or
otherwise cause performance or compliance, with such agreement, the reasonable
expenses of the DIP Agent incurred in connection with such performance or
compliance, together with interest thereon at the rate per annum determined by
adding 10% to the Base Rate as from time to time in effect, shall

           

          
            
              
              

            

            
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          be
payable by the Debtors to the DIP Agent on demand and shall constitute
Post-Petition Obligations secured by the Collateral.  Moreover,
neither the DIP Agent nor any Lender shall in any way be responsible for the
payment of any costs incurred in connection with preserving or disposing of
Collateral pursuant to Section 506(c) of the Bankruptcy Code, and the
Collateral may not be charged for the incurrence of any such cost.

           

              Section
4.7   DIP
Agent’s Appointment as Attorney-in-Fact.  (a) The Borrower
and each of the Guarantors hereby irrevocably constitutes and appoints the DIP
Agent and any officer of DIP Agent, with full power of substitution, as its true
and lawful attorney-in-fact with full irrevocable power and authority in the
place and stead of the Borrower and each of the Guarantors and in the name of
the Borrower or such Guarantor or in the DIP Agent’s own name, from time to time
in the DIP Agent’s discretion, for the purpose of collecting the Post-Petition
Obligations when due in accordance with the provisions of this Agreement, to
take any and all appropriate action and to execute and deliver any and all
documents and instruments which may be necessary and desirable to accomplish
such purpose, and, without limiting the generality of the foregoing, hereby
gives the DIP Agent the power and right, on behalf of the Borrower and the
Guarantors, without notice to or assent from them, to do the
following:

           

          (i) 
to ask, demand, collect, receive and give acquittances and receipts for any and
all monies due and to become due under any Collateral and, in the name of the
Borrower or any Guarantor or the DIP Agent’s own name or otherwise, to take
possession of and endorse and collect any checks, drafts, notes, acceptances or
other instruments for the payment of monies due under any Collateral and to file
any claim or to take any other action or proceeding in any court of law or
equity or otherwise deemed appropriate by the DIP Agent for the purpose of
collecting any and all monies due under any Collateral whenever payable and to
file any claims or to take any other action or proceeding in any court of law or
equity or otherwise deemed appropriate by the DIP Agent for the purpose of
collecting any and all such monies due under any Collateral whenever
payable;

           

          (ii) 
to pay or discharge taxes, liens, security interests or other encumbrances
levied or placed on or threatened against the Collateral, to effect any repairs
or procure any insurance called for by the terms of this Agreement and to pay
all or any part of the premiums therefor and the costs thereof, in each case
which are not stayed pursuant to the Chapter 11 Cases or which are not being
contested in accordance with this Agreement; and

           

          (iii) 
(A) to direct any party liable for any payment under any of the Collateral
to make payment of any and all monies due, and to become due, and to become due
thereunder, directly to the DIP Agent or as the DIP Agent shall direct;
(B) to receive payment of and receipt for any and all monies, claims and
other amounts due and to become due at any time in respect of or arising out of
any Collateral; (C) to sign and endorse any invoices, freight or express
bills, bills of lading, storage or warehouse receipts, drafts against the
Borrower or any Guarantor, assignments, verifications and notices in connection
with accounts and other documents constituting or relating to the Collateral;
(D) to commence and prosecute any suits, actions or proceedings at law or
equity in any court of competent jurisdiction to collect the Collateral or any
part thereof 

           

          
            
              
              

            

            
              -18-

              
                

              

            

            
              
              

            

          

           

          and to
enforce any other right in respect of any Collateral; (E) to defend any
suit, action or proceeding brought against the Borrower or any Guarantor with
respect to any Collateral; (F) to settle, compromise or adjust any suit,
action or proceeding described above and, in connection therewith, to give such
discharges or releases as the DIP Agent or the Required Lenders may deem
appropriate; (G) to license or, to the extent permitted by an applicable
license, sublicense, whether general, special or otherwise, and whether on an
exclusive or non-exclusive basis, any trademark, throughout the world for such
term or terms, on such conditions, and in such manner, as the DIP Agent or the
Required Lenders shall in its or their sole discretion determine is appropriate
to liquidate the Collateral; and (H) generally to sell, transfer, pledge,
make any agreement with respect to or otherwise deal with any of the Collateral
as fully and completely as though the DIP Agent were the absolute owner thereof
for all purposes, and to do, at the option of the DIP Agent and at the
Borrower’s expense, at any time, or from time to time, all acts and things which
the DIP Agent reasonably deems necessary to protect, preserve or realize upon
the Collateral and the DIP Agent’s lien therein, in order to effect the intent
of this Agreement, all as fully and effectively as the Borrower and the
Guarantors might do.

           

              (b)  The
DIP Agent agrees that it will forbear from exercising the power of attorney or
any rights granted to it pursuant to this Section until after the
Termination Date or upon the occurrence and during the continuation of a Default
or Event of Default.  The Borrower and the Guarantors hereby ratify,
to the extent permitted by law, all that said attorneys shall lawfully do or
cause to be done by virtue hereof.  The power of attorney granted
pursuant to this Section is a power coupled with an interest and shall be
irrevocable until the Post-Petition Obligations and the Adequate Protection
Obligations are paid in full in cash and the DIP Commitments have
terminated.

           

              (c)  The
powers conferred on the DIP Agent hereunder are solely to protect the DIP
Agent’s and the Lenders’ interests in the Collateral and shall not impose any
duty upon any of them to exercise any such powers.  The DIP Agent
shall be accountable only for amounts that it actually receives as a result of
the exercise of such powers and neither it nor any of its officers, directors,
employees or agents shall be responsible to the Borrower and the Guarantors for
any act or failure to act, except for its or their own gross negligence or
willful misconduct.

           

              (d)  The
Borrower and each Guarantor also authorize the DIP Agent, at any time and from
time to time on and after the Termination Date or upon the occurrence and during
the continuation of a Default or Event of Default, (i) to communicate, in
the name of the Borrower or such Guarantor or in the DIP Agent’s own name (at
the DIP Agent’s option), with any party to any contract with regard to the
assignment of the right, title and interest of the Borrower or such Guarantor in
and under the contracts hereunder and other matters relating thereto and
(ii) to execute any endorsements, assignments or other instruments or
conveyance or transfer with respect to the Collateral.

           

          
            	
                     
      

                  	
                    Section
      5.Definitions; Interpretation.

                  

          

           

              Section
5.1   Definitions.  The
following terms when used herein shall have the following meanings:

           

          
            
              
              

            

            
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          “Account Debtor” means any
Person obligated to make payment on any Receivable.

           

          “Act” shall have the meaning
set forth in Section 12.24 hereof.

           

          “Administrative Questionnaire”
means an Administrative Questionnaire in a form supplied by the DIP
Agent.

           

          “Adequate Protection
Obligations” means all present and future obligations of the Debtors
under any order or orders of the Bankruptcy Court to pay interest, fees, costs,
expenses and charges on or with respect to the Pre-Petition BMO Obligations and
the Pre-Petition CoBank Obligations under Sections 361 and 506(b) of the
Bankruptcy Code, to compensate the Pre-Petition BMO Lenders and the Pre-Petition
BMO Agent for the post-petition use for and to the extent of the post-petition
use of Pre-Petition BMO Collateral and proceeds thereof and for any
post-petition diminution in value of Pre-Petition BMO Collateral, to compensate
the Pre-Petition CoBank Lenders and the Pre-Petition CoBank Agent for the
post-petition use for and to the extent of the post-petition use of Pre-Petition
CoBank Collateral and proceeds thereof and for any post-petition diminution in
value of Pre-Petition CoBank Collateral and to provide the Replacement Liens as
contemplated by this Agreement and the Financing Orders.

           

          “Administrative Expense
Carve-Out” means (a) $5,000,000 for the payment of costs of winding
up the Chapter 11 Cases and professional fees and disbursements of the Debtors’
professionals and the professionals of any official committee appointed in the
Chapter 11 Cases incurred after the Termination Date (to the extent allowed by
the Bankruptcy Court) plus (b) professional fees and disbursements incurred
or accrued and pending applications for professional fees and disbursements of
the Debtors’ professionals and the professionals of any official committee
appointed in the Chapter 11 Cases (to the extent allowed at any time by the
Bankruptcy Court, whether or not included in the Budget) prior to the
Termination Date and U.S. Trustee fees pursuant to 28 U.S.C. Section 1930
(collectively, the “Carve-Out
Amount”), provided that no part of the Administrative Expense Carve-Out
shall be used to object to or contest any post-petition lien or Post-Petition
Obligations or to challenge (as opposed to investigate) any pre-petition lien of
the Pre-Petition BMO Agent or the Pre-Petition BMO Lenders or to otherwise seek
affirmative relief against the DIP Agent, the Lenders, the Pre-Petition BMO
Agent or the Pre-Petition BMO Lenders.

           

          “Affiliate” means any Person
directly or indirectly controlling or controlled by, or under direct or indirect
common control with, another Person.  A Person shall be deemed to
control another Person for purposes of this definition if such Person possesses,
directly or indirectly, the power to direct, or cause the direction of, the
management and policies of the other Person, whether through the ownership of
voting securities, common directors, trustees or officers, by contract or
otherwise; provided
that, (a) in any event for purposes of this definition, any Person
that owns, directly or indirectly, 10% or more of the voting power of the Voting
Stock of a corporation or 10% or more of the voting power of the partnership or
other ownership interest of any other Person (other than as a limited partner of
such other Person) will be deemed to control such corporation or other Person,
and (b) in no event shall the Pre-Petition BMO Agent, any Pre-Petition BMO
Lender, the Pre-Petition CoBank Agent or any Pre-Petition CoBank Lender be an
Affiliate solely as a result of any interest in any capital stock of the
Borrower it may have or 

           

          
            
              
              

            

            
              -20-

              
                

              

            

            
              
              

            

             

            acquire
as a result of any action taken against Pilgrim Interests, including without
limitation any action to enforce the Pre-Petition BMO Guaranty.

          

           

          “Agreed Upon Values” means
(a) $1.50 per head for breeder hens and cockerels, (b) $1.00 per head
for breeder pullets, (c) $0.70 per head for commercial hens, (d) $1.25
per dozen hatching eggs; and (e) $0.40 per head for commercial pullets, provided
that such values shall be adjusted by the Required Lenders on a quarterly basis
to reflect market conditions.

           

          “Agreement” means this Amended
and Restated Post-Petition Credit Agreement, as the same may be amended,
modified, restated or supplemented from time to time pursuant to the terms
hereof.

           

          “Application” shall have the
meaning set forth in Section 1.2(b) hereof.

           

          “Approved Fund” means any
Fund that is administered or managed by (a) a Lender, (b) an Affiliate of a
Lender or (c) an entity or an Affiliate of an entity that administers or manages
a Lender.

           

          “Assignment and Acceptance”
means an assignment and acceptance entered into by a Lender and an Eligible
Assignee (with the consent of any party whose consent is required by
Section 12.12 hereof), and accepted by the DIP Agent, in substantially the
form of Exhibit H or any other form approved by the DIP Agent.

           

          “Authorized Representative”
means those persons shown on the list of officers provided by the Borrower
pursuant to Section 7.2 hereof or on any update of any such list provided
by the Borrower to the DIP Agent, or any further or different officers of the
Borrower so named by any Authorized Representative of the Borrower in a written
notice to the DIP Agent.

           

          “Available Unrestricted Cash”
means cash in any form, including without limitation amounts on deposit in
deposit accounts, securities accounts, commodity accounts, that is collected
funds and is not subject to any escrow, security deposit or other arrangement
that is otherwise permitted by this Agreement.

           

          “Avicola” means Avicola
Pilgrim’s Pride de Mexico, S. de. R.L. de C.V.

           

          “Avicola Agent” means ING
Capital LLC as agent under the Avicola Pre-Petition Credit
Agreement.

           

          “Avicola Pre-Petition
Collateral” means all collateral security for the Avicola Pre-Petition
Obligations in existence as of the Petition Date or agreed to be granted
thereafter (but only to the extent such future collateral consists of Property
of Avicola and its Subsidiaries) and all proceeds thereof.

           

          “Avicola Pre-Petition
Obligations” means all the indebtedness, obligations and liabilities,
fixed or contingent, of the Borrower, Avicola and Avicola’s Subsidiaries to the
lenders 

           

          
            
              
              

            

            
              -21-

              
                

              

            

            
              
              

            

             

            or the
Avicola Agent arising or in connection with the Avicola Pre-Petition Credit
Agreement or evidenced by the promissory notes issued by Avicola
thereunder.

          

           

          “Avicola Pre-Petition Credit
Agreement” means the Credit Agreement, dated as of September 25,
2006 (as amended, restated, amended and restated, or otherwise modified from
time to time), among Avicola, the Borrower and certain subsidiaries of Avicola,
as guarantors, the lenders from time to time party thereto and Avicola
Agent.

           

          “Bankruptcy Code” means The
Bankruptcy Reform Act of 1978, as heretofore and hereafter amended, and codified
as 11 U.S.C. Section 101 et seq.

           

          “Bankruptcy Court” means the
United States Bankruptcy Court for the Northern District of Texas, Fort Worth
Division, or any other court having jurisdiction over the Chapter 11 Cases
from time to time.

           

          “Base Rate” means for any day
the greatest of:  (i) the rate of interest announced or otherwise
established by the DIP Agent from time to time as its prime commercial rate, or
its equivalent, for U.S. Dollar loans to borrowers located in the United States
as in effect on such day, with any change in the Base Rate resulting from a
change in said prime commercial rate to be effective as of the date of the
relevant change in said prime commercial rate (it being acknowledged and agreed
that such rate may not be the DIP Agent’s best or lowest rate), and
(ii) the sum of (x) the rate determined by the DIP Agent to be the
average (rounded upward, if necessary, to the next higher 1/100 of 1%) of the
rates per annum quoted to the DIP Agent at approximately 10:00 a.m.
(Chicago time) (or as soon thereafter as is practicable) on such day (or, if
such day is not a Business Day, on the immediately preceding Business Day) by
two or more Federal funds brokers selected by the DIP Agent for sale to the DIP
Agent at face value of Federal funds in the secondary market in an amount equal
or comparable to the principal amount for which such rate is being determined,
plus (y) 1/2 of 1%, and (iii) the LIBOR Quoted Rate for such day plus
1.00%.

           

          “Borrower” shall have the
meaning set forth in the preamble hereof.

           

          “Borrowing” means the total
of Loans of a single type advanced by the Lenders on a single
date.  Borrowings of Loans are made and maintained ratably from each
of the Lenders according to their DIP Percentages.  A Borrowing is
“advanced” on the day Lenders advance
funds comprising such Borrowing to the Borrower.  Borrowings of Swing
Loans are made by the Swing Line Lender in accordance with the procedures set
forth in Section 1.6 hereof.

           

          “Borrowing Base” means, as of
any time it is to be determined on the basis of the information contained in the
most recent Borrowing Base Certificate, the sum of:

           

              (a)  80%
of the then outstanding unpaid amount of Eligible Receivables; plus

           

              (b)  65%
of the value (computed at the lower of market or cost using the
first-in/first-out method of inventory valuation determined in accordance with
GAAP, consistently applied) of Eligible Inventory consisting of feed grains,
feed and ingredients 

           

          
            
              
              

            

            
              -22-

              
                

              

            

            
              
              

            

             

            located
at the Borrower’s or a Guarantor’s owned or leased locations in the United
States (including Puerto Rico) or on site with contract growers or is prepaid in
full and is in transit from the seller thereof to the Borrower or Guarantor;
plus

          

           

              (c)  65%
of the lower of cost or fair wholesale market value (computed on a
first-in/first-out method of inventory valuation in accordance with GAAP,
consistently applied) of Eligible Inventory consisting of dressed broiler
chickens and commercial eggs; plus

           

              (d)  65%
of the Value of Eligible Inventory consisting of live broiler chickens;
plus

           

              (e)  65%
of the standard cost value of Eligible Inventory consisting of prepared food
products; plus

           

              (f) 
100% of the Agreed Upon Values of Eligible Inventory consisting of breeder hens,
breeder pullets, commercial hens, commercial pullets and hatching eggs;
plus

           

              (g)  65%
of the actual cost of Eligible Inventory consisting of branch inventory of
packaged items, plus

           

              (h)  40%
of the actual costs of Eligible Inventory consisting of packaging materials,
vaccines, general supplies, and maintenance supplies; minus

           

              (i)  the
aggregate principal amount of all loans, letters of credit (including the bond
letter of credit) and unreimbursed drawings under letters of credit outstanding
under the Pre-Petition BMO Credit Facilities; minus

           

              (j)  the
outstanding amount of Secured Grower Payables that are more than 15 days past
due;  minus

           

              (k)  a
good-faith estimate of the Carve-Out Amount acceptable to the Required Lenders;
minus

           

              (l)  a good faith
estimate of all claims under 11 U.S.C. § 503(b)(9);

           

          provided that (i) the
Borrowing Base as determined on any date shall not exceed 222% of the amount
included therein under clause (a) above as of such date, (ii) the DIP Agent
shall have the right, and at the request of the Required Lenders shall, upon
five (5) Business
Days’ notice to the Borrower to reduce the advance rates against Eligible
Receivables and Eligible Inventory in its reasonable credit discretion based on
results from any field audit or appraisal of the Collateral, and (iii) the
Borrowing Base shall be computed only as against and on so much of such
Collateral as is included on the Borrowing Base Certificates furnished from time
to time by the Borrower pursuant to this Agreement and, if required by the DIP
Agent pursuant to any of the terms hereof 

           

          
            
              
              

            

            
              -23-

              
                

              

            

            
              
              

            

          

           

          or any
Collateral Document, as verified by such other evidence reasonably required to
be furnished to the DIP Agent pursuant hereto or pursuant to any such Collateral
Document.

           

          “Borrowing Base Certificate”
means the certificate in the form of Exhibit E hereto, or in such other
form acceptable to the DIP Agent, to be delivered to the DIP Agent and the
Lenders pursuant to Sections 7.2 and 8.5 hereof.

           

          “Budget” means the budget
projecting the Debtors’ budgeted cash receipts and disbursements (including
Costs of Reorganization) on a weekly basis for 13 weeks.  The initial
Budget is the budget attached to the Interim Financing Order, as such budget may
from time to time be updated or otherwise modified as provided in this
Agreement.  Any use of the phrases “consistent with”, “to the extent
provided for”, “included in”, “pursuant to”, “shown in”, “covered by”, “set
forth in”, “contemplated in” or any similar reference when used with respect to
the Budget shall mean and refer to the Budget and any permitted variances
thereto or therein.

           

          “Budget Report” shall have the
meaning set forth in Section 8.5(m) hereof.

           

          “Business Day” means any day
(other than a Saturday or Sunday) on which banks are not authorized or required
to close in Chicago, Illinois.

           

          “Capital Expenditures” means,
for any period as applied to the Restricted Group, the aggregate of, without
duplication, all expenditures of the Restricted Group during such period that,
in conformity with GAAP, are or should be included in “purchase of property and
equipment” or similar items reflected in the statement of cash flows of the
Restricted Group; provided that the term
“Capital Expenditures” shall not include such expenditures which constitute (a)
purchases using casualty or condemnation proceeds not included in Net Proceeds
for events arising after the Petition Date, (b) purchases using Net Proceeds
reinvested by the Debtors as permitted by this Agreement in assets useful to
their businesses, (c) interest attributable to such expenditures that is
capitalized during such period, and (d) expenditures that are accounted for as
capital expenditures of the Restricted Group and that actually are paid for by a
third party and for which none of the members of the Restricted Group has
provided or is required to provide or incur, directly or indirectly, any
consideration or obligation to such third party or any other Person (whether
before, during or after such period).

           

          “Capital Lease” means any
lease of Property which in accordance with GAAP is required to be capitalized on
the balance sheet of the lessee.

           

          “Capitalized Lease
Obligation” means, for any Person, the amount of the liability shown on
the balance sheet of such Person in respect of a Capital Lease determined in
accordance with GAAP.

           

          “Carve-Out Amount” shall have
the meaning set forth in the definition of the term “Administrative Expense
Carve-Out.”

           

          
            
              
              

            

            
              -24-

              
                

              

            

            
              
              

            

          

           

          “Cash Collateral” means the
cash collateral (within the meaning of Section 363 of the Bankruptcy Code)
subject to the Liens securing the Post-Petition Obligations or any portion
thereof.

           

          “Cash Collateral Account”
shall have the meaning set forth in Section 4.4 hereof.

           

          “CERCLA” means the
Comprehensive Environmental Response, Compensation and Liability Act of 1980, as
amended by the Superfund Amendments and Reauthorization Act of 1986, 42 U.S.C.
§§ 9601 et seq., and any future amendments.

           

          “Change of Control” means any
of (a) the acquisition by any “person” or “group” (as such terms are used
in sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as
amended) at any time of beneficial ownership of more than 25% of the voting
power of the Voting Stock or other equity interests of the Borrower on a
fully-diluted basis, other than acquisitions of such interests by
(x) Lonnie A. “Bo” Pilgrim, his spouse, his issue, his estate and any
trust, partnership or other entity primarily for the benefit of him, his spouse
and/or issue, including any direct or indirect trustee, managing partner or such
other Person serving a similar function or Pilgrim Interests, (y)  the
Pre-Petition BMO Lenders, the Pre-Petition BMO Agent, the Pre-Petition CoBank
Lenders and the Pre-Petition CoBank Agent, (b) the failure of individuals
who are members of the board of directors (or similar governing body) of the
Borrower on the Closing Date (together with any new or replacement directors
whose initial nomination for election was approved by a majority of the
directors who were either directors on the Closing Date or previously so
approved) to constitute a majority of the board of directors (or similar
governing body) of the Borrower, or (c) any “Change of Control” (or words
of like import), as defined in any agreement or indenture relating to any issue
of Indebtedness for Borrowed Money in an outstanding principal amount in excess
of $1,000,000 of the Borrower or any Subsidiary that is incurred after the
Petition Date shall occur.

           

          “Chapter 11 Case” shall
have the meaning set forth in the preamble hereof.

           

          “Closing Date” means the date
of this Agreement or such later Business Day upon which each condition described
in Section 7.2 shall be satisfied or waived in a manner acceptable to the
DIP Agent in its discretion, but in any event no later than December 31,
2008, or any later date that may be agreed to by the Required
Lenders.

           

          “Code” means the Internal
Revenue Code of 1986, as amended, and any successor statute
thereto.

           

          “Collateral” shall have the
meaning set forth in Section 4.1 hereof.

           

          “Collection Account” shall
have the meaning set forth in Section 4.3 hereof.

           

          “Collateral Documents” means
any and all mortgages, deeds of trust, security agreements, pledge agreements,
assignments, financing statements and other documents as shall from time to time
secure or relate to the Post-Petition Obligations or any part
thereof.

           

          
            
              
              

            

            
              -25-

              
                

              

            

            
              
              

            

          

           

          “Controlled Group” means all
members of a controlled group of corporations and all trades or businesses
(whether or not incorporated) under common control which, together with the
Borrower, are treated as a single employer under Section 414 of the
Code.

           

          “Costs of Reorganization”
shall mean all legal, professional and advisory fees paid by the Debtors
(whether or not incurred by the Debtors) in connection with the Chapter 11 Cases
as set forth in the Budget and approved in the Financing Order or as may be
otherwise approved from time to time by the Bankruptcy Court, subject to the
Lenders’ and the DIP Agent’s right to object thereto.

           

          “Credit Event” means the
advancing of any Loan, or the issuance of, or extension (other than an automatic
extension) of the expiration date or increase in the amount of, any Letter of
Credit.

           

          “Debtor” shall have the
meaning set forth in the preamble hereof.

           

          “Default” means any event or
condition the occurrence of which would, with the passage of time or the giving
of notice, or both, constitute an Event of Default.

           

          “Default Rate” shall have the
meaning set forth in Section 1.9 hereof.

           

          “Designated Disbursement
Account” means the account of the Borrower maintained with the DIP Agent
or its Affiliate and designated in writing to the DIP Agent as the Borrower’s
Designated Disbursement Account (or such other account as the Borrower and the
DIP Agent may otherwise agree).

           

          “Designated Officer” means
the Borrower’s directors, chief executive officer, president, chief financial
officer, chief restructuring officer and all officers responsible for
supervising compliance with the United States securities laws.

           

          “DIP Agent” means Bank of
Montreal, in is capacity as DIP Agent hereunder, and any successor in such
capacity pursuant to Section 11.7 hereof.

           

          “DIP Approval” means approval
by the Required Lenders or, in urgent circumstances in which there is
insufficient time for the DIP Agent to consult the Lenders, the DIP
Agent.  The DIP Agent shall thereafter promptly notify the Lenders of
any approvals given by it.

           

          “DIP Commitment” means, as to
any Lender, the obligation of such Lender to make DIP Loans and to participate
in Swing Loans and Letters of Credit issued for the account of the Borrower
hereunder in an aggregate principal or face amount at any one time outstanding
not to exceed the amount set forth opposite such Lender’s name on
Schedule 1 attached hereto and made a part hereof, as the same may be
reduced or modified at any time or from time to time pursuant to the terms
hereof.  The Borrower and the Lenders acknowledge and agree that the
DIP Commitments of the Lenders aggregate $450,000,000 on the date
hereof.

           

          
            
              
              

            

            
              -26-

              
                

              

            

            
              
              

            

          

           

          “DIP Credit Facility” or “DIP Credit” or “Facility” means the
debtor-in-possession facility extended to the Borrower by the Lenders
hereunder.

           

          “DIP Loan” shall have the
meaning set forth in Section 1.1 hereof.

           

          “DIP Percentage” means, for
each Lender, the percentage of the DIP Commitments represented by such Lender’s
DIP Commitment or, if the DIP Commitments have been terminated, the percentage
held by such Lender (including through participation interests in Reimbursement
Obligations) of the aggregate principal amount of all DIP Loans and
L/C Obligations then outstanding.

           

          “Disposition” means the sale,
lease, conveyance or other disposition of Property, other than sales or other
dispositions expressly permitted under Sections 8.10(a), (b), (e), (f), (g)
or (h) hereof.

           

          “Domestic Subsidiary” means a
Subsidiary that is not a Foreign Subsidiary.

           

          “EBITDAR” means, with
reference to any period, Net Income for such period (x) plus all amounts
deducted in arriving at such Net Income amount in respect of (a) Interest
Expense for such period, (b) federal, state, and local income taxes for
such period, (c) depreciation of fixed assets and amortization of
intangible assets for such period, (d) all asset impairment charges and
restructuring costs that consist of fees and expenses of professionals (whether
engaged by the Debtors, any official committee, the DIP Agent (or its counsel),
the Lenders, the Pre-Petition BMO Agent (or its counsel), the Pre-Petition BMO
Lenders (or their counsel), the Pre-Petition CoBank Agent (or its counsel), the
Pre-Petition CoBank Lenders (or their counsel), or any other Person) incurred
during such period and losses in an aggregate amount not to exceed $17,500,000
suffered in the month of October, 2008, in connection with commodity hedging
transactions, (e) losses realized upon any sale or other disposition of
Property during such period, and (f) any write-downs of goodwill or other
intangibles during such period, and (y) minus all amounts included in
arriving at such Net Income in respect of gains realized upon any sale or other
disposition of Property during such period (all amounts referred
to  in clauses (x) and (y) to be determined on a consolidated basis
using the standards used in the preparation of the Borrower’s quarterly
financial statements other than those items or adjustments that are only
reflected on a quarterly basis).

           

          “Eligible Assignee” means
(a) a Lender, (b) an Affiliate of a Lender, (c) an Approved Fund,
and (d) any other Person (other than a natural person) approved by
(i) the DIP Agent, and (ii) in the case of any assignment of a DIP
Commitment, the L/C Issuer (each such approval not to be unreasonably
withheld or delayed); provided that notwithstanding
the foregoing, “Eligible Assignee” shall not include the Borrower or any
Guarantor or any of the Borrower’s or such Guarantor’s Affiliates or
Subsidiaries.

           

          “Eligible Inventory” means
any inventory of the Borrower or any Guarantor which:

           

              (a) 
consists solely of feed grains, feed, ingredients, live and dressed broiler
chickens, commercial eggs, breeder hens, breeder pullets, hatching eggs,
commercial 

           

          
            
              
              

            

            
              -27-

              
                

              

            

            
              
              

            

          

           

          hens,
commercial pullets, prepared food products, branch inventory of packaged items,
packaging materials, vaccines, general supplies, and maintenance supplies, but
excluding in any event feed ingredients that are subject to any Liens granted to
the sellers of such feed ingredients to secure the unpaid purchase price
thereof;

           

              (b)  is
an asset of such Person to which it has good and marketable title, is freely
assignable, and is subject to a perfected, first priority lien in favor of the
DIP Agent free and clear of any other liens (other than Permitted Liens or Liens
arising by operation of law in each case which are subordinate to the Liens in
favor of the DIP Agent);

           

              (c)  is
located in the United States of America (including Puerto Rico) at
a  location reasonably agreed upon by the Borrower and the DIP Agent
or is prepaid in full and in transit from the seller thereof to the Borrower or
any Guarantor and, in the case of any location not owned by such Person, if
requested by the DIP Agent, which is at all times subject to a lien waiver
agreement from such landlord or other third party to the extent required by, and
in form and substance reasonably satisfactory to, the DIP Agent;

           

              (d)  is
not so identified to a contract to sell that it constitutes a
Receivable;

           

              (e)  is
not obsolete, and is readily usable or salable by the Borrower or Guarantor in
the ordinary course of business;

           

              (f)  is
not covered by a warehouse receipt or similar document unless, if requested by
the DIP Agent, such warehouse receipt or similar document has been delivered to
the DIP Agent or an agent or bailee of the DIP Agent;

           

              (g)  is not
proprietary inventory of any customer of the Borrower or a Guarantor;
and

           

              (h)  is
deemed by the Required Lenders in their sole judgment to be acceptable for
inclusion in the Borrowing Base.

           

          “Eligible Receivables” means
any Receivable of the Borrower or any Guarantor which:

           

              (a) 
arises out of the sale of finished goods inventory delivered to and accepted by,
or out of the rendition of services fully performed and accepted by, the Account
Debtor on such Receivable, such Receivable does not represent a pre-billed
Receivable or a progress billing, and such Receivable is net of any deposits
made by or for the account of the relevant Account Debtor;

           

              (b)  is
payable in U.S. Dollars and the Account Debtor on such Receivable is located
within the United States of America or, if such right has arisen out of the sale
of such goods shipped to, or out of the rendition of services to, an Account
Debtor located in any other country, such right is either (i) secured by a
valid and irrevocable transferable letter of credit issued by a lender
reasonably acceptable to the DIP Agent for the full amount thereof or
(ii) secured by an insurance policy on terms, and issued by EXIM Bank

           

          
            
              
              

            

            
              -28-

              
                

              

            

            
              
              

            

          

           

          or
another insurer, satisfactory to the DIP Agent (which in any event shall insure
not less than ninety percent (90%) of the face amount of such Receivable and
shall be subject to such deductions as are acceptable to the DIP Agent), and in
each case which has been assigned or transferred to the DIP Agent in a manner
acceptable to the DIP Agent;

           

              (c)  is
the valid, binding and legally enforceable obligation of the Account Debtor
obligated thereon and such Account Debtor is not (i) a Subsidiary or an
affiliate of the Borrower, (ii) a shareholder, director, officer or
employee of the Borrower or any Guarantor, (iii) the United States of
America, or any state or political subdivision thereof, or any department,
agency or instrumentality of any of the foregoing, unless the Assignment of
Claims Act or any similar state or local statute, as the case may be, is
complied with to the satisfaction of the DIP Agent, (iv) a debtor under any
proceeding under the United States Bankruptcy Code, as amended, or any other
comparable bankruptcy or insolvency law, or (v) an assignor for the benefit
of creditors;

           

              (d)  is
not evidenced by an instrument or chattel paper unless the same has been
endorsed and delivered to the DIP Agent;

           

              (e)  is
an asset of such Person to which it has good and marketable title, is freely
assignable, and is subject to a perfected, first priority Lien in favor of the
DIP Agent free and clear of any other Liens (other than Permitted Liens or Liens
arising by operation of law in each case that are subordinate to the Liens in
favor of the DIP Agent);

           

              (f)  is
not subject to any offset, counterclaim or other defense with respect thereto
(but solely to the extent that such offset, counterclaim or other defense is not
otherwise deducted or provided for in the calculation of the Borrowing
Base);

           

              (g)  no
surety bond was required or given in connection with said Receivable or the
contract or purchase order out of which the same arose;

           

              (h)  it
is evidenced by an invoice to the Account Debtor dated not more than
5 Business Days subsequent to the shipment date of the relevant inventory
or completion of performance of the relevant services and is issued on ordinary
trade terms;

           

              (i)  is
not unpaid more than 45 days after the original invoice date;

           

              (j)  is
not owed by an Account Debtor who is obligated on Receivables more than 10% of
the aggregate unpaid balance of which have been past due for longer than the
relevant period specified in subsection (i) above unless the DIP Agent has
approved the continued eligibility thereof;

           

              (k) 
would not cause the total Receivables owing from any one Account Debtor and its
Affiliates to exceed 15% of all Eligible Receivables;

           

              (l) 
does not arise from a sale on a bill-and-hold, guaranteed sale, sale-or-return,
sale-on-approval, consignment or any other repurchase or return basis;
and

           

          
            
              
              

            

            
              -29-

              
                

              

            

            
              
              

            

          

            

              (m)  is
deemed by the Required Lenders in their sole judgment to be acceptable for
inclusion in the Borrowing Base.

           

          “Environmental Claim” means
any investigation, notice, violation, demand, allegation, action, suit,
injunction, judgment, order, consent decree, penalty, fine, lien,
pro­ceeding or claim (whether administrative, judicial or private in nature)
arising (a) pursuant to, or in connection with an actual or alleged
violation of, any Environmental Law, (b) in connection with any Hazardous
Material, (c) from any abatement, removal, remedial, cor­rective or
response action in connection with a Hazardous Material, Environmental Law or
order of a governmental authority or (d) from any actual or alleged damage,
injury, threat or harm to health and safety of humans, natural resources or the
environment.

           

          “Environmental Law” means any
applicable current or future Legal Requirement pertaining to (a) the
protection of health and safety of humans and the indoor or outdoor environment,
(b) the conservation, management or use of natural resources and wildlife,
(c) the protection or use of surface water or groundwater, (d) the
management, manufacture, possession, presence, use, generation, transportation,
treatment, storage, disposal, Release, threatened Release, abatement, removal,
remediation or handling of, or exposure to, any Hazardous Material or
(e) pollution (including any Release to air, land, surface water or
groundwater), and any amendment, rule, regulation, order or directive issued
thereunder.

           

          “ERISA” means the Employee
Retirement Income Security Act of 1974, as amended, or any successor statute
thereto.

           

          “Essential Creditor” means
(a) essential trade creditors who agree to provide goods and services to
the Debtors on terms consistent with a Normalized Trade Creditor, and
(b) the holders of tax claims and employee-related claims to the extent
provided for in the Budget or, if not provided for in the Budget, subject to DIP
Approval.

           

          “Essential Trade Creditor”
means any Essential Creditor who is a trade creditor.

           

          “Eurodollar Reserve
Percentage” means, for any Borrowing of Loans, the daily average for the
applicable interest period of the maximum rate, expressed as a decimal, at which
reserves (including, without limitation, any supplemental, marginal, and
emergency reserves) are imposed during such Interest Period by the Board of
Governors of the Federal Reserve System (or any successor) on “eurocurrency
liabilities,” as
defined in such Board’s Regulation D (or in respect of any other category
of liabilities that includes deposits by reference to which the interest rate on
the Loans is determined or any category of extensions of credit or other assets
that include loans by non-United States offices of any Lender to United States
residents), subject to any amendments of such reserve requirement by such Board
or its successor, taking into account any transitional adjustments
thereto.  For purposes of this definition, the Loans shall be deemed to
be “eurocurrency liabilities” as defined in Regulation D without benefit or
credit for any prorations, exemptions or offsets under
Regulation D.

           

          “Event of Default” means any
event or condition identified as such in Section 9.1 hereof.

           

          
            
              
              

            

            
              -30-

              
                

              

            

            
              
              

            

          

           

          “Event of Loss” means, with
respect to any Property, any of the following:  (a) any loss,
destruction or damage of such Property or (b) any condemnation, seizure, or
taking, by exercise of the power of eminent domain or otherwise, of such
Property, or confiscation of such Property or the requisition of the use of such
Property.

           

          “Excess Interest” is defined
in Section 12.20 hereof.

           

          “Fairway Receivables Securitization
Program” means the accounts receivable securitization program provided to
the Borrower under the Receivables Purchase Agreement.

           

          “Federal Funds Rate” means
the fluctuating interest rate per annum described in part (x) of
clause (ii) of the definition of Base Rate.

           

          “Final Financing Order” means
a final order of the Bankruptcy Court authorizing and approving the DIP Credit
Facility, entered by the Bankruptcy Court after notice given in a hearing
conducted in accordance with Bankruptcy Rule 4001(c) and in substantially
the form attached hereto as Exhibit C.

           

          “Financing Order” shall mean
the Interim Financing Order prior to entry of the Final Financing Order and
shall mean the Final Financing Order at all times thereafter.

           

          “Foreign Subsidiary” means
each Subsidiary which (a) is organized under the laws of a jurisdiction
other than the United States of America or any state thereof or the District of
Columbia, (b) conducts substantially all of its business outside of the
United States of America, and (c) has substantially all of its assets
outside of the United States of America.  

           

          “Fund” means any Person
(other than a natural person) that is (or will be) engaged in making,
purchasing, holding or otherwise investing in commercial loans and similar
extensions of credit in the ordinary course of its business.

           

          “GAAP” means generally
accepted accounting principles set forth from time to time in the opinions and
pronouncements of the Accounting Principles Board and the American Institute of
Certified Public Accountants and statements and pronouncements of the Financial
Accounting Standards Board (or agencies with similar functions of comparable
stature and authority within the U.S. accounting profession), which are
applicable to the circumstances as of the date of determination.

           

          “Gold Kist Insurance” means
GK Insurance Company.

           

          “Guarantor” and “Guarantors” shall have the
meaning set forth in Section 1.12 hereof.

           

          “Guaranty” and “Guaranties” shall have the
meaning set forth in Section 1.12 hereof.

           

          “Hazardous Material” means
any substance, chemical, compound, product, solid, gas, liquid, waste,
byproduct, pollutant, contaminant or material which is hazardous or toxic, and
includes, without limitation, (a) asbestos, polychlorinated biphenyls and
petroleum (including 

           

          
            
              
              

            

            
              -31-

              
                

              

            

            
              
              

            

             

            crude oil
or any fraction thereof) and (b) any material classified or regulated as
“hazardous” or “toxic” or words of like
import pursuant to an Environmental Law.

          

           

          “Hazardous Material Activity”
means any activity, event or occurrence involving a Hazardous Material,
including, without limitation, the manufacture, possession, presence, use,
generation, transportation, treatment, storage, disposal, Release, threatened
Release, abatement, removal, remediation, handling of or corrective or response
action to any Hazardous Material.

           

          “Incur” shall have the
meaning set forth in Section 8.23 hereof.

           

          “Indebtedness for Borrowed
Money” means for any Person (without duplication) (a) all
indebtedness created, assumed or incurred in any manner by such Person
representing money borrowed (including by the issuance of debt securities),
(b) all indebtedness for the deferred purchase price of property or
services (other than trade accounts payable arising in the ordinary course of
business), (c) all indebtedness secured by any Lien upon Property of such
Person, whether or not such Person has assumed or become liable for the payment
of such indebtedness, (d) all Capitalized Lease Obligations of such Person,
and (e) all obligations of such Person on or with respect to letters of
credit and bankers’ acceptances whether or not representing obligations for
borrowed money.

           

          “Information” shall have the
meaning set forth in Section 12.29 hereof.

           

          “Insurance Subsidiaries”
means Gold Kist Insurance and Mayflower.

           

          “Intercompany Bonds” means
(a) industrial revenue bonds and similar financing arrangements in an aggregate
principal amount of approximately $57,500,000 assigned to the Borrower in
connection with and as part of the acquisition by the Borrower of the stock of
certain Subsidiaries of ConAgra Foods, Inc., a Delaware corporation, and (b) any
industrial revenue bonds, notes, debentures or similar instruments issued by a
governmental entity on behalf of the Borrower or a Subsidiary and concurrently
with or following its issuance purchased by the Borrower or a
Subsidiary.

           

          “Interest Expense” means,
with reference to any period, the sum of all interest charges (including imputed
interest charges with respect to Capitalized Lease Obligations and all
amortization of debt discount and expense) and letter of credit fees of the
Borrower and its Subsidiaries for such period determined on a consolidated basis
in accordance with GAAP.  

           

          “Interim Financing Order”
means the Interim Financing Order Authorizing (1) Borrowing with Priority over
Administrative Expenses and Secured by Liens on Property of the Estates Pursuant
to Section 364(c) and Section 364(d) of the Bankruptcy Code, (2) the Debtors’
Use of Cash Collateral including to Repurchase Receivables and Granting Adequate
Protection Therefor Pursuant to Sections 361 and 363 of the Bankruptcy Code,
(3) Modifying the Automatic Stay, and (4) Giving Notice of Schedule of
Final Hearing entered by the Bankruptcy Court on December 2,
2008.

           

          
            
              
              

            

            
              -32-

              
                

              

            

            
              
              

            

          

           

          “Interim Financing Order
Amount” means the amount of the DIP Commitments approved by the
Bankruptcy Court in the Interim Financing Order that will be available to the
Borrower during the period from the Closing Date through the date the Final
Financing Order is entered.

           

          “Joint Venture” means any
corporation, partnership or other entity or arrangement in which the Borrower or
any Subsidiary owns or controls any, but not more than 70%, of the Voting
Stock.

           

          “L/C Issuer” means Bank
of Montreal, in its capacity as the issuer of Letters of Credit hereunder, and
its successors in such capacity as provided in Section 1.2(h)
hereof.

           

          “L/C Obligations” means the
aggregate undrawn face amounts of all outstanding Letters of Credit and all
unpaid Reimbursement Obligations.

           

          “L/C Sublimit” means
$20,000,000, as reduced pursuant to the terms hereof.

           

          “Legal Requirement” means any
applicable treaty, convention, statute, law, regulation, ordinance, license,
permit, governmental approval, injunction, judgment, order, consent decree or
other requirement of any governmental authority, whether federal, state, or
local.

           

          “Lenders” means and includes
Bank of Montreal and the other financial institutions from time to time party to
this Agreement, including each assignee Lender pursuant to Section 12.12
hereof and, unless the context otherwise requires, the Swing Line
Lender.

           

          “Letter of Credit” shall have
the meaning set forth in Section 1.2(a) hereof.

           

          “LIBOR01 Page” means the
display designated as “Reuters Screen LIBOR01 Page” (or such other page as may
replace the LIBOR01 Page on that service or such other service as may be
nominated by the British Bankers’ Association as the information vendor for the
purpose of displaying British Bankers’ Association Interest Settlement Rates for
U.S. Dollar deposits).

           

          “LIBOR Quoted Rate” means,
for any date, the rate per annum determined by a fraction, the numerator of
which is the rate per annum (rounded upwards, if necessary, to the next higher
one hundred-thousandth of a percentage point) for deposits in U.S. Dollars for
an interest period equal to one month, which appears on the LIBOR01 Page as of
11:00 a.m. (London, England time) on such date and the denominator of which
is 1 minus the Eurodollar Reserve Percentage.

           

          “Lien” means any mortgage,
lien, security interest, pledge, charge or encumbrance of any kind in respect of
any Property, including the interests of a vendor or lessor under any
conditional sale, Capital Lease or other title retention
arrangement.

           

          “Lien Finding” means an order
of the Bankruptcy Court in form and substance satisfactory to the DIP Agent
finding that the Pre-Petition BMO Lenders are fully secured by the Pre-Petition
BMO Collateral by means of a valid, first priority (subject to Liens permitted
under 

          
            
              
              

            

            
              -33-

              
                

              

            

            
              
              

            

            the
Pre-Petition BMO Credit Agreement), senior, fully perfected and non-avoidable
security interest and lien on the Pre-Petition BMO Primary
Collateral.

          

           

          “Loan” means any DIP Loan or
Swing Loan.

           

          “Loan Documents” means this
Agreement, the Notes (if any), the Applications, the Collateral Documents, the
Guaranties, and each other instrument or document to be delivered hereunder or
thereunder or otherwise in connection therewith.

           

          “Material Adverse Effect”
means (a) a material adverse change in the condition or prospects (financial or
otherwise), of the Borrower and its Subsidiaries taken as a whole after the
Petition Date, (b) a material impairment of the ability of the Borrower or
of the Debtors, taken as a whole, to perform their respective obligations under
any Loan Document or (c) a material adverse effect upon (i) the
legality, validity, binding effect or enforceability against the Borrower or of
the Debtors, taken as a whole, of any Loan Document or the rights and remedies
of the DIP Agent and the Lenders thereunder or (ii) the perfection or
priority of any Lien granted under this Agreement or any Financing
Order.

           

          “Material Non-debtor Subsidiaries”
means, as of any date, any one or more Non-debtor Subsidiaries of the
Borrower having assets that in the aggregate constitute more than 5% of the
total assets of the Borrower and its Subsidiaries at such time, but in any event
shall include the Insurance Subsidiaries and Avicola and its
Subsidiaries.

           

          “Material Plan” shall have
the meaning set forth in Section 9.1(i) hereof.

           

          “Maturity Date” means
December 1, 2009, provided that the Maturity Date may be extended for an
additional 6 months at the request of the Borrower received no later than 45
days prior to the Maturity Date with the prior written consent of all of the
Lenders.  In the event any Lender does not respond in writing prior to
the Maturity Date to any request for an extension of the Maturity Date such
Lender shall be deemed to have refused to agree to the requested
extension.

           

          “Maximum Rate” shall have the
meaning set forth in Section 12.20 hereof.

           

          “Mayflower” means Mayflower
Insurance Company, Ltd.

           

          “Merit Provisions” means
Merit Provisions LLC, a Delaware limited liability company.

           

          “Minority Lenders” shall have
the meaning set forth in Section 1.13 hereof.

           

          “Net Income” means, with
reference to any period, the net income (or net loss) of the Borrower and its
Subsidiaries for such period computed on a consolidated basis using the
standards used in the preparation of the Borrower’s quarterly financial
statements other than those items or adjustments that are only reflected on a
quarterly basis; provided that there shall be
excluded from Net Income (a) the net income (or net loss) of any Person
accrued prior to the date it becomes a Subsidiary of, or has merged into or
consolidated with, the Borrower or another 

           

          
            
              
              

            

            
              -34-

              
                

              

            

            
              
              

            

             

            Subsidiary,
and (b) the net income (or net loss) of any Person (other than a
Subsidiary) in which the Borrower or any of its Subsidiaries has an equity
interest, except to the extent of the amount of dividends or other distributions
actually paid to the Borrower or any of its Subsidiaries during such
period.  

          

           

          “Net Proceeds” shall mean the
gross sale price less actual taxes payable and the reasonable out-of-pocket
costs of such sale (including without limitation broker’s fees and closing
costs) and the amount of all obligations secured by Permitted Liens that are
senior to the DIP Agent’s Liens in the Collateral and the Replacement Liens,
provided that Net Proceeds shall not include any casualty or condemnation
proceeds to the extent the Borrower or the relevant Guarantor has elected to use
such proceeds to repair, rebuild, or replace the assets subject to such casualty
or condemnation, no Event of Default exists and is continuing and, solely to the
extent of proceeds in excess of $10,000,000 or such higher amount as the
Required Lenders may approve with respect to any single casualty or condemnation
event, the Required Lenders have approved such repair, rebuilding or
replacement.  Any Property so repaired, rebuilt or replaced shall
constitute part of the Collateral and shall be subject to the Replacement
Liens.

           

          “Non-debtor Subsidiary” means
a Subsidiary of the Borrower that is not a debtor or debtor-in-possession in a
proceeding under the Bankruptcy Code.

           

          “Normalized Trade Creditor”
shall mean an Essential Trade Creditor that has agreed with the relevant Debtor
to continue to extend credit and supply goods and/or services to the relevant
Debtor on terms consistent with those in effect on September 15, 2008, or
subject to DIP Approval and consistent with the assumptions used in the
projections of the Borrower that support feasibility of the
Borrower.

           

          “Note” and “Notes” shall have the
meaning set forth in Section 1.10 hereof.

           

          “Original DIP Credit
Agreement” shall have the meaning set forth in the preamble
hereof.

           

          “Participating Interest”
shall have the meaning set forth in Section 1.2(e) hereof.

           

          “Participating Lender” shall
have the meaning set forth in Section 1.2(e) hereof.

           

          “PBGC” means the Pension
Benefit Guaranty Corporation or any Person succeeding to any or all of its
functions under ERISA.

           

          “Permitted Liens” shall mean
Liens permitted by Section 8.8 hereof.

           

          “Permitted Senior Liens”
shall have the meaning set forth in Section 8.8 hereof.

           

          “Person” means an individual,
partnership, corporation, limited liability company, association, trust,
unincorporated organization or any other entity or organization, including a
government or agency or political subdivision thereof.

           

          
            
              
              

            

            
              -35-

              
                

              

            

            
              
              

            

          

           

          “Petty Cash and Payroll
Accounts” is defined in Section 4.3 hereof.

           

          “Petition Date” shall have
the meaning set forth in the Preliminary Statement hereto.

           

          “Pilgrim Interests” means
Pilgrim Interests, Ltd., a Texas limited partnership.

           

          “Plan” means any employee
pension benefit plan covered by Title IV of ERISA or subject to the minimum
funding standards under Section 412 of the Code that either (a) is
maintained by a member of the Controlled Group for employees of a member of the
Controlled Group or (b) is maintained pursuant to a collective bargaining
agreement or any other arrangement under which more than one employer makes
contributions and to which a member of the Controlled Group is then making or
accruing an obligation to make contributions or has within the preceding five
plan years made contributions.

           

          “Post-Petition Obligations”
shall mean any and all present and future indebtedness, obligations and
liabilities, fixed or contingent, of the Borrower and the Guarantors to the
Lenders or the DIP Agent arising on and after the date hereof under or in
connection with this Agreement, the Financing Orders or the other Loan Documents
or evidenced by the Notes or in connection with the Letters of Credit, including
without limitation the payment of the principal of and interest on the Loans and
the Reimbursement Obligations.

           

          “Premises” means the real
property owned or leased by the Borrower or any Subsidiary.

           

          “Pre-Petition BMO Agent”
shall mean Bank of Montreal, Chicago Branch, in its capacity as administrative
agent under the Pre-Petition BMO Credit Agreement.

           

          “Pre-Petition BMO
Applications” means the various letter of credit applications and
reimbursement agreements executed and delivered by the Borrower to various
Pre-Petition BMO Lenders acting as issuers of letters of credit under the
Pre-Petition BMO Credit Agreement, as the same may be supplemented, amended,
restated or otherwise modified from time to time and any agreement entered into
in substitution therefor or replacement thereof.

           

          “Pre-Petition BMO Collateral”
means all collateral security for the Pre-Petition BMO Obligations which was in
existence as of the Petition Date and all proceeds thereof.

           

          “Pre-Petition BMO Credit
Agreement” shall mean that certain Fourth Amended and Restated Credit
Agreement dated as of February 8, 2007, by and between the Borrower, the
Pre-Petition Foreign Borrowers, the several lenders and letter of credit issuers
from time to time parties thereto, and Bank of Montreal, Chicago Branch, as
administrative agent, as the same has from time to time been modified or
amended.

           

          “Pre-Petition BMO Credit
Facilities” means the credit facilities provided under the Pre-Petition
BMO Credit Agreement.

           

          “Pre-Petition BMO Guaranty”
means the Second Amended and Restated Guaranty Agreement dated as of
February 8, 2007, from Pilgrim Interests to the Pre-Petition BMO Agent

           

          
            
              
              

            

            
              -36-

              
                

              

            

            
              
              

            

             

            and the
Pre-Petition BMO Lenders, as the same may be supplemented, amended, restated or
otherwise modified from time to time and any agreement entered into in
substitution therefor or replacement thereof.

          

           

          “Pre-Petition BMO Lenders”
means the several lenders and letter of credit issuers from time to time parties
to the Pre-Petition BMO Credit Agreement.

           

          “Pre-Petition BMO Loan
Documents” shall mean the Pre-Petition BMO Credit Agreement, the
Pre-Petition BMO Security Documents, the Pre-Petition BMO Guaranty, the
Pre-Petition BMO Reimbursement Agreement, the Pre-Petition BMO Applications, and
any other security agreement, pledge agreement, deed of trust, mortgage,
collateral assignment, financing statement or other instrument or agreement
executed and delivered in connection therewith.

           

          “Pre-Petition BMO Loans”
shall mean the loans provided for by the Pre-Petition BMO Credit
Agreement.

           

          “Pre-Petition BMO
Obligations” shall mean all the indebtedness, obligations and
liabilities, fixed or contingent, of the Borrower and its Subsidiaries to the
Pre-Petition BMO Lenders or the Pre-Petition BMO Agent arising under or in
connection with the Pre-Petition BMO Credit Agreement or evidenced by the
promissory notes issued by the Borrower thereunder or in connection with the
letters of credit issued by the Pre-Petition BMO Lenders thereunder, including
without limitation the payment of the principal of and interest on the
Pre-Petition BMO Loans made thereunder and the Pre-Petition BMO Reimbursement
Obligations and all amounts relating to interest rate protection agreements
relating to any of the foregoing.

           

          “Pre-Petition BMO Primary
Collateral” means all collateral security for the Pre-Petition BMO
Obligations provided under the Pre-Petition BMO Working Capital Security
Agreement which was in existence as of the Petition Date and all proceeds
thereof.

           

          “Pre-Petition BMO Reimbursement
Agreement” means the Reimbursement Agreement dated as of June 15,
1999, between the Borrower and Harris N.A., successor by merger to Harris Trust
and Savings Bank, as the same may be supplemented, amended, restated or
otherwise modified from time to time and any agreement entered into in
substitution therefor or replacement thereof.

           

          “Pre-Petition BMO Reimbursement
Obligations” shall mean the obligation of the Borrower to reimburse the
issuers of letters of credit under the Pre-Petition BMO Credit Agreement, the
Pre-Petition BMO Applications and the Pre-Petition BMO Reimbursement Agreement
for amounts drawn under such letters of credit.

           

          “Pre-Petition BMO Security
Documents” shall mean the Pre-Petition BMO Working Capital Security
Agreement, and all other security documents delivered to the Pre-Petition BMO
Agent granting a Lien on Property of any Person to secure the obligations and
liabilities of any Debtor or any Pre-Petition Foreign Borrower under the
Pre-Petition BMO Loan Documents.

           

          
            
              
              

            

            
              -37-

              
                

              

            

            
              
              

            

          

           

          “Pre-Petition BMO Working Capital
Security Agreement” means the Third Amended and Restated Security
Agreement Re: Inventory and Farm Products dated as of October 13, 2008,
from the Borrower to the Pre-Petition BMO Agent, as the same may be
supplemented, amended, restated or otherwise modified from time to time and any
agreement entered into in substitution therefor or replacement
thereof.

           

          “Pre-Petition CoBank Agent”
is defined in the definition of the term “Pre-Petition CoBank Credit
Agreement.”

           

          “Pre-Petition CoBank
Collateral” means all collateral security for the Pre-Petition CoBank
Obligations which was in existence as of the Petition Date and all proceeds
thereof.

           

          “Pre-Petition CoBank Credit
Agreement” means the Amended and Restated Credit Agreement dated as of
September 21, 2006, among the Borrower, CoBank, ACB, as administrative,
documentation and collateral agent for the benefit of the present and future
syndication parties (in its capacity as administrative agent, the “Pre-Petition CoBank Agent”),
lead arranger and book manager thereunder and as a syndication party, Farm
Credit Services of America, FLCA, as co-arranger and as a syndication party, and
the other syndication parties party thereto, as amended, supplemented, restated
and otherwise modified from time to time (as so amended, supplemented, restated
and otherwise modified from time to time).

           

          “Pre-Petition CoBank Credit
Facilities” means the credit facilities provided under the Pre-Petition
CoBank Credit Agreement.

           

          “Pre-Petition CoBank Lenders”
means the several lenders from time to time parties to the Pre-Petition CoBank
Credit Agreement.

           

          “Pre-Petition CoBank Loan
Documents” shall mean the Pre-Petition CoBank Credit Agreement, the
Pre-Petition CoBank Security Documents and any other security agreement, pledge
agreement, deed of trust, mortgage, collateral assignment, financing statement
or other instrument or agreement executed and delivered in connection
therewith.

           

          “Pre-Petition CoBank
Mortgages” shall mean any and all mortgages, deeds of trust, deeds to
secured debt and other instruments or documents granting or creating a Lien on
real property (or any interest therein) at any time delivered to the
Pre-Petition CoBank Agent or any Pre-Petition CoBank Lenders to provide
collateral security for any indebtedness, obligations and liabilities of the
Borrower under the Pre-Petition CoBank Loan Documents.

           

          “Pre-Petition CoBank
Obligations” shall mean all the indebtedness, obligations and
liabilities, fixed or contingent, of the Borrower and its Subsidiaries to the
Pre-Petition CoBank Lenders or the Pre-Petition CoBank Agent arising under or in
connection with the Pre-Petition CoBank Credit Agreement or evidenced by the
promissory notes issued by the Borrower thereunder, including without limitation
the payment of the principal of and interest on the loans and other extensions
of credit made thereunder and all amounts relating to interest rate protection
agreements relating to any of the foregoing.

           

          
            
              
              

            

            
              -38-

              
                

              

            

            
              
              

            

          

           

          “Pre-Petition CoBank Primary
Collateral” means all collateral security for the Pre-Petition CoBank
Obligations provided under the Pre-Petition CoBank Mortgages and the
Pre-Petition CoBank Security Agreement which was in existence as of the Petition
Date and all proceeds thereof.

           

          “Pre-Petition CoBank Security
Agreement” shall mean the Amended and Restated Security and Pledge
Agreement dated as of September 21, 2006, from the Borrower to the
Pre-Petition CoBank Agent, as the same may be supplemented, amended, restated or
otherwise modified from time to time and any agreement entered into in
substitution therefor or replacement thereof.

           

          “Pre-Petition CoBank Security
Documents” shall mean the Pre-Petition CoBank Security Agreement, the
Pre-Petition CoBank Mortgages and all other security documents delivered to the
Pre-Petition CoBank Agent granting a Lien on Property of any Person to secure
the obligations and liabilities of any Debtor under the Pre-Petition CoBank Loan
Documents.

           

          “Pre-Petition Foreign
Borrower” means each of To-Ricos and To-Ricos Distribution.

           

          “Property” means, as to any
Person, all types of real, personal, tangible, intangible or mixed property
owned by such Person whether or not included in the most recent balance sheet of
such Person and its subsidiaries under GAAP.

           

          “RCRA” means the Solid Waste
Disposal Act, as amended by the Resource Conservation and Recovery Act of 1976
and Hazardous and Solid Waste Amendments of 1984, 42 U.S.C. §§ 6901 et
seq., and any future amendments.

           

          “Receivables” means all
rights to the payment of a monetary obligation, now or hereafter owing to the
Borrower or any Guarantor, evidenced by accounts, instruments, chattel paper,
payment intangibles or general intangibles.

           

          “Receivables Purchase
Agreement” means the Amended and Restated Receivables Purchase Agreement
dated as of September 26, 2008, among Pilgrim’s Pride Funding Corporation,
as Seller, the Borrower, as Servicer, the various purchasers and purchaser
agents from time to time parties thereto and BMO Capital Markets Corp., as
Administrator, as supplemented, amended, restated and otherwise modified from
time to time.

           

          “Register” shall have the
meaning set forth in Section 12.12(b) hereof.

           

          “Reimbursement Obligation”
shall have the meaning set forth in Section 1.2(c) hereof.

           

          “Release” means any spilling,
leaking, pumping, pouring, emitting, emptying, discharging, injecting, escaping,
leaching, migration, dumping, or disposing into the indoor or outdoor
environment, including, without limitation, the abandonment or discarding of
barrels, drums, containers, tanks or other receptacles containing or previously
containing any Hazardous Material.

           

          
            
              
              

            

            
              -39-

              
                

              

            

            
              
              

            

          

           

          “Replacement Liens” means
(a) with respect to the Pre-Petition BMO Credit Facilities, the replacement
Liens granted to the Pre-Petition BMO Agent on all Collateral for and to the
extent of the post-petition use of Pre-Petition BMO Collateral and proceeds
thereof and for any post-petition diminution in value of Pre-Petition BMO
Collateral, and (b) with respect to the Pre-Petition CoBank Credit
Facilities, the replacement Liens granted to the Pre-Petition CoBank Agent on
all Collateral for and to the extent of the post-petition use of Pre-Petition
CoBank Collateral and proceeds thereof and for any post-petition diminution in
value of Pre-Petition CoBank Collateral

           

          “Reporting Date” means, with
respect to any fiscal month, the date occurring the number of days after the
last day of such fiscal month set forth below opposite such fiscal
month:

           

          

          
            	
                    Fiscal
      Month

                  	
                    Number
      of days after the last day of the Fiscal month

                  
	
                    October

                  	
                    60

                  
	
                    November

                  	
                    30

                  
	
                    December

                  	
                    45

                  
	
                    January

                  	
                    45

                  
	
                    February

                  	
                    30

                  
	
                    March

                  	
                    45

                  
	
                    April

                  	
                    45

                  
	
                    May

                  	
                    30

                  
	
                    June

                  	
                    45

                  
	
                    July

                  	
                    45

                  
	
                    August

                  	
                    30

                  
	
                    September

                  	
                    90

                  

          

           

          “Required Lenders” means, as
of the date of determination thereof, Lenders holding more than 50% of the DIP
Commitments then in effect or, if the DIP Commitments have been terminated or
expired, Lenders whose outstanding Loans and interests in Letters of Credit
constitute more than 50% of the sum of the total outstanding Loans and interests
in Letters of Credit.

           

          “Restricted Group” means the
Borrower and its Subsidiaries other than Avicola and its
Subsidiaries.

           

          “Restricted Payment” shall
have the meaning set forth in Section 8.12 hereof.

           

          “Revolving Note” shall have
the meaning set forth in Section 1.10(d) hereof.

           

          “Secured Grower Payables”
shall mean all amounts owed from time to time by the Borrower or any Guarantor
to any Person on account of the purchase price of agricultural 

           

          
            
              
              

            

            
              -40-

              
                

              

            

            
              
              

            

             

            products
or services (including poultry and livestock) if the DIP Agent reasonably
determines that such Person is entitled to the benefits of any grower’s or
producer’s lien, statutory trust or similar security arrangements to secure the
payment of any amounts owed to such Person.

          

           

          “Subsidiary” means, as to any
particular parent corporation or organization, any other corporation or
organization, more than 50% of the voting power of the outstanding Voting Stock
of which is at the time directly or indirectly owned by such parent corporation
or organization or by any one or more other entities which are themselves
Subsidiaries of such parent corporation or organization.  Unless
otherwise expressly noted herein, the term “Subsidiary” means a direct or indirect
Subsidiary of the Borrower.

           

          “Super-majority Lenders”
means, as of the date of determination thereof, Lenders holding more than
66-2/3% of the DIP Commitments then in effect or, if the DIP Commitments have
been terminated or expired, Lenders whose outstanding Loans and interests in
Letters of Credit constitute more than 66-2/3% of the sum of the total
outstanding Loans and interests in Letters of Credit.

           

          “Superpriority Claim” shall
mean a claim against the Borrower or any of the Guarantors which is an
administrative expense claim with the priority authorized under
Section 364(c)(1) of the Bankruptcy Code, with priority over any or all
administrative expenses of the kind specified in Sections 503(b) or 507 of
the Bankruptcy Code and over any or all other costs and expenses of the kind
specified in, or ordered pursuant to, Sections 105, 326, 330, 331, 506(c)
or 726 of the Bankruptcy Code, whether arising or incurred in any of the Chapter
11 Cases or in any superseding case or cases under Chapter 7 of the Bankruptcy
Code, except for the fees and expenses of the Chapter 7
Trustee.

           

          “Swing Line” means the
credit facility for making one or more Swing Loans described in Section 1.6
hereof.

           

          “Swing Line Lender” means
Bank of Montreal, acting in its capacity as the Lender of Swing Loans hereunder,
or any successor Lender acting in such capacity appointed pursuant to
Section 12.12 hereof.

           

          “Swing Line Sublimit” means
$25,000,000, as reduced pursuant to the terms hereof.

           

          “Swing Loan” and “Swing Loans” shall have the
meaning set forth in Section 1.6 hereof.

           

          “Swing Note” shall have the
meaning set forth in Section 1.10 hereof.

           

          “Termination Date” means the
earliest to occur of the following: (a) the Maturity Date; (b) the
date that a plan of reorganization of any Debtor confirmed by an order of the
Bankruptcy Court entered pursuant to Sections 1129 and 1141 of the
Bankruptcy Code becomes effective pursuant to its terms, other than a plan of
reorganization that contemplates the sale of the stock or assets of a Guarantor
to which the Required Lenders have given their prior written consent or any
other plan of reorganization of a Guarantor to which the Required Lenders have
given their prior written consent; or (c) the date on which the Lenders
terminate the DIP Commitments after the 

           

          
            
              
              

            

            
              -41-

              
                

              

            

            
              
              

            

             

            occurrence
of an Event of Default and giving of five Business Days written notice by the
DIP Agent to the Borrower of such Event of Default and of the Lenders’ intention
to terminate the DIP Commitments as a result
thereof.  

          

           

          “To-Ricos” shall have the
meaning set forth in the preamble hereof.

           

          “To-Ricos Distribution” shall
have the meaning set forth in the preamble hereof.

           

          “Unfunded Vested Liabilities”
means, for any Plan at any time, the amount (if any) by which the present value
of all vested nonforfeitable accrued benefits under such Plan exceeds the fair
market value of all Plan assets allocable to such benefits, all determined as of
the then most recent valuation date for such Plan, but only to the extent that
such excess represents a potential liability of a member of the Controlled Group
to the PBGC or the Plan under Title IV of ERISA.

           

          “Unused DIP Commitments”
means, at any time, the difference between the DIP Commitments then in effect
and the aggregate outstanding principal amount of Loans and L/C
Obligations.

           

          “U.S. Dollars” and “$” each means the lawful
currency of the United States of America.

           

          “Value” means, with respect
to Eligible Inventory consisting of live broiler chickens, a price per pound
equal to 75% of (i) the price quoted on the Los Angeles Majority Market on the
date of calculation minus (ii) $0.085, rounded up to the nearest 1/4
cent.

           

          “Voting Stock” of any Person
means capital stock or other equity interests of any class or classes (however
designated) having ordinary power for the election of directors or other similar
governing body of such Person, other than stock or other equity interests having
such power only by reason of the happening of a contingency.

           

          “Welfare Plan” means a “welfare plan” as defined in
Section 3(1) of ERISA.

           

              Section
5.2   Interpretation.  The
foregoing definitions are equally applicable to both the singular and plural
forms of the terms defined.  The words “include”, “includes” and
“including” shall be deemed to be followed by the phrase “without
limitation”.  Unless the context requires otherwise (a) any definition
of or reference to any agreement, instrument or other document herein shall be
construed as referring to such agreement, instrument or other document as from
time to time amended, restated, amended and restated, supplemented or otherwise
modified (subject to any restrictions on such amendments, supplements or
modifications set forth herein), (b) any reference herein to any Person shall be
construed to include such Person’s permitted successors and permitted assigns,
and (c) the words “asset” and “property” shall mean and be construed to refer to
Property.  The words “hereof,” “herein,” and “hereunder” and words of
like import when used in this Agreement shall refer to this Agreement as a whole
and not to any particular provision of this Agreement.  All references
to time of day herein are references to Chicago, Illinois time unless otherwise
specifically provided.  Where the character or amount of 

           

          
            
              
              

            

            
              -42-

              
                

              

            

            
              
              

            

          

           

          any asset
or liability or item of income or expense is required to be determined, any
consolidation or other accounting computation is required to be made or any
accounting term is required to be interpreted, in each case for the purposes of
this Agreement, it shall be done in accordance with GAAP except where such
principles are inconsistent with the specific provisions of this
Agreement.

           

              Section
5.3   Change
in Accounting Principles.  If, after the date of this
Agreement, there shall occur any change in GAAP or the application thereof from
those used in the preparation of the financial statements referred to in
Section 6.5 hereof and such change shall result in a change in the method
of calculation of any financial covenant, standard or term found in this
Agreement or the application thereof, either the Borrower or the Required
Lenders may by notice to the Lenders and the Borrower, respectively, require
that the Lenders and the Borrower negotiate in good faith to amend such
covenants, standards, and terms so as equitably to reflect such change in
accounting principles or the application thereof, with the desired result being
that the criteria for evaluating the financial condition of the Borrower and its
Subsidiaries shall be the same as if such change had not been
made.  No delay by the Borrower or the Required Lenders in requiring
such negotiation shall limit their right to so require such a negotiation at any
time after such a change in accounting principles or the application
thereof.  Until any such covenant, standard, or term is amended in
accordance with this Section 5.3, financial covenants shall be computed and
determined in accordance with GAAP in effect prior to such change in accounting
principles or the application thereof.  Without limiting the
generality of the foregoing, the Borrower shall neither be deemed to be in
compliance with any financial covenant hereunder nor out of compliance with any
financial covenant hereunder if such state of compliance or noncompliance, as
the case may be, would not exist but for the occurrence of a change in
accounting principles or the application thereof after the date
hereof.

           

              Section
5.4   Timing
of Payment or Performance.  When the payment of any obligation
or the performance of any covenant, duty or obligation is stated to be due or
performance required on a day which is not a Business Day, the date of such
payment or performance shall extend to the immediately succeeding Business Day
and such extension of time shall be reflected in computing interest or fees, as
the case may be.

           

          
            	
                     
      

                  	
                    Section
      6.Representations and Warranties.

                  

          

           

          The
Borrower represents and warrants to the DIP Agent, the Lenders, and the
L/C Issuer as follows:

           

              Section
6.1   Organization and
Qualification.  The Borrower is duly organized, validly
existing, and in good standing as a corporation under the laws of the State of
Delaware, has full and adequate power to own its Property and conduct its
business as now conducted, and is duly licensed or qualified and in good
standing in each jurisdiction in which the nature of the business conducted by
it or the nature of the Property owned or leased by it requires such licensing
or qualifying, except where the failure to do so would not have a Material
Adverse Effect.

           

              Section
6.2   Subsidiaries.  Each
Subsidiary is duly organized, validly existing, and in good standing under the
laws of the jurisdiction in which it is organized, has full and adequate

           

          
            
              
              

            

            
              -43-

              
                

              

            

            
              
              

            

          

           

          power to
own its Property and conduct its business as now conducted, and is duly licensed
or qualified and in good standing in each jurisdiction in which the nature of
the business conducted by it or the nature of the Property owned or leased by it
requires such licensing or qualifying, except where the failure to do so would
not have a Material Adverse Effect.  Schedule 6.2 hereto (as
supplemented in accordance with this Agreement) identifies each Subsidiary, the
jurisdiction of its organization, the percentage of issued and outstanding
shares of each class of its capital stock or other equity interests owned by the
Borrower and the other Subsidiaries and, if such percentage owned by the
Borrower and the Subsidiaries is not 100% (excluding directors’ qualifying
shares as required by law), a description of each class of its authorized
capital stock and other equity interests and the number of shares of each class
issued and outstanding.  Except as disclosed in Schedule 6.2 (as
supplemented in accordance with this Agreement), all of the outstanding shares
of capital stock and other equity interests of each Subsidiary are validly
issued and outstanding and fully paid and nonassessable and all such shares and
other equity interests indicated on Schedule 6.2 (as supplemented in
accordance with this Agreement) as owned by the Borrower or another Subsidiary
are owned, beneficially and of record, by the Borrower or such Subsidiary free
and clear of all Liens other than the Liens granted in favor of the DIP Agent
pursuant to this Agreement and the Financing Orders.  There are no
outstanding commitments or other obligations of any Subsidiary to issue, and no
options, warrants or other rights of any Person to acquire, any shares of any
class of capital stock or other equity interests of any Subsidiary other than
pursuant to buy/sell or similar arrangements set forth in the partnership
agreements or limited liability company operating agreements, as applicable, of
certain non-wholly-owned Subsidiaries.  Promptly upon the occurrence
of any change in any information contained in Schedule 6.2 the Borrower
shall submit to the DIP Agent a proposed revised form of Schedule 6.2, and
upon acceptance by the DIP Agent of such proposed revised form it shall be
Schedule 6.2 of this Agreement.

           

              Section
6.3   Authority and Validity of
Obligations.  The Borrower has full right and authority to
enter into this Agreement and the other Loan Documents executed by it, to make
the borrowings herein provided for, to grant to the DIP Agent the Liens
described in the Collateral Documents executed by the Borrower, and to perform
all of its obligations hereunder and under the other Loan Documents executed by
it.  Each Guarantor has full right and authority to enter into the
Loan Documents executed by it, to guarantee the Post-Petition Obligations, to
grant to the DIP Agent the Liens described in this Agreement and the Financing
Orders, and to perform all of its obligations under the Loan Documents executed
by it.  The Loan Documents delivered by the Debtors have been duly
authorized, executed, and delivered by such Persons and constitute valid and
binding obligations of the Debtors enforceable against them in accordance with
their terms; and this Agreement and the other Loan Documents do not, nor does
the performance or observance by any Debtor of any of the matters and things
herein or therein provided for, (a) contravene or constitute a default
under any provision of law or any judgment, injunction, order or decree binding
upon such Debtor or any provision of the organizational documents (e.g.,
charter, certificate or articles of incorporation and by-laws, certificate or
articles of association and operating agreement, partnership agreement, or other
similar organizational documents) of such Debtor, (b) contravene or
constitute a default under any covenant, indenture or agreement of or affecting
the Borrower or any Subsidiary or any of their Property, in each case where such
contravention or default, individually or in the aggregate, could reasonably be
expected to have a Material Adverse Effect (it being understood that any
covenant, indenture or 

           

          
            
              
              

            

            
              -44-

              
                

              

            

            
              
              

            

          

           

          agreement
subject to the automatic stay could not be expected to have a Material Adverse
Effect), or (c) result in the creation or imposition of any Lien on any
Property of the Borrower or any Subsidiary other than the Liens granted in favor
of the DIP Agent pursuant to the Collateral Documents.

           

              Section
6.4   Use of
Proceeds; Margin Stock.  The Borrower shall use the credit
extended under this Agreement solely for the purposes set forth in, or otherwise
permitted by, Section 8.19 hereof.  Neither the Borrower nor any
Subsidiary is engaged in the business of extending credit for the purpose of
purchasing or carrying margin stock (within the meaning of Regulation U of
the Board of Governors of the Federal Reserve System), and no part of the
proceeds of any Loan or any other extension of credit made hereunder will be
used to purchase or carry any such margin stock or to extend credit to others
for the purpose of purchasing or carrying any such margin
stock.  Margin stock constitutes less than 25% of the assets of the
Borrower and its Subsidiaries which are subject to any limitation on sale,
pledge or other restriction hereunder.

           

              Section
6.5   Financial
Reports.  The consolidated balance sheet of the Borrower and
its Subsidiaries as at September 29, 2007, and the related consolidated
statements of income, retained earnings and cash flows of the Borrower and its
Subsidiaries for the fiscal year then ended, and accompanying notes thereto,
which financial statements are accompanied by the audit report of Ernst &
Young LLP, independent public accountants, and the unaudited interim
consolidated balance sheet of the Borrower and its Subsidiaries as at
June 28, 2008, and the related consolidated statements of income, retained
earnings and cash flows of the Borrower and its Subsidiaries for the
9 months then ended, heretofore furnished to the DIP Agent and the Lenders,
fairly present the consolidated financial condition of the Borrower and its
Subsidiaries as at said dates and the consolidated results of their operations
and cash flows for the periods then ended in conformity with
GAAP.  Neither the Borrower nor any Subsidiary has contingent
liabilities required to be disclosed in accordance with GAAP which are material
to it other than as indicated on such financial statements or, with respect to
future periods, on the financial statements furnished pursuant to
Section 8.5 hereof.

           

              Section
6.6   No
Material Adverse Change.  Since the Petition Date there has
been no change in the condition (financial or otherwise) or business prospects
of the Borrower and its Subsidiaries taken as a whole except those occurring in
the ordinary course of business, none of which individually or in the aggregate
could reasonably be expected to have a Material Adverse Effect.

           

              Section
6.7   Full
Disclosure.  The written statements and information furnished
to the DIP Agent and the Lenders in connection with the negotiation of this
Agreement and the other Loan Documents and the commitments by the Lenders to
provide all or part of the financing contemplated hereby taken as a whole did
not as of the date furnished contain any untrue statements of a material fact or
omit a material fact necessary to make the material statements contained herein
or therein not materially misleading.  The projections or other
forward looking information furnished to the DIP Agent and the Lenders were, at
the time of submission, based on reasonable estimates and assumptions stated
therein, and reflected the reasonable estimate of Borrower of the results of
operations and other information projected therein.  Nothing in this

           

          
            
              
              

            

            
              -45-

              
                

              

            

            
              
              

            

          

           

          Section shall
be deemed to constitute an assurance by Borrower or its Subsidiaries that it
will meet the results contained in such projections.

           

              Section
6.8   Trademarks, Franchises, and
Licenses.  The Borrower and its Subsidiaries own, possess, or
have the right to use all necessary patents, licenses, franchises, trademarks,
trade names, trade styles, copyrights, trade secrets, know how, and confidential
commercial and proprietary information to conduct their businesses as now
conducted, without known conflict with any patent, license, franchise,
trademark, trade name, trade style, copyright or other proprietary right of any
other Person which conflict could reasonably be expected to have a material
adverse effect on the ability of the Borrower and its Subsidiaries to conduct
their businesses as now conducted.

           

              Section
6.9   Governmental Authority and
Licensing.  The Borrower and its Subsidiaries have received all
licenses, permits, and approvals of all federal, state, and local governmental
authorities, if any, necessary to conduct their businesses, in each case where
the failure to obtain or maintain the same could reasonably be expected to have
a Material Adverse Effect.  No investigation or proceeding which could
reasonably be expected to result in revocation or denial of any material
license, permit or approval is pending or, to the knowledge of the Borrower,
threatened, that could reasonably be expected to have a material adverse effect
on the ability of the Borrower and its Subsidiaries to conduct their businesses
as now conducted.

           

              Section
6.10   Good
Title.  The Borrower and its Subsidiaries have good and
defensible title (or valid leasehold interests) to their material assets as
reflected on the most recent consolidated balance sheet of the Borrower and its
Subsidiaries furnished to the DIP Agent and the Lenders (except for sales of
assets in the ordinary course of business or otherwise permitted hereunder),
subject to no Liens other than such thereof as are permitted by Section 8.8
hereof.

           

              Section
6.11   Litigation and Other
Controversies.  There is no litigation or governmental or
arbitration proceeding or labor controversy pending, nor to the knowledge of the
Borrower threatened, against the Borrower or any Subsidiary or any of their
Property which, individually or in the aggregate, could reasonably be expected
to have a Material Adverse Effect.

           

              Section
6.12   Taxes.  All federal
and other material tax returns required to be filed by the Borrower or any
Subsidiary in any jurisdiction have, in fact, been filed, and all taxes,
assessments, fees, and other governmental charges upon the Borrower or any
Subsidiary or upon any of their Property, income or franchises after the
Petition Date, which are shown to be due and payable in such returns, have been
paid, except (i) in the case of the Debtors, taxes, assessments, fees and
other governmental charges for periods prior to the Petition Date and
(ii) such taxes, assessments, fees and governmental charges, if any, as are
being contested in good faith and by appropriate proceedings which prevent
enforcement of the matter under contest and as to which adequate reserves
established in accordance with GAAP have been provided.  The Borrower
does not know of any proposed additional tax assessment against it or its
Subsidiaries for which adequate provisions in accordance with GAAP have not been
made on their accounts.  Adequate provisions in accordance with GAAP
for taxes on the books of the Borrower and each Subsidiary have been made for
all open years, and for its current fiscal period.

           

          
            
              
              

            

            
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              Section
6.13   Approvals.  No
authorization, consent, license or exemption from, or filing or registration
with, any court or governmental department, agency or instrumentality, nor any
approval or consent of any other Person, is or will be necessary to the valid
execution, delivery or performance by the Borrower or any Subsidiary of any Loan
Document, except for such approvals which have been obtained prior to the date
of this Agreement and remain in full force and effect and the entry by the
Bankruptcy Court of the relevant Financing Order.

           

              Section 6.14.  
Affiliate
Transactions.  Neither the Borrower nor any Subsidiary is a
party to any transaction, including without limitation, the purchase, sale,
lease or exchange of any Property, or the rendering of any service, with any
Affiliate of the Borrower or such Subsidiary except (a) pursuant to the
reasonable requirements of the Borrower’s or such Subsidiary’s business and, in
the case of any Affiliate that is not a Debtor, upon fair and reasonable terms
not materially less favorable to the Borrower or such Subsidiary than would be
obtained in a comparable arm’s-length transaction with a Person not an Affiliate
of the Borrower or such Subsidiary, (b) on-going transactions with
Affiliates of the type disclosed in the Borrower’s proxy statement for its
fiscal year ended September 30, 2006, (c) the sale of all or
substantially all of the Borrower’s or a Subsidiary’s Receivables pursuant to
the Fairway Receivables Securitization Program and prior to the Petition Date,
(d) any transaction entered into between any of the Subsidiaries,
(e) certain guaranties entered into prior to the Petition Date,
(f) the payment of guaranty fees to Pilgrim Interests prior to the Petition
Date, and (g) after the Petition Date, as permitted by  Section
8.15.

           

              Section
6.15   Investment
Company.  Neither the Borrower nor any Subsidiary is an
“investment company” or a company “controlled” by an “investment company” within
the meaning of the Investment Company Act of 1940, as amended.

           

              Section
6.16   ERISA.  Except as
disclosed on Schedule 6.16, the Borrower and each other member of its
Controlled Group has fulfilled its obligations under the minimum funding
standards of ERISA and the Code to the extent applicable to it and has not
incurred any material liability to the PBGC or a Plan under Title IV of
ERISA other than a liability to the PBGC for premiums under Section 4007 of
ERISA.  Except as set forth on Schedule 6.16, neither the
Borrower nor any Subsidiary has any material contingent liabilities with respect
to any post-retirement benefits under a Welfare Plan, other than liability for
continuation coverage described in article 6 of Title I of
ERISA.  

           

              Section
6.17   Compliance with
Laws.  (a) The Borrower and its Subsidiaries are in
compliance with the requirements of all federal, state and local laws, rules and
regulations applicable to or pertaining to their Property or business operations
(including, without limitation, the Occupational Safety and Health Act of 1970,
ERISA and the Code, the Americans with Disabilities Act of 1990, and laws and
regulations establishing quality criteria and standards for air, water, land and
toxic or hazardous wastes and substances), where any such non-compliance,
individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect.  Neither the Borrower nor any Subsidiary has
received notice to the effect that its operations are not in compliance with any
of the requirements of applicable federal, state or local environmental, health,
and safety statutes and regulations or is the subject of any governmental
investigation evaluating whether any remedial action is needed to respond to a
release of any 

           

          
            
              
              

            

            
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          toxic or
hazardous waste or substance into the environment, where any such non-compliance
or remedial action, individually or in the aggregate, could reasonably be
expected to have a Material Adverse Effect.

           

              (b) 
Without limiting the representations and warranties set forth in
Section 6.17(a) above, except for such matters, individually or in the
aggregate, which could not reasonably be expected to result in a Material
Adverse Effect, the Borrower represents and warrants
that:  (i) the Borrower and its Subsidiaries, and each of the
Premises, comply in all material respects with all applicable Environmental
Laws; (ii) the Borrower and its Subsidiaries have obtained all governmental
approvals required for their operations and each of the Premises by any
applicable Environmental Law; (iii) the Borrower and its Subsidiaries have
not, and the Borrower has no knowledge of any other Person who has, caused any
Release, threatened Release or disposal of any Hazardous Material at, on or
about any of the Premises in any material quantity and, to the knowledge of the
Borrower, none of the Premises are adversely affected by any Release, threatened
Release or disposal of a Hazardous Material originating or emanating from any
other property; (iv)  none of the Premises contain and have contained
any:  (1) underground storage tank, (2) material amounts of
asbestos containing building material, (3) landfills or dumps,
(4) hazardous waste management facility as defined pursuant to RCRA or any
comparable state law, or (5) site on or nominated for the National Priority
List promulgated pursuant to CERCLA or any state remedial priority list
promulgated or published pursuant to any comparable state law; (v) the
Borrower and its Subsidiaries have not used a material quantity of any Hazardous
Material and have conducted no Hazardous Material Activity at any of the
Premises; (vi) the Borrower and its Subsidiaries have no material liability
for response or corrective action, natural resource damage or other harm
pursuant to CERCLA, RCRA or any comparable state law; (vii) the Borrower
and its Subsidiaries are not subject to, have no notice or knowledge of and are
not required to give any notice of any Environmental Claim involving the
Borrower or any Subsidiary or any of the Premises, and to the actual knowledge
of Borrower there are no conditions or occurrences at any of the Premises which
could reasonably be anticipated to form the basis for an Environmental Claim
against the Borrower or any Subsidiary or such Premises; (viii) none of the
Premises are subject to any, and the Borrower has no knowledge of any imminent
restriction on the ownership, occupancy, use or transferability of the Premises
in connection with any (1) Environmental Law or (2) Release,
threatened Release or disposal of a Hazardous Material; and (ix) to the
actual knowledge of Borrower there are no conditions or circumstances at any of
the Premises which pose an unreasonable risk to the environment or the health or
safety of Persons.

           

              Section
6.18   Other
Agreements.  Neither the Borrower nor any Subsidiary is in
default under the terms of any covenant, indenture or agreement of or affecting
such Person or any of its Property (other than defaults occasioned by the filing
of the Chapter 11 Cases), which default could reasonably be expected to have a
Material Adverse Effect.

           

              Section
6.19   No
Default.  No Default or Event of Default has occurred and is
continuing.

           

              Section
6.20   Financing
Orders.  The applicable Financing Order has been duly entered,
is valid, subsisting and continuing and has not been vacated, modified, or
reversed on appeal by any court and is not subject to any pending stay, in the
case of a modification in a manner which 

           

          
            
              
              

            

            
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          materially
and adversely affects the rights of the Lenders or the DIP Agent and which
modification is not acceptable to the Required Lenders.

           

              Section
6.21   Super-Priority Administrative
Expense and Liens.  From and after the entry of the Interim
Financing Order, (a) the Post-Petition Obligations shall constitute
Superpriority Claims, and (b) pursuant to Sections 364(c)(2) and 364(d)(1)
of the Bankruptcy Code, the Post-Petition Obligations shall be secured by a
first priority Lien on the Collateral, subject only to the Permitted Liens (with
respect to clause (b) herein) and the fees and expenses subject to the
Administrative Expense Carve-Out (with respect to both clause (a) and clause (b)
herein).

           

          
            	
                     
      

                  	
                    Section
      7.Conditions Precedent.

                  

          

           

              Section
7.1   All
Credit Events.  At the time of each Credit Event
hereunder:

           

              (a) 
each of the representations and warranties set forth herein and in the other
Loan Documents shall be and remain true and correct in all material respects as
of said time, 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;

           

              (b)  no
Default or Event of Default shall have occurred and be continuing or would occur
as a result of such Credit Event;

           

              (c)  in
the case of a Borrowing, the DIP Agent shall have received the notice required
by Section 1.5 hereof, in the case of the issuance of any Letter of Credit,
the L/C Issuer shall have received a duly completed Application for such
Letter of Credit together with any fees called for by Section 2.1 hereof,
and, in the case of an extension or increase in the amount of a Letter of
Credit, a written request therefor in a form acceptable to the L/C Issuer
together with fees called for by Section 2.1 hereof;

           

              (d)  at
the time of and immediately after giving effect to such Borrowing or the
issuance, amendment, renewal or extension of such Letter of Credit, as
applicable, the aggregate principal amount of all Loans and L/C Obligations then
outstanding shall not exceed the lesser of (i) the DIP Commitments then in
effect and (ii) the Borrowing Base as then determined;

           

              (e)  the
applicable Financing Order shall be in full force and effect and the Debtors
shall be in compliance with the terms thereof and the applicable Financing Order
shall be entered, not subject to a motion to reconsider and not subject to any
stay;

           

              (f) 
prior to making any Loans or issuing any Letters of Credit in an aggregate
amount in excess of the Interim Financing Order Amount, the Final Financing
Order, after notice given and a hearing conducted in accordance with Bankruptcy
Rule 4001(c) shall have been entered by the Bankruptcy Court; and

           

              (g) 
such Credit Event shall not violate any order, judgment or decree of any court
or other authority or any provision of law or regulation applicable to the DIP
Agent, 

           

          
            
              
              

            

            
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          the
L/C Issuer, or any Lender (including, without limitation, Regulation U
of the Board of Governors of the Federal Reserve System) as then in effect (it
being understood that the inability of any Lender to make its pro rata share of
any Credit Event shall not excuse any other Lender from its obligations to fund
and/or participate in its pro rata share of such Credit Event); and

           

              (h)   the
cash management order entered on December 2, 2008 by the Bankruptcy Court shall
not have been amended, stayed, vacated, reversed or modified (in the case of an
amendment or modification in a manner which materially and adversely affects the
rights of the Lenders or the DIP Agent and which amendment or modification is
not acceptable to the Required Lenders);

           

          Each
request for a Borrowing hereunder and each request for the issuance of, increase
in the amount of, or extension of the expiration date of, a Letter of Credit
shall be deemed to be a representation and warranty by the Borrower on the date
of such Credit Event as to the facts specified in subsections (a) through
(e), both inclusive, of this Section; provided, however, that the Lenders may
continue to make advances under the DIP Credit, in the sole discretion of the
Lenders with DIP Commitments, notwithstanding the failure of the Borrower to
satisfy one or more of the conditions set forth above and any such advances so
made shall not be deemed a waiver of any Default or Event of Default or other
condition set forth above that may then exist.

           

              Section
7.2   Conditions to
Effectiveness.  The effectiveness of this Agreement is subject
to the satisfaction of all of the following conditions precedent:

           

              (a)  the
DIP Agent shall have received this Agreement duly executed by the Borrower, the
Guarantors and the Lenders;

           

              (b)  if
requested by any Lender, the DIP Agent shall have received for such Lender such
Lender’s duly executed Notes of the Borrower dated the date hereof and otherwise
in compliance with the provisions of Section 1.10 hereof;

           

              (c)  the
DIP Agent shall have received a certificate of the Secretary or Assistant
Secretary of the Borrower and each Guarantor to the effect that from and after
the Petition Date no  amendments or other modifications to the
Borrower’s or such Guarantor’s articles of incorporation and bylaws (or
comparable organizational documents) and any amendments thereto made prior to
the Petition Date, have been made;

           

              (d)  the
DIP Agent shall have received copies of resolutions of the Borrower’s and each
Guarantor’s Board of Directors (or similar governing body) authorizing the
execution, delivery and performance of this Agreement and the other Loan
Documents to which it is a party and the consummation of the transactions
contemplated hereby and thereby, together with specimen signatures of the
persons authorized to execute such documents on the Borrower’s and each
Guarantor’s behalf, all certified in each instance by its Secretary or Assistant
Secretary;

           

          
            
              
              

            

            
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              (e)  the
DIP Agent shall have received copies of the certificates of good standing for
To-Ricos and To-Ricos Distribution (dated no earlier than 30 days prior to
the date hereof) from the office of the secretary of the state (or the
equivalent office) of its jurisdiction of organization;

           

              (f)  the
Final Financing Order in the form of Exhibit C hereto after notice given
and a hearing conducted in accordance with Bankruptcy Rule 4001(c) shall have
been entered by the Bankruptcy Court and shall not have been amended, stayed,
vacated, reversed or modified (in the case of an amendment or modification in a
manner which materially and adversely affects the rights of the Lenders or the
DIP Agent and which amendment or modification is not acceptable to the Required
Lenders);

           

              (g) 
receipt by the DIP Agent and the Lenders of the Budget, in form and substance
satisfactory to the DIP Agent and the Lenders, including itemization on a weekly
basis of all material expenditures proposed to be made during the first 13
weeks;

           

              (h)  no
trustee, or other disinterested Person with expanded powers pursuant to
Section 1104(c) of the Bankruptcy Code, shall have been appointed or
designated with respect to any Debtor or its respective business, assets or
Properties, including, without limitation the Collateral, no order shall be
entered appointing such a trustee or other disinterested Person and no motion by
or supported by the Debtors shall be pending seeking such relief;

           

              (i)  the
Borrower shall have reimbursed the Pre-Petition BMO Agent and the Pre-Petition
BMO Lenders for all fees and expenses incurred by them, including the reasonable
fees and expenses of Chapman and Cutler LLP, Chapman and Cutler LLP’s local
counsel, Morgan, Lewis & Bockius LLP and FTI Consulting, Inc., in connection
with the Pre-Petition BMO Credit Agreement and the transactions contemplated
hereby for which the Borrower has received an invoice;

           

              (j)  the
Borrower shall have paid the reasonable out-of-pocket costs and expenses
(including the reasonable fees and expenses of Chapman and Cutler LLP, Chapman
and Cutler LLP’s local counsel, Morgan, Lewis & Bockius LLP and FTI
Consulting, Inc.) incurred by the Lenders and the DIP Agent in connection with
this Agreement and the transaction contemplated hereby for which the Borrower
has received an invoice;

           

              (k)  the
DIP Agent’s Liens in the Collateral shall be perfected first priority
Liens  and the Collateral shall be free and clear of all other Liens
except Permitted Liens;

           

              (l)  the
DIP Agent shall have received the favorable written opinion of counsel to the
Debtors in form and substance reasonably satisfactory to the DIP Agent and the
Lenders; and

           

              (m)  the
DIP Agent and the Lenders shall have received such other agreements,
instruments, documents, certificates, and opinions as the DIP Agent and Lenders
may

           

          
            
              
              

            

            
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          reasonably
request and which are reasonably satisfactory in form and substance to the
Lenders.

           

          
            	
                     
      

                  	
                    Section
      8.Covenants.

                  

          

           

          The
Borrower agrees that, so long as any credit is available to or in use by the
Borrower hereunder, except to the extent compliance in any case or cases is
waived in writing pursuant to the terms of Section 12.13
hereof:

           

              Section
8.1   Maintenance of
Business.  The Borrower shall, and shall cause each Subsidiary
to, preserve and maintain its existence.  The Borrower shall, and
shall cause each Subsidiary to, preserve and keep in force and effect all
licenses, permits, franchises, approvals, patents, trademarks, trade names,
trade styles, copyrights, and other proprietary rights necessary to the proper
conduct of its business where the failure to do so could reasonably be expected
to have a Material Adverse Effect.

           

              Section
8.2   Maintenance of
Properties.  The Borrower shall, and shall cause each
Subsidiary to, maintain, preserve, and keep its material property, plant, and
equipment in good repair, working order and condition (ordinary wear and tear
and casualty or condemnation excepted), and shall from time to time make all
needful and proper repairs, renewals, replacements, additions, and betterments
thereto so that at all times the efficiency thereof shall be fully preserved and
maintained, except to the extent that, (i) in the reasonable business
judgment of such Person, any such Property is no longer necessary for the proper
conduct of the business of such Person or (ii) such repair, renewal,
replacement, addition or betterment is not permitted by the Budget.

           

              Section
8.3   Taxes
and Assessments.  The Borrower shall duly pay and discharge,
and shall cause each Subsidiary to duly pay and discharge, all federal and other
material taxes, assessments, fees, and other governmental charges upon or
against it or its Property, in the case of the Debtors, for periods after the
Petition Date, in each case before the same become delinquent and before
penalties accrue thereon, unless and to the extent that (i) the same are
being contested in good faith and by appropriate proceedings which prevent
enforcement of the matter under contest and adequate reserves are provided
therefor, or (ii) in the case of the Debtors, such taxes, assessments, fees
or other governmental charges relate to periods prior to the Petition
Date.

           

              Section
8.4   Insurance.  The
Borrower shall insure and keep insured, and shall cause each Subsidiary to
insure and keep insured, with good and responsible insurance companies, all
insurable Property owned by it which is of a character usually insured by
Persons similarly situated and operating like Properties against loss or damage
from such hazards and risks, and in such amounts, as are insured by Persons
similarly situated and operating like Properties; and the Borrower shall insure,
and shall cause each Subsidiary to insure, such other hazards and risks
(including, without limitation, business interruption, employers’ and public
liability risks) with good and responsible insurance companies as and to the
extent usually insured by Persons similarly situated and conducting similar
businesses; provided, that the Borrower and its Subsidiaries may self-insure for
workmen’s compensation, group health risks and their live 

           

          
            
              
              

            

            
              -52-

              
                

              

            

            
              
              

            

          

           

          chicken
inventory in accordance with their past practices.  The Borrower
shall, upon the request of the DIP Agent, furnish to the DIP Agent and the
Lenders a certificate setting forth in summary form the nature and extent of the
insurance maintained pursuant to this Section.

           

              Section
8.5   Financial
Reports.  The Borrower shall, and shall cause each Subsidiary
to, maintain a standard system of accounting allowing the preparation of the
financial statements in accordance with GAAP and shall furnish to the DIP Agent,
each Lender, the L/C Issuer and each of their duly authorized
representatives such information respecting the business and financial condition
of the Borrower and each Subsidiary (including without limitation projections,
budgets, business plans and cash flows) as the DIP Agent or such Lender may
reasonably request; and without any request, shall furnish to the DIP
Agent:

           

              (a)  on
Thursday of each week and promptly after the completion of any Disposition
outside the ordinary course of business that results in Net Proceeds in excess
of $1,000,000 in the aggregate, a Borrowing Base Certificate showing the
computation of the Borrowing Base in reasonable detail as of the close of
business on the last day of the preceding week (or, in the case only of the
portions of the Borrowing Base relating to dressed broilers and prepared foods
located at the Borrower’s plants, branch inventory of packaged items and
packaging materials, vaccines and supplies, as of the close of business on the
last day of the preceding month and, with respect to the quantity of grain
included in the Borrowing Base, using a perpetual inventory system on a weekly
basis and updated on a monthly basis) or after giving effect to such
Disposition, as the case may be, together with an accounts receivable and
accounts payable aging, prepared by the Borrower and certified to by its chief
financial officer, chief restructuring officer, controller, vice president and
assistant to the treasurer and chief financial officer or another officer of the
Borrower reasonably acceptable to the DIP Agent;

           

              (b)  as
soon as available, and in any event no later than 20 days after the last
day of each fiscal month, a copy of the monthly operating report filed with the
Bankruptcy Court;

           

              (c)  as
soon as available, and in any event no later than the applicable Reporting Date
for each fiscal month, a copy of the consolidated balance sheet of the Borrower
and its Subsidiaries as of the last day of such fiscal month and the
consolidated statements of income and cash flows of the Borrower and its
Subsidiaries for the fiscal month and for the fiscal year-to-date period then
ended, each in reasonable detail showing in comparative form the figures for the
corresponding date and period in the previous fiscal year, prepared by the
Borrower (but not necessarily in accordance with GAAP) and certified to by its
chief financial officer, chief restructuring officer or another officer of the
Borrower acceptable to the DIP Agent;

           

              (d)  as
soon as available, and in any event no later than 45 days after the last
day of each fiscal quarter of each fiscal year of the Borrower, a copy of the
consolidated balance sheet of the Borrower and its Subsidiaries as of the last
day of such fiscal quarter and the consolidated statements of income, retained
earnings, and cash flows of the Borrower and its Subsidiaries for the fiscal
quarter and for the fiscal year-to-date period 

           

          
            
              
              

            

            
              -53-

              
                

              

            

            
              
              

            

          

           

          then
ended, each in reasonable detail showing in comparative form the figures for the
corresponding date and period in the previous fiscal year, prepared by the
Borrower in accordance with GAAP (subject to the absence of footnote disclosures
and year-end audit adjustments) and certified to by its chief financial officer,
chief restructuring officer or another officer of the Borrower reasonably
acceptable to the DIP Agent;

           

              (e)  as
soon as available, and in any event no later than 90 days after the last
day of each fiscal year of the Borrower, a copy of the consolidated balance
sheet of the Borrower and its Subsidiaries as of the last day of the fiscal year
then ended and the consolidated statements of income, retained earnings, and
cash flows of the Borrower and its Subsidiaries for the fiscal year then ended,
and accompanying notes thereto, each in reasonable detail showing in comparative
form the figures for the previous fiscal year, accompanied by an opinion of
Ernst & Young LLP or another firm of independent public accountants of
recognized national standing, selected by the Borrower and reasonably
satisfactory to the DIP Agent and the Required Lenders, to the effect that the
consolidated financial statements have been prepared in accordance with GAAP and
present fairly in accordance with GAAP the consolidated financial condition of
the Borrower and its Subsidiaries as of the close of such fiscal year and the
results of their operations and cash flows for the fiscal year then ended and
that an examination of such accounts in connection with such financial
statements has been made in accordance with generally accepted auditing
standards and, accordingly, such examination included such tests of the
accounting records and such other auditing procedures as were considered
necessary in the circumstances;

           

              (f) 
promptly after receipt thereof, any additional final written report or, final
management letters contained in writing concerning significant aspects of the
Borrower’s or any Subsidiary’s operations and financial affairs given to it by
its independent public accountants;

           

              (g) 
promptly after the sending or filing thereof, copies of each financial
statement, report, notice or proxy statement sent by the Borrower or any
Subsidiary to its stockholders or other equity holders generally, and copies of
each regular, periodic or special report, registration statement or prospectus
(including all Form 10-K, Form 10-Q and Form 8-K reports) filed by the Borrower
or any Subsidiary with any securities exchange or the Securities and Exchange
Commission or any successor agency; provided, that information
required to be delivered pursuant to this Section 8.5(f) shall be deemed to
have been delivered if such information shall be available on the website of the
Securities and Exchange Commission at http://www.sec.gov or on the website of
the Borrower.

           

              (h) 
promptly after receipt thereof, a copy of each material audit made by any
regulatory agency of the books and records of the Borrower or any Subsidiary or
of final notice of any material noncompliance with any applicable law,
regulation or guideline relating to the Borrower or any Subsidiary, or its
business (in each case subject to any confidentiality restrictions imposed on
the Borrower or such Subsidiary);

           

          
            
              
              

            

            
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              (i) 
notice of any Change of Control;

           

              (j) 
promptly after knowledge thereof shall have come to the attention of any
Designated Officer of the Borrower, written notice of (i) any threatened
(in writing) or pending litigation or governmental or arbitration proceeding or
labor controversy against the Borrower or any Subsidiary or any of their
Property which could reasonably be expected to have a Material Adverse Effect,
(ii) the occurrence of any Default or Event of Default hereunder, or
(iii) the existence of any material contingent liability not disclosed on
the Borrower’s most recent financial statements;

           

              (k) 
with each of the financial statements delivered pursuant to
subsections (c), (d) and (e) above, a written certificate in the form
attached hereto as Exhibit F signed by the chief financial officer, chief
restructuring officer of the Borrower or another officer of the Borrower
acceptable to the DIP Agent to the effect that, to such officer’s knowledge and
belief, no Default or Event of Default has occurred during the period covered by
such statements or, if any such Default or Event of Default has occurred during
such period, setting forth a description of such Default or Event of Default and
specifying the action, if any, taken by the Borrower or any Subsidiary to remedy
the same.  Such certificate shall also set forth the calculations
supporting such statements in respect of Section 8.22 hereof;

           

              (l)  on
Friday of each week, commencing December 12, 2008, a projected updated
budget for the 13-week period commencing with such week in the same form as the
Budget then in effect and otherwise in form and substance reasonably
satisfactory to the DIP Agent and the Required Lenders and certified by the
chief restructuring officer of the Borrower;

           

              (m)  on
Friday of each week, commencing December 12, 2008, a report (the “Budget Report”) in such form
(i) showing the actual receipts and disbursements of the Borrower and its
Subsidiaries during the immediately preceding week, and (ii) comparing the
actual receipts and disbursements for the Borrower and its Subsidiaries to the
receipts and disbursements shown in the Budget both for the week covered by such
Budget Report and on a cumulative basis for the period from the Petition Date
through the last day of the immediately preceding week in each of the categories
set forth in the Budget, each Budget Report to be in form and substance
reasonably satisfactory to the DIP Agent and the Required Lenders and certified
by the chief restructuring officer of the Borrower;

           

              (n) 
promptly upon receiving the same, copies of all written offers which the
Borrower or any Guarantor should reasonably expect to be of interest to the
Lenders and agreements regarding the sale or recapitalization of the Borrower or
any Subsidiary;

           

              (o) 
promptly after the same is available, copies of all pleadings, motions,
applications, judicial information, financial information and other documents
filed by or on behalf of the Borrower or any of the Guarantors with the
Bankruptcy Court in the Chapter 11 Cases, or distributed by or on behalf of
the Borrower or any of the Guarantors to any official committee appointed in the
Chapter 11 Cases; and

           

          
            
              
              

            

            
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              (p)  as
soon as available, and in any event no later than the applicable Reporting Date
for each fiscal month, a copy of divisional operating reports in a form to be
mutually agreed upon by the Borrower and the DIP Agent and certified to by its
chief financial officer, chief restructuring officer or another officer of the
Borrower acceptable to the DIP Agent.

           

              Section
8.6   Inspection.  The
Borrower shall, and shall cause each Subsidiary to, permit the DIP Agent, each
Lender, the L/C Issuer, their counsel and financial advisors, and each of
their duly authorized representatives and agents to visit and inspect any of its
Property, corporate books, and financial records, to examine and make copies of
its books of accounts and other financial records, and to discuss its affairs,
finances, and accounts with, and to be advised as to the same by, its officers,
employees and independent public accountants (and by this provision the Borrower
hereby authorizes such accountants to discuss with the DIP Agent, such Lenders,
the L/C Issuer and their counsel and financial advisors, the finances and
affairs of the Borrower and its Subsidiaries, provided that the Borrower and its
advisors shall have the opportunity to be present at any such meeting) at such
times and intervals as the DIP Agent or any such Lender or L/C Issuer may
designate provided that the Borrower shall be afforded reasonable notice of and
opportunity to attend any discussions with its accountants.

           

              Section
8.7   Borrowings and
Guaranties.  The Borrower shall not, nor shall it permit any
Subsidiary to, issue, incur, assume, create or have outstanding any Indebtedness
for Borrowed Money, or be or become liable as endorser, guarantor, surety or
otherwise for any debt, obligation or undertaking of any other Person, or
otherwise agree to provide funds for payment of the obligations of another, or
supply funds thereto or invest therein or otherwise contract to assure a
creditor of another against loss, or apply for or become liable to the issuer of
a letter of credit which supports an obligation of another, or subordinate any
claim or demand it may have to the claim or demand of any other Person
(collectively, “indebtedness”); provided,
however, that the foregoing shall not restrict nor operate to
prevent:

           

              (a)  the
Post-Petition Obligations of the Borrower and its
Subsidiaries owing to the DIP Agent and the Lenders (and their
Affiliates);

           

              (b) 
purchase money indebtedness and Capitalized Lease Obligations of the Borrower
and its Subsidiaries in an amount not to exceed $45,000,000 in the aggregate at
any one time outstanding incurred to finance the replacement of tangible
personal property (other than inventory and farm products) that has become
obsolete or worn out;

           

              (c) 
endorsement of items for deposit or collection in the ordinary course of
business;

           

              (d)  the
Pre-Petition BMO Obligations;

           

              (e)  the
Pre-Petition CoBank Obligations;

           

              (f)  the
Avicola Pre-Petition Obligations;

           

          
            
              
              

            

            
              -56-

              
                

              

            

            
              
              

            

          

              

              (g) 
indebtedness evidenced by the Borrower’s 8-3/8% Senior Subordinated Notes due
2017 outstanding on the Petition Date;

           

              (h) 
indebtedness evidenced by the Borrower’s 7-5/8% Senior Notes due May 1,
2015 outstanding on the Petition Date;

           

              (i) 
indebtedness evidenced by the Borrower’s 9-1/4% Senior Subordinated Notes due
November 15, 2013, outstanding on the Petition Date;

           

              (j) 
indebtedness with respect to letters of credit (other than letters of credit
issued under the Pre-Petition BMO Loan Documents) outstanding on the Petition
Date and listed on Schedule 8.7, and any amendment, modification,
extension, renewal or replacement thereof;

           

              (k) 
indebtedness of Non-debtor Subsidiaries to the Borrower arising from
intercompany advances permitted by Sections 8.9(d), (f) and
(g);

           

              (l) 
indebtedness in respect of Intercompany Bonds outstanding on the Petition
Date;

           

              (m) 
indebtedness under the Fairway Receivables Securitization Program, provided such
indebtedness shall be paid in full (except for any contingent indemnification
claims, costs, fees, and expenses (including, without limitation, costs, fees
and expenses of counsel) that survive the termination of the Fairway Receivables
Securitization Program) out of the proceeds of the initial Borrowing made under
this Agreement;

           

              (n) 
secured indebtedness outstanding on the Petition Date and unsecured Indebtedness
for Borrowed Money in a principal amount of $1,000,000 or more outstanding on
the Petition Date and in each case listed on Schedule 8.7 to this
Agreement;

           

              (o) 
other unsecured indebtedness outstanding on the Petition Date;

           

              (p) 
indebtedness in respect of hedging agreements permitted pursuant to
Section 8.25;

           

              (q) 
indebtedness in respect of sale/leaseback transactions permitted pursuant to
Section 8.10;

           

              (r) 
indebtedness which may be deemed to exist in connection with customary
agreements providing for indemnification, purchase price adjustments, earnouts
and similar obligations in connection with dispositions permitted pursuant to
Section 8.10;

           

              (s) 
indebtedness (i) among the Debtors and (ii) of the Borrower or any
Guarantor to any Non-debtor Subsidiary subject to compliance with
Section 8.9(d);

           

          
            
              
              

            

            
              -57-

              
                

              

            

            
              
              

            

          

              

              (t) 
indebtedness consisting of the financing of insurance premiums, so long as the
aggregate amount payable pursuant to such indebtedness does not materially
exceed the amount of the premium for such insurance;

           

              (u) 
indebtedness arising from the honoring by a bank or other financial institution
of a check, draft or similar instrument drawn against insufficient funds in the
ordinary course of business, provided, that such Indebtedness is extinguished
within five Business Days of its incurrence;

           

              (v) 
cash management obligations and indebtedness in respect of netting services,
overdraft protection and similar arrangements in connection with cash management
and deposit accounts;

           

              (w) 
Indebtedness for Borrowed Money of the type set forth in subsection (c) of
the definition of Indebtedness for Borrowed Money solely to the extent such Lien
is permitted by Section 8.8 and the indebtedness secured by such Lien is
not any other type of indebtedness;

           

              (x) 
indebtedness representing deferred compensation to directors, officers, members,
of management, employees or consultant of the Borrower and its Subsidiaries in
the ordinary case of business;

           

              (y) 
contingent obligations in respect of indemnities or similar agreements to hold
others harmless arising in the ordinary course of business;

           

              (z) 
contingent obligations arising under operating leases and similar contracts in
the ordinary course of business that do not constitute Indebtedness for Borrowed
Money; and

           

              (aa) 
indebtedness consisting of take or pay obligations contained in supply
agreements incurred in the ordinary course of business and consistent with past
practices.

           

              Section
8.8   Liens.  The
Borrower shall not, nor shall it permit any Subsidiary to, create, incur or
permit to exist any Lien of any kind on any Property owned by any such Person;
provided, however, that the foregoing shall not apply to nor operate to
prevent:

           

              (a) 
Liens arising by statute in connection with worker’s compensation, unemployment
insurance, old age benefits, social security obligations, taxes, assessments,
statutory obligations or other similar charges (other than Liens arising under
ERISA), good faith cash deposits in connection with tenders, contracts or leases
to which the Borrower or any Subsidiary is a party or other bonds or cash
deposits required to be made in the ordinary course of business, provided in
each case that (i) the obligation is not for borrowed money and the
obligation secured is not overdue or, if overdue, is being contested in good
faith by appropriate proceedings which prevent enforcement of the matter under
contest and adequate reserves have been established therefor or (ii) in the
case of the Debtors, such taxes, assessments, statutory obligations or other
similar charges 

           

          related
to periods prior to the Petition Date so long as enforcement of such Liens is
stayed;

           

          
            
              
              

            

            
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              (b) 
mechanics’, workmen’s, materialmen’s, landlords’, carriers’ or other similar
Liens arising in the ordinary course of business with respect to obligations
which are not overdue or which are being contested in good faith by appropriate
proceedings which prevent enforcement of the matter under contest;

           

              (c)  (i)
judgment liens and judicial attachment liens not constituting an Event of
Default under Section 9.1(h) hereof and (ii) the pledge of assets for the
purpose of securing an appeal, stay or discharge in the course of any legal
proceeding, provided that the aggregate amount of such judgment liens,
attachments and liabilities of the Borrower and its Subsidiaries secured by a
pledge of assets permitted under this subsection, including interest and
penalties thereon, if any, shall not be in excess of $10,000,000 at any one time
outstanding;

           

              (d) 
Liens on tangible personal property (other than inventory and farm products) of
the Borrower or any Subsidiary created solely for the purpose of securing
indebtedness permitted by Section 8.7(b) hereof, representing or incurred
to finance the purchase price of such Property, provided that no such Lien shall
extend to or cover other Property of the Borrower or such Subsidiary other than
the respective Property so acquired and the proceeds and products thereof and
accessions thereto, and the principal amount of indebtedness secured by any such
Lien shall at no time exceed the purchase price of such Property (and related
costs and expenses), as reduced by repayments of principal thereon and payments
of such related costs and expenses;

           

              (e)  any
interest or title of a lessor under any operating lease;

           

              (f) 
easements, rights-of-way, restrictions, minor defects, irregularities, and other
similar encumbrances against real property incurred in the ordinary course of
business which do not materially detract from the value of the Property subject
thereto or materially interfere with the ordinary conduct of the business of the
Borrower or any Subsidiary;

           

              (g) 
Liens in the Pre-Petition BMO Collateral in favor of the Pre-Petition BMO Agent
for the benefit of the Pre-Petition BMO Lenders to secure the Pre-Petition BMO
Obligations, provided that such Liens are subject and subordinated to the Liens
in the Collateral granted in favor of the DIP Agent for the benefit of the DIP
Agent and the Lenders pursuant to this Agreement and the Financing
Orders;

           

              (h) 
Liens in the Pre-Petition CoBank Collateral in favor of the Pre-Petition CoBank
Agent for the benefit of the Pre-Petition CoBank Lenders to secure the
Pre-Petition CoBank Obligations, provided that such Liens are subject and
subordinated to the Liens in the Collateral granted in favor of the DIP Agent
for the benefit of the DIP Agent and the Lenders pursuant to this Agreement and
the Financing Orders;

           

          
            
              
              

            

            
              -59-

              
                

              

            

            
              
              

            

          

              

              (i) 
Liens in the Collateral granted in favor of the DIP Agent for the benefit of the
DIP Agent and the Lenders pursuant to the Loan Documents and the Financing
Orders;

           

              (j) 
Replacement Liens in the Collateral in favor of the Pre-Petition BMO Agent for
the benefit of the Pre-Petition BMO Lenders to secure the Borrower’s Adequate
Protection Obligations relating to the Pre-Petition BMO Collateral, provided
that such Liens are subject and subordinated to (i) the Liens in the
Collateral granted in favor of the DIP Agent for the benefit of the DIP Agent
and the Lenders pursuant to this Agreement and the Financing Orders,
(ii) the Administrative Expense Carve-Out, and (iii) the Replacement
Liens in the Pre-Petition CoBank Primary Collateral in favor of the Pre-Petition
CoBank Agent for the benefit of the Pre-Petition CoBank Lenders; and provided
further that such Replacement Lien in Property that was unencumbered prior to
the Petition Date (other than inventory, accounts receivable, rights against
growers, and the products and proceeds of the foregoing, in which the
Replacement Lien granted to the Pre-Petition BMO Agent shall be senior and prior
to the Replacement Lien therein granted to the Pre-Petition CoBank Agent) shall
rank pari passu with the Replacement Lien in such Property granted to the
Pre-Petition CoBank Agent and the Pre-Petition CoBank Lenders;

           

              (k) 
Replacement Liens in the Collateral in favor of the Pre-Petition CoBank Agent
for the benefit of the Pre-Petition CoBank Lenders to secure the Borrower’s
Adequate Protection Obligations relating to the Pre-Petition CoBank Collateral,
provided that such Liens are subject and subordinated to (i) the Liens in
the Collateral granted in favor of the DIP Agent for the benefit of the DIP
Agent and the Lenders pursuant to this Agreement and the Financing Orders,
(ii) the Administrative Expense Carve-Out, and (iii) the Replacement
Liens in the Pre-Petition BMO Primary Collateral in favor of the Pre-Petition
BMO Agent for the benefit of the Pre-Petition BMO Lenders; and provided further
that such Replacement Lien in Property that was unencumbered prior to the
Petition Date (other than inventory, accounts receivable, rights against
growers, and the products and proceeds of the foregoing, in which the
Replacement Lien granted to the Pre-Petition BMO Agent shall be senior and prior
to the Replacement Lien therein granted to the Pre-Petition CoBank Agent) shall
rank pari passu with the Replacement Lien in such Property granted to the
Pre-Petition BMO Agent and the Pre-Petition BMO Lenders;

           

              (l) 
Liens in the Avicola Pre-Petition Collateral granted to the Avicola Pre-Petition
Agent to secure the Avicola Pre-Petition Obligations;

           

              (m) 
deposits existing on the Petition Date in respect of letters of credit issued
and outstanding on the Petition Date and permitted by Section 8.7 hereof to
secure either the relevant Debtor’s obligations to the issuer of such letters of
credit or the obligations supported by such letters of credit (and any
amendment, modification, extension, renewal or replacement
thereof);

           

          
            
              
              

            

            
              -60-

              
                

              

            

            
              
              

            

          

             

              (n) 
deposits securing utilities and trade creditors in the ordinary course of
business;

           

              (o) 
Liens in feed ingredients granted to the sellers of such feed ingredients to
secure the unpaid purchase price thereof;

           

              (p) 
Liens on the equity interests of any farm credit institution required to be
purchased from time to time by Borrower in favor of the issuer
thereof;

           

              (q) 
Liens existing as of the Petition Date and set forth as
Schedule 8.8;

           

              (r)  (i)
leases, subleases, licenses and sublicenses granted to other Persons not
interfering in any material respect with the ordinary course of the business of
the Borrower or its Subsidiaries and (ii) the rights reserved or vested in any
Person by the terms of any lease, license, franchise, grant or permit held by
the Borrower or any of its Subsidiaries or by a statutory provision, to
terminate any such lease, license, franchise, grant or permit, or to require
annual or periodic payments as a condition to the continuance
thereof;

           

              (s) 
Liens arising out of consignment or similar arrangements for the sale of goods
entered into by the Borrower or any of its Subsidiaries in the ordinary course
of business;

           

              (t) 
bankers’ Liens, rights of setoff and other similar Liens on cash and investments
permitted by Section 8.9 on deposit in one or more accounts maintained by
the Borrower or any Subsidiary, in each case granted in the ordinary course of
business in favor of the bank or banks with which such accounts are maintained,
securing amounts owing to such bank with respect to cash management and
operating account arrangements, including those involving pooled accounts and
netting arrangements in respect of such deposit accounts, and not securing any
obligations relating to any extension of credit;

           

              (u)  the
filing of UCC financing statements solely as a precautionary measure in
connection with operating leases or consignment of goods;

           

              (v) 
Liens arising pursuant to sale and leaseback transactions permitted pursuant to
Section 8.10 to so long as such Liens do not attach to any assets of the
Borrower or any of its Subsidiaries other than those which are the subject of
such and sale leaseback transactions;

           

              (w) 
Liens (i) consisting of an agreement to dispose of any Property in a
disposition permitted under Section 8.10 and (ii) earnest money
deposits of cash or cash equivalents by Borrower or any of its Subsidiaries in
connection with any letter of intent or purchase agreement permitted
hereunder;

           

          
            
              
              

            

            
              -61-

              
                

              

            

            
              
              

            

          

              

              (x) 
Liens in respect of hedge obligations permitted pursuant to Section 8.25
hereof, provided that
the Required Lenders shall have given their prior written consent thereto on a
case by case basis; and

           

              (y) 
Liens encumbering reasonable customary initial deposits and margin deposits
attaching to commodity trading accounts or other brokerage accounts incurred in
the ordinary course of business and not for speculative purposes, provided that the Required
Lenders shall have given their prior written consent thereto on a case by case
basis.

           

          The
Debtors and the Lenders agree that no Lien permitted by this Section 8.8 shall
have a priority superior to or pari passu with the priority
of the Liens granted to the DIP Agent in the Collateral with respect to the
Post-Petition Obligations until the indefeasible payment in full in cash and
satisfaction of the Post-Petition Obligations in the manner set forth in this
Agreement, other than (i) the Administrative Expense Carve-Out pursuant to the
Final Financing Order, (ii) Liens created after the Petition Date that are
permitted under Sections 8.8(d), (m), (n), (o) and (t) of this Agreement,
(iii) Liens in favor of a creditor having a perfected enforceable non-avoidable
Lien, as of the Petition Date, with priority over the Liens of the Pre-Petition
BMO Agent, the Pre-Petition BMO Lenders, the Pre-Petition CoBank Agent and the
Pre-Petition CoBank Lenders, including cash collateral securing letters of
credit outstanding as of the Petition Date, and (iv) Liens existing before or
after the Petition Date permitted by Section 8.8(a), (b), (c), (f) and (r)(ii)
of this Agreement to the extent they are entitled to priority over the DIP
Agent’s Liens in the Collateral under mandatory provisions of non-bankruptcy law
and are valid perfected non-avoidable enforceable Liens with  priority
over the DIP Agent’s Liens in the Collateral (the “Permitted Senior Liens”).
Notwithstanding any contrary provision in this Agreement, to the extent any
Person holds Permitted Senior Liens, then:  (i) the Liens and
Replacement Liens granted to the DIP Agent, the Lenders, Pre-Petition BMO Agent,
Pre-Petition BMO Lenders, Pre-Petition CoBank Agent and Pre-Petition CoBank
Lenders shall not prime or be senior to Permitted Senior Liens, and (ii) in
the event any property subject to the Permitted Senior Liens is sold (or suffers
casualty), any surplus proceeds (or insurance proceeds) remaining after the
satisfaction of the amount due such Person shall be governed by the Final
Financing Order.

           

          Section 8.9Investments, Acquisitions, Loans and
Advances.  The Borrower shall not, nor shall it permit any
Subsidiary to, directly or indirectly, make, retain or have outstanding any
investments (whether through purchase of stock or obligations or otherwise) in,
or loans or advances to (other than for travel advances and other similar cash
advances made to employees in the ordinary course of business), any other
Person, or acquire all or any substantial part of the assets or business of any
other Person or division thereof; provided, however, that the foregoing shall
not apply to nor operate to prevent:

           

              (a) 
investments in direct obligations of the United States of America or of any
agency or instrumentality thereof whose obligations constitute full faith and
credit obligations of the United States of America, provided that any such
obligations shall mature within one year of the date of issuance
thereof;

           

          
            
              
              

            

            
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              (b) 
investments in money market funds that invest solely, and which are restricted
by their respective charters to invest solely, in investments of the type
described in subsection (a) above;

           

              (c)  the
Borrower’s investments existing on the Petition Date and listed on
Schedule 8.9(c);

           

              (d) 
intercompany advances made from time to time by the Borrower to Non-debtor
Subsidiaries other than the Insurance Subsidiaries, including Avicola and its
Subsidiaries, and to Merit Provisions for operating expenses and not for the
repayment of Indebtedness for Borrowed Money and consistent with past practices
as it relates to Avicola and its Subsidiaries purchasing feed ingredients from
the Borrower, in an amount such that the aggregate of all such amounts
receivable by the Borrower from such Non-debtor Subsidiaries and Merit
Provisions, net of the aggregate of all such amounts payable by the Borrower to
such Non-debtor Subsidiaries and Merit Provisions, shall not exceed such net
amount calculated as of the Petition Date by more than $30,000,000 in the
aggregate at any time, with disclosure to the Lenders of the nature and extent
of such funding, provided that (i) neither the
Borrower nor any of the other Debtors may guaranty any portion of such funding
(other than in the case of Merit Provisions pursuant to guaranty arrangements
existing on the Petition Date), (ii) such funding shall be made pursuant to the
Budget or another budget to be agreed upon by the Required Lenders, (iii) such
Subsidiaries shall not accumulate cash or inventory above the levels necessary
in the ordinary course of business, (iv) such advances shall be evidenced by a
revolving promissory note of such Subsidiary or Merit Provisions payable to the
order of the Borrower, which promissory note shall be part of the Collateral and
shall be delivered to the DIP Agent endorsed in blank or otherwise in a manner
acceptable to the DIP Agent, and (v) such Non-debtor Subsidiary shall agree to
repay such revolving promissory note with any available cash not needed to fund
its operations in the ordinary course of business;

           

              (e) 
intercompany investments made from time to time by the Borrower to a Guarantor
or by a Guarantor to the Borrower or another Guarantor in the ordinary course of
business for operating expenses and not for the repayment of Indebtedness for
Borrowed Money;

           

              (f) 
payment of interest to Gold Kist Insurance in an aggregate amount not to exceed
$2,400,000 prior to December 1, 2009 and, if the Maturity Date is extended
beyond December 1, 2009, $200,000 per each month thereafter up to the extended
Maturity Date, and other amounts payable to Gold Kist Insurance to enable it to
pay claims made by the Borrower in excess of the amount of all other funds
available to Gold Kist Insurance for such purpose and consistent with the Budget
or otherwise approved by the Required Lenders and the DIP Agent, provided that Gold Kist
Insurance continues to pay claims made by the Borrower in a manner consistent
with past practices;

           

              (g) 
payment of insurance premiums to Mayflower in an aggregate amount not to exceed
$27,000,000 and, if the Maturity Date is extended beyond December 1, 2009,

           

          
            
              
              

            

            
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          $2,250,000
per each month thereafter up to the extended Maturity Date, or such other amount
as may be approved by the Required Lenders and the DIP Agent, provided that Mayflower
continues to pay claims made by the Borrower in a manner consistent with past
practices;

           

              (h) 
investments consisting of hedging arrangements permitted pursuant to
Section 8.25;

           

              (l) 
capital plan and investments in equity interests of any farm credit institution
required in accordance with the by-laws or capital plan of such farm credit
institution and existing on the Petition Date;

           

              (m) 
investments, if any, arising from the sale of receivables pursuant to the
Fairway Receivables Securitization Program; provided such investments
shall be terminated and such receivables repurchased using the proceeds of the
initial Borrowing under this Agreement;

           

              (n) 
advances to officers, employees and contract growers of the Borrower and its
Subsidiaries in the ordinary course of business and consistent with past
practices;

           

              (o) 
advances to the Borrower or any Guarantor by any Non-debtor
Subsidiary;

           

              (p) 
investments permitted pursuant to Section 8.10;

           

              (q) 
investments by the Insurance Subsidiaries that are permitted by their investment
policies attached hereto as Schedule 8.9(q);

           

               (r)  with respect to Avicola and
its Subsidiaries, investments that are the Mexican equivalents of the
investments described in subsections (a) and (b) above; and

           

              (s)  any
investments received (i) in compromise of (A) obligations of any Person that
were incurred in the ordinary course of business, including pursuant to any plan
of reorganization or similar arrangement upon the bankruptcy or insolvency of
any such Person or (B) litigation, arbitration or other disputes; or (ii) as a
result of a foreclosure by the Borrower or any of its Subsidiaries with respect
to any secured investment or other transfer of title with respect to any secured
investment in default.

           

          In
determining the amount of investments, acquisitions, loans, and advances
permitted under this Section, investments and acquisitions shall always be taken
at the original cost thereof (regardless of any subsequent appreciation or
depreciation therein), and loans and advances shall be taken at the principal
amount thereof then remaining unpaid.

           

              Section
8.10   Mergers, Consolidations and
Sales.  The Borrower shall not, nor shall it permit any
Subsidiary to, be a party to any merger or consolidation, or sell, transfer,
lease or otherwise dispose of all or any part of its Property, including any
disposition of Property as part of a sale and leaseback transaction, or in any
event sell or discount (with or without recourse) any 

           

          
            
              
              

            

            
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              of its notes
or accounts receivable; provided, however, that this
Section shall not apply to nor operate to prevent:

           

              (a)  the
sale or lease of inventory in the ordinary course of business;

           

              (b)  the
sale, transfer, lease or other disposition of Property of the Borrower and the
Guarantors to one another in the ordinary course of its business;

           

              (c)  the
sale, transfer or other disposition of any tangible personal property that, in
the reasonable business judgment of the Borrower or any of its Subsidiaries, has
become obsolete or worn out, and which is disposed of in the ordinary course of
business;

           

              (d)  the
sale, transfer, lease or other disposition of Property of the Borrower or any
Subsidiary (including any disposition of Property as part of a sale and
leaseback transaction) aggregating for the Borrower and its Subsidiaries not
more than $1,000,000 during the term of this Agreement;

           

              (e)  the
sale, transfer, lease or other disposition of Property of the Non-debtor
Subsidiaries to any other Non-debtor Subsidiary;

           

              (f)  any
merger, consolidation, or sale, transfer, lease or other disposition of Property
of Avicola and its Subsidiaries permitted under the Avicola Pre-Petition Credit
Agreement as in effect on the Petition Date, but only for so long as the Avicola
Pre-Petition Credit Agreement is in effect and any
Avicola  Pre-petition Obligations remain outstanding;

           

              (g)  the
merger or consolidation of any Non-debtor Subsidiary with any other Non-debtor
Subsidiary; and

           

              (h)  the
sale of machinery and equipment by the Debtors to Non-debtor Subsidiaries for
fair value and on terms no less favorable to the relevant Debtor than such
Debtor could have obtained from an unaffiliated third party in an arm’s length
transaction.

           

              Section
8.11   Maintenance of
Subsidiaries.  The Borrower shall not assign, sell or transfer,
nor shall it permit any Subsidiary to issue, assign, sell or transfer, any
shares of capital stock or other equity interests of a Subsidiary; provided, however, that the
foregoing shall not operate to prevent (a) Liens on the capital stock or
other equity interests of Subsidiaries granted to the DIP Agent pursuant to this
Agreement, the Financing Orders and the Collateral Documents, (b) the
issuance, sale, and transfer to any Person of any shares of capital stock of a
Subsidiary solely for the purpose of qualifying, and to the extent legally
necessary to qualify, such Person as a director of such Subsidiary,
(c) dispositions permitted pursuant to Section 8.10, or (d) Liens
granted on the equity interests of Avicola and its Subsidiaries and on the
Property of Avicola and it is Subsidiaries to secure the Avicola Pre-Petition
Obligations.

           

          
            
              
              

            

            
              -65-

              
                

              

            

            
              
              

            

          

             

               Section
8.12   Dividends and Certain Other
Restricted Payments.  The Borrower shall not, nor shall it
permit any Subsidiary to, (a) declare or pay any dividends on or make any
other distributions in respect of any class or series of its capital stock or
other equity interests (other than dividends or distributions payable solely in
its capital stock or other equity interests), or (b) directly or indirectly
purchase, redeem, or otherwise acquire or retire any of its capital stock or
other equity interests or any warrants, options, or similar instruments to
acquire the same (collectively referred to herein as “Restricted Payments”); provided, however, that the
foregoing shall not operate to prevent the making of dividends or distributions
by any Subsidiary to (i) the Borrower, (ii) any Subsidiary, and
(iii) any other shareholder ratably in accordance with their pro-rata
share; and provided
further, that the foregoing shall not operate to prevent the making of
dividends or distributions by Avicola and its Subsidiaries that are otherwise
permitted under the Avicola Pre-Petition Credit Agreement as in effect on the
Petition Date for so long as the Avicola Pre-Petition Credit Agreement is in
effect and any Avicola Pre-petition Obligations are outstanding.

           

              Section
8.13   ERISA.  The
Borrower shall, and shall cause each Subsidiary to, promptly pay and discharge
all obligations and liabilities arising under ERISA of a character which if
unpaid or unperformed could reasonably be expected to result in the imposition
of a Lien against any of its Property.  The Borrower shall, and shall
cause each Subsidiary to, promptly notify the DIP Agent and each Lender
of:  (a) the occurrence of any reportable event (as defined in
ERISA) with respect to a Plan, (b) receipt of any written notice from the
PBGC of its intention to seek termination of any Plan or appointment of a
trustee therefor, (c) its intention to terminate or withdraw from any Plan,
and (d) the occurrence of any event with respect to any Plan which would
result in the incurrence by the Borrower or any Subsidiary of any material
liability, fine or penalty, or any material increase in the contingent liability
of the Borrower or any Subsidiary with respect to any post-retirement Welfare
Plan benefit.

           

              Section
8.14   Compliance with
Laws.  (a) The Borrower shall, and shall cause each
Subsidiary to, comply in all respects with the requirements of all federal,
state, and local laws, rules, regulations, ordinances and orders applicable to
or pertaining to its Property or business operations, where any such
non-compliance, individually or in the aggregate, could reasonably be expected
to have a Material Adverse Effect or result in a Lien upon any of its Property,
other than Permitted Liens and Liens arising in connection with matters being
diligently contested in good faith by appropriate proceedings that prevent the
enforcement thereof or which are otherwise stayed and for which adequate
reserves have been established in accordance with GAAP.

           

              (b) 
Without limiting the agreements set forth in Section 8.14(a) above, the
Borrower shall, and shall cause each Subsidiary to, at all times, do the
following to the extent the failure to do so, individually or in the aggregate,
could reasonably be expected to have a Material Adverse
Effect:  (i) comply in all material respects with, and maintain
each of the Premises in compliance in all material respects with, all applicable
Environmental Laws; (ii) require that each tenant and subtenant, if any, of
any of the Premises or any part thereof comply in all material respects with all
applicable Environmental Laws; (iii) obtain and maintain in full force and
effect all material governmental approvals required by any applicable
Environmental Law for operations at each of the Premises; (iv) cure any
material violation by it or at any of the Premises of applicable Environmental
Laws; (v) not allow the presence or operation at any of the Premises of any

           

          
            
              
              

            

            
              -66-

              
                

              

            

            
              
              

            

          

           

          (1) landfill
or dump or (2) hazardous waste management facility or solid waste disposal
facility as defined pursuant to RCRA or any comparable state law; (vi) not
manufacture, use, generate, transport, treat, store, release, dispose or handle
any Hazardous Material at any of the Premises except in the ordinary course of
its business and in de minimis amounts; (vii) within ten (10) Business Days
notify the DIP Agent in writing of and provide any reasonably requested
documents upon learning of any of the following in connection with the Borrower
or any Subsidiary or any of the Premises: (1) any material liability for
response or corrective action, natural resource damage or other harm pursuant to
CERCLA, RCRA or any comparable state law; (2) any material Environmental
Claim; (3) any material violation of an Environmental Law or material
Release, threatened Release or disposal of a Hazardous Material; (4) any
restriction on the ownership, occupancy, use or transferability arising pursuant
to any (x) Release, threatened Release or disposal of a Hazardous Material
or (y) Environmental Law; or (5) any environmental, natural resource,
health or safety condition, which could reasonably be expected to have a
Material Adverse Effect; (viii) conduct at its expense any investigation,
study, sampling, testing, abatement, cleanup, removal, remediation or other
response action necessary to remove, remediate, clean up or abate any material
Release, threatened Release or disposal of a Hazardous Material as required by
any applicable Environmental Law, (ix) abide by and observe any
restrictions on the use of the Premises imposed by any governmental authority as
set forth in a deed or other instrument affecting the Borrower’s or any
Subsidiary’s interest therein; (x) promptly provide or otherwise make
available to the DIP Agent any reasonably requested environmental record
concerning the Premises which the Borrower or any Subsidiary possesses or can
reasonably obtain; and (xi) perform, satisfy, and implement any operation
or maintenance actions required by any governmental authority or Environmental
Law, or included in any no further action letter or covenant not to sue issued
by any governmental authority under any Environmental Law.

           

              Section
8.15   Burdensome Contracts With
Affiliates.  The Borrower shall not, nor shall it permit any
Subsidiary to, enter into any contract, agreement or business arrangement with
any of its Affiliates except:

           

              (a) 
pursuant to the reasonable requirements of the Borrower’s or such Subsidiary’s
business and, in the case of any Affiliate that is not a Debtor, upon fair and
reasonable terms not materially less favorable to the Borrower or such
Subsidiary than would be obtained in a comparable arm’s-length transaction with
a Person not an Affiliate of the Borrower or such Subsidiary;

           

              (b) 
investments permitted by Section 8.9;

           

              (c) 
reasonable and customary director, officer and employee compensation (including
bonuses and severance) and other benefits (including retirement, health, stock
option and other benefit plans) and reimbursement and indemnification
arrangements in the ordinary course of business and in good faith;
and

           

              (d) 
loans and transactions between or among the Borrower and one or more of its
Subsidiaries expressly permitted by Sections 8.7 or 8.9 of this
Agreement.

           

          
            
              
              

            

            
              -67-

              
                

              

            

            
              
              

            

          

              

              Section
8.16   No
Changes in Fiscal Year.  The Borrower shall not, nor shall it
permit any Subsidiary to, change its fiscal year from its present
basis.

           

              Section
8.17   Formation of
Subsidiaries.  The Borrower shall not, nor shall it permit any
Subsidiary to, form or acquire any Subsidiary.

           

              Section
8.18   Change
in the Nature of Business.  Other than as contemplated in the
Budget, the Borrower shall not, nor shall it permit any Subsidiary to, cease
operations in any of its businesses or taking any material action for the
purpose of effecting the foregoing without the prior written consent of the
Required Lenders.

           

              Section
8.19   Use of
Proceeds.  The Borrower shall use the credit extended under
this Agreement solely for (a) Loans and Letters of Credit for payment of
normal operating expenses consistent with the Budget, subject to variances
permitted hereunder, (b) Loans to fund drawings under the Letters of
Credit, (c) Loans for the payment of professional fees of the DIP Agent,
the Pre-Petition BMO Agent and the Pre-Petition BMO Lenders related to the DIP
Credit and the Pre-Petition BMO Credits, (d) Loans for the payment of
interest, fees and expenses on the DIP Credit, (e) Loans for payment of the
Administrative Expense Carve-Out, (f) funding the purchase of outstanding
transferred receivables and related assets relating to the termination of the
Fairway Receivables Securitization Program, and payment of all amounts owing
under the Fairway Receivables Securitization Program (including, without
limitation, all fees, expenses and expenses of counsel), (g) Loans for the
payment of interest, fees, and expenses with respect to the Pre-Petition BMO
Credits as adequate protection to the Pre-Petition BMO Lenders and the
Pre-Petition BMO Agent, (h) Loans for the payment of interest, fees, and
expenses with respect to the Pre-Petition CoBank Credit Facilities as adequate
protection to the Pre-Petition CoBank Lenders and the Pre-Petition CoBank Agent,
and (i) Loans for the payment of professional fees of the Pre-Petition
CoBank Agent and the Pre-Petition CoBank Lenders related to the Pre-Petition
CoBank Credit Facilities. 

           

              Section
8.20   No
Restrictions.  Except as provided herein, the Borrower shall
not, nor shall it permit any Subsidiary to, directly or indirectly create or
otherwise cause or suffer to exist or become effective any consensual
encumbrance or restriction of any kind on the ability of the Borrower or any
Subsidiary to:  (a) pay dividends or make any other distribution
on any Subsidiary’s capital stock or other equity interests owned by the
Borrower or any other Subsidiary, (b) pay any indebtedness owed to the
Borrower or any other Subsidiary, (c) make loans or advances to the
Borrower or any other Subsidiary, (d) transfer any of its Property to the
Borrower or any other Subsidiary, or (e) to guarantee the Post-Petition
Obligations and/or grant Liens on its assets to the DIP Agent as required by the
Financing Orders and the Loan Documents.  The provisions of this
Section 8.20 will not apply to encumbrances and restrictions existing under
or by reason of:

           

              (i)  any
agreement governing any indebtedness permitted by Section 8.7(b)
restricting the voluntary transfer of the Property subject to a Lien permitted
by Section 8.8(d) that secures such indebtedness;

           

          
            
              
              

            

            
              -68-

              
                

              

            

            
              
              

            

          

            

              (ii) 
mandatory provisions of applicable law to the extent not stayed, pre-empted,
over-ridden, superseded or otherwise modified by the Bankruptcy Code, the
Financing Orders and any other orders that may be entered by the Bankruptcy
Court in the Chapter 11 Cases;

           

              (iii) 
customary provisions restricting subletting or assignment of any lease governing
a leasehold interest of the Borrower or a Subsidiary;

           

              (iv) 
customary provisions restricting assignment of any agreement entered into by the
Borrower or a Subsidiary in the ordinary course of business, but only to the
extent such restrictions are enforceable under mandatory provisions of
applicable law and to the extent not stayed, pre-empted, over-ridden, superseded
or otherwise modified by the Bankruptcy Code, the Financing Orders and any other
orders that may be entered by the Bankruptcy Court in the Chapter 11
Cases;

           

              (v)  any
holder of a Lien permitted by Sections 8.8(c)(ii), (d), (e), (l), (m), (n),
(o), (p), (r), (u), (v), (w), (x) and (y) restricting the voluntary transfer of
the Property subject thereto;

           

              (vi) 
customary restrictions and conditions contained in any agreement relating to the
sale of any Property permitted under Section 8.10 pending the consummation
of such sale or in leases, subleases, license or sub-licenses relating to the
assets covered thereby in each case restricting the voluntary transfer of the
property subject thereto;

           

              (vii) 
customary provisions in partnership agreements, limited liability company
organizational governance documents, asset sale and stock sale agreements and
other similar agreements entered into in the ordinary course of business that
restrict the transfer of ownership interests in such partnership, limited
liability company or similar Person, but only to the extent such restrictions
are enforceable under mandatory provisions of applicable law and to the extent
not stayed, pre-empted, over-ridden, superseded or otherwise modified by the
Bankruptcy Code, the Financing Orders and any other orders that may be entered
by the Bankruptcy Court in the Chapter 11 Cases;

           

              (viii) 
restrictions on cash or other deposits or net worth imposed by suppliers or
landlords under contracts entered into in the ordinary course of business to the
extent such restrictions are enforceable under mandatory provisions of
applicable law and to the extent not stayed, pre-empted, over-ridden, superseded
or otherwise modified by the Bankruptcy Code, the Financing Orders and any other
orders that may be entered by the Bankruptcy Court in the Chapter 11
Cases;

           

              (ix) 
customary provisions in joint venture agreements and similar agreements
applicable to joint ventures relating solely to such joint venture, but only to
the extent such restrictions are enforceable under mandatory provisions of
applicable law and to the extent not stayed, pre-empted, over-ridden, superseded
or otherwise modified by the Bankruptcy Code, the Financing Orders and any other
orders that may be entered by the Bankruptcy Court in the Chapter 11
Cases;

           

          
            
              
              

            

            
              -69-

              
                

              

            

            
              
              

            

          

              

              (x) 
restrictions contained in the Avicola Pre-Petition Credit Agreement of the type
described in subsections (a), (b), (c) and (d) of this Section 8.20
that apply only to Avicola and its Subsidiaries and their respective Property,
but only for so long as the Avicola Pre-Petition Credit Agreement is in effect
or any Avicola Pre-Petition Obligations remain outstanding;

           

              (xi) 
customary restrictions imposed on Pilgrim’s Pride Funding Corporation in
connection with the Receivables Purchase Agreement;

           

              (xii) 
contractual encumbrances or restrictions in effect on the Petition Date on the
Non-debtor Subsidiaries’ ability to pay dividends and other payments to the
Borrower or any of its Subsidiaries, and any amendments, modifications,
restatements, renewals, increases, supplements, refundings, replacements or
refinancings that are not more restrictive, taken as a whole, with respect to
such dividend and other payment restrictions than those contained in those
agreements in effect on the Petition Date.

           

              Section
8.21   DIP
Agent’s and Lenders’ Financial Consultant.  The DIP Agent (or
its counsel) and the Lenders (or their special counsel) shall have the right to
engage jointly on behalf of the Lenders a financial advisor, selected by the DIP
Agent and acceptable to the Required Lenders, to review, evaluate and advise the
DIP Agent and the Lenders as to the reports, analyses and cash flow forecasts
and other materials prepared by the Borrower’s financial consultants relating to
the financial condition, operating performance, and business prospects of the
Borrower and its Subsidiaries and to perform such other information gathering or
evaluation acts as may be reasonably requested by the DIP Agent or the Required
Lenders, and the reasonable costs and expenses of such financial advisor shall
be borne by the Borrower and constitute part of the Post-Petition Obligations
outstanding under this Agreement.  The Borrower shall take reasonable
steps to make available to such financial advisor and its representatives such
information respecting the financial condition, operating performance, and
business prospects of the Borrower and its Subsidiaries as may be reasonably
requested and shall make the Borrower’s financial consultants, officers,
employees, and independent public accountants available with reasonable prior
notice to discuss such information with such financial advisor and its
representatives. 

           

              Section
8.22   Financial
Covenants.   (a) Capital
Expenditures.  The Borrower shall not, nor shall it permit any
other member of the Restricted Group to, incur Capital Expenditures in an amount
in excess of $150,000,000 in the aggregate for the entire Restricted Group
during the period commencing on the Petition Date and ending on the Maturity
Date, of which no more than $107,000,000 may be funded with the proceeds of
Loans and Letters of Credit obtained under this Agreement. 

           

              (b) 
Minimum
EBITDAR.  The Borrower shall have EBITDAR for each three-fiscal
month period ending on each date set forth below in an amount not less than the
amount set forth below opposite such date:

           

          
            
              
              

            

            
              -70-

              
                

              

            

            
              
              

            

             

          

          
            	
                    Three
      fiscal Month Period Ending

                  	
                    EBITDAR
      shall not be Less than:

                  
	
                    December 27,
      2008

                  	
                    -$116,200,000

                  
	
                    January 24,
      2009

                  	
                    -$166,400,000

                  
	
                    February
      21, 2009

                  	
                    -$123,300,000

                  
	
                    March
      28, 2009

                  	
                    -$44,100,000

                  
	
                    April
      25, 2009

                  	
                    $57,200,000

                  
	
                    May
      23, 2009

                  	
                    $99,000,000

                  
	
                    June
      27, 2009

                  	
                    $124,800,0000

                  
	
                    July
      25, 2009

                  	
                    $125,000,000

                  
	
                    August
      22, 2009

                  	
                    $125,000,000

                  
	
                    September
      26, 2009

                  	
                    $125,000,000

                  
	
                    October
      24, 2009

                  	
                    $125,000,000

                  
	
                    November
      21, 2009

                  	
                    $117,500,000

                  
	
                    January
      2, 2010

                  	
                    $89,000,0000

                  

          

           

              Section
8.23   Chapter 11
Claims.  The Borrower shall not, and shall not permit any of
its Subsidiaries to, directly or indirectly create, incur, assume or suffer to
exist (in each case, to “Incur”) or permit any
unsecured claim in the Chapter 11 Cases or any superseding case or cases under
Chapter 7 of the Bankruptcy Code (including, without limitation, any
deficiency claim remaining after the satisfaction of a Lien that secures a
claim) to be pari passu with or senior to the claims of the DIP Agent, the L/C
Issuer and the Lenders against the Borrower and the Guarantors on the
Post-Petition Obligations, or apply to the Bankruptcy Court for authority so to
do, except for the Administrative Expense Carve-Out and the fees and expenses of
the Chapter 7 Trustee.

           

              Section
8.24   Executory Contracts, Pre-Petition
Debt and Payments Outside the Ordinary Course of Business.  The
Borrower shall not, and shall not permit any of its Subsidiaries to, directly or
indirectly (a) purchase any assets outside the ordinary course of business,
(b) in the case of the Debtors, assume any material executory contracts
(other than the executory contracts listed on Exhibit I) under
Section 365 of the Bankruptcy Code without the prior approval of the DIP
Agent and the Required Lenders, (c) in the case of the Debtors, pay any
pre-petition debt, other than (i) the Pre-Petition BMO Obligations and the
Pre-Petition CoBank Obligations, in 

           

          
            
              
              

            

            
              -71-

              
                

              

            

            
              
              

            

          

           

          each case
as permitted by this Agreement and the Financing Order, (ii) pre-petition
obligations owed to Normalized Trade Creditors to the extent set forth in the
Budget, and (iii) pre-petition obligations to other Essential Creditors
that are not trade creditors, to the extent set forth in the Budget,
(d) make any payments other than in respect of the Post-Petition
Obligations, the Pre-Petition BMO Obligations, the Pre-Petition CoBank
Obligations or the Administrative Expense Carve-Out as otherwise permitted
hereunder and by the Financing Order outside the ordinary course of their
respective businesses, and (e) make any guaranty fee payments to Pilgrim
Interests, or any other Person (including without limitation any holder of any
equity or other interest in Pilgrim Interests). 

           

              Section
8.25   Restriction 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
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 in connection with bona fide hedging activities in
the ordinary course of business and not for speculative purposes.

           

              Section
8.26   The
Budget.  (a) The Borrower shall not permit the total
aggregate disbursements made during any period of four consecutive weeks
(including any portion of such period occurring before the Petition Date) for
items included in the Budget other than interest on the Post-Petition
Obligations, professional fees and deposits with utilities to exceed the amounts
set forth in the Budget for such items for such period by more than 10% of such
amounts.

           

              (b)  The
Budget may be modified by the Borrower at any time with the written approval of
the DIP Agent and the Required Lenders.

           

              (c)  The
Budget shall be redetermined to the Required Lenders’ reasonable satisfaction
promptly after the consummation of any Disposition outside the ordinary course
of business that results in Net Proceeds in excess of $1,000,000.

           

              (d)  No
later than the last Business Day of every fourth week after the Closing Date
(commencing December 19, 2008), the Borrower shall provide to the Lenders a
proposed updated budget for the succeeding 13 weeks as well as all of the weeks
covered by the Budget that is then in effect, which proposed updated budget must
be in form and substance satisfactory to the DIP Agent and the Required
Lenders.  If such proposed updated budget is approved by the DIP Agent
and the Required Lenders it shall be the Budget for all purposes of this
Agreement.

           

              Section
8.27   Subsidiary Distributions,
Etc.  To the extent permitted by applicable law and regulation
and, so long as the Avicola Pre-Petition Credit Agreement is in effect or any
Avicola Pre-Petition Obligations remain outstanding, the Avicola Pre-Petition
Credit Agreement, the Debtors shall take such action from time to time as may be
required to cause Net Proceeds from the disposition of Subsidiaries or their
assets to the extent available for distribution, and amounts available for
distribution by any Joint Venture that has received proceeds of any Loan made
hereunder, to be distributed and paid over to the Borrower.

           

          
            
              
              

            

            
              -72-

              
                

              

            

            
              
              

            

          

              

              Section
8.28   Borrower’s Financial Consultants
Engagements; Sale of Certain Assets.  The Borrower shall at all
times continue to engage one or more financial consulting, brokerage firms, or
employees selected by it and reasonably acceptable to the DIP Agent and the
Required Lenders, to explore and evaluate the prompt sale of the assets agreed
in a separate letter agreement by the parties hereto, in the case of financial
consultants or brokers, under one or more written engagement letters in form and
substance reasonably acceptable to the DIP Agent and the Required
Lenders.  No later than the 60th day after the Petition Date the
Borrower shall agree to a process for the sale of assets agreed in a separate
letter agreement by the parties hereto acceptable to the Required Lenders with a
time-line and process acceptable to the Required Lenders.

           

              Section
8.29   Engagement of Chief Restructuring
Officer.  The Borrower shall engage at all times a chief
restructuring officer reasonably acceptable to the Required Lenders (it being
understood that William Snyder is acceptable).  In the event a chief
restructuring officer ceases for any reason to act in that capacity the Borrower
shall engage a successor chief restructuring officer reasonably acceptable to
the Required Lenders within 10 Business Days (or such greater number of Business
Days as shall be acceptable to the Required Lenders) of such
event.  The chief restructuring officer shall continue to be engaged
by the Borrower so long as any Post-Petition Obligations remain outstanding or
any DIP Commitments remain in effect.  The scope of the chief
restructuring officer’s engagement and the authority granted to such chief
restructuring officer (including in each case any successor chief restructuring
officer) must be reasonably satisfactory to the Required Lenders (it being
understood that the scope of engagement of and authority, in each case, of the
type provided to William Snyder is acceptable).

           

          
            	
                     
      

                  	
                    Section
      9.Events of Default and Remedies.

                  

          

           

              Section
9.1   Events
of Default.  Any one or more of the following shall constitute
an “Event of Default”
hereunder:

           

              (a) 
default in the payment when due of all or any part of the principal of any Loan
(whether at the stated maturity thereof or at any other time provided for in
this Agreement) or of any Reimbursement Obligation, or default for a period of
two (2) days in the payment when due of any interest, fee or other Obligation
payable hereunder or under any other Loan Document;

           

              (b) 
default in the observance or performance of any covenant set forth in
Sections 8.1, 8.5 (excluding subsections (l) and (m) thereof), 8.7, 8.8,
8.9, 8.10, 8.11, 8.12, 8.19, 8.22, 8.23, 8.24 or 8.26 hereof or of any
provision in any Loan Document dealing with the use, disposition or remittance
of the proceeds of Collateral or requiring the maintenance of insurance
thereon;

           

              (c) 
default in the observance or performance of any covenant set forth in
Sections 8.5(l) and (m) hereof which is not remedied within 1 Business
Day after the occurrence thereof;

           

          
            
              
              

            

            
              -73-

              
                

              

            

            
              
              

            

          

              

              (d) 
default in the observance or performance of any other provision hereof or of any
other Loan Document which is not remedied within 30 days after the earlier
of (i) the date on which such failure shall first become known to any
Designated Officer of the Borrower or (ii) written notice thereof is given
to the Borrower by the DIP Agent;

           

              (e)  any
representation or warranty made herein or in any other Loan Document or in any
certificate furnished to the DIP Agent or the Lenders pursuant hereto or thereto
proves untrue in any material respect as of the date of the issuance or making
or deemed making thereof;

           

              (f)  any
of the Loan Documents shall for any reason not be or shall cease to be in full
force and effect or is declared to be null and void, or any of the Collateral
Documents shall for any reason fail to create a valid and perfected first
priority Lien in favor of the DIP Agent in any Collateral purported to be
created thereby except as expressly permitted by the terms thereof, or any
Debtor takes any action for the purpose of terminating, repudiating or
rescinding any Loan Document executed by it or any of its obligations
thereunder;

           

              (g) 
default shall occur under any Indebtedness for Borrowed Money issued, assumed or
guaranteed (in the case of the Debtors, after the Petition Date) by the Borrower
or any Subsidiary aggregating in excess of $10,000,000, or under any indenture,
agreement or other instrument under which the same may be issued, and such
default shall continue for a period of time sufficient to permit the
acceleration of the maturity of any such Indebtedness for Borrowed Money
(whether or not such maturity is in fact accelerated) or any such Indebtedness
for Borrowed Money shall not be paid when due (whether by demand, lapse of time,
acceleration or otherwise) after giving effect to any applicable notice and
grace periods;

           

              (h)  any
judgment or judgments, writ or writs or warrant or warrants of attachment, or
any similar process or processes, shall be entered or filed against the Borrower
or any Subsidiary, or against any of its Property, in an aggregate amount in
excess of $10,000,000 (except to the extent covered by insurance pursuant to
which the insurer has not specifically disclaimed liability therefor in
writing), and which remains undischarged, unvacated, unbonded or unstayed for a
period of 30 days from the date of its entry;

           

              (i)  the
Borrower or any Subsidiary, or any member of its Controlled Group, shall fail to
pay when due an amount or amounts aggregating in excess of $10,000,000 which it
shall have become liable to pay to the PBGC or to a Plan under Title IV of
ERISA; or notice of intent to terminate a Plan or Plans having aggregate
Unfunded Vested Liabilities in excess of $10,000,000 (collectively, a “Material Plan”) shall be
filed under Title IV of ERISA by the Borrower or any Subsidiary, or any
other member of its Controlled Group, any plan administrator or any combination
of the foregoing; or the PBGC shall institute proceedings under Title IV of
ERISA to terminate or to cause a trustee to be appointed to administer any
Material Plan or a proceeding shall be instituted by a fiduciary of any Material
Plan against the Borrower or any Subsidiary, or any 

           

          
            
              
              

            

            
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          member of
its Controlled Group, to enforce Section 515 or 4219(c)(5) of ERISA and
such proceeding shall not have been dismissed or stayed within 30 days
thereafter; or a condition shall exist by reason of which the PBGC would be
entitled to obtain a decree adjudicating that any Material Plan must be
terminated;

           

              (j)  any
Change of Control shall occur;

           

              (k)  any
Material Non-debtor Subsidiary shall (i) have entered involuntarily against
it an order for relief under the Bankruptcy Code, as amended, (ii) not pay,
or admit in writing its inability to pay, its debts generally as they become
due, (iii) make an assignment for the benefit of creditors, (iv) apply
for, seek, consent to or acquiesce in, the appointment of a receiver, custodian,
trustee, examiner, liquidator or similar official for it or any substantial part
of its Property, (v) institute any proceeding seeking to have entered
against it an order for relief under the Bankruptcy Code, as amended, to
adjudicate it insolvent, or seeking dissolution, winding up, liquidation,
reorganization, arrangement, adjustment or composition of it or its debts under
any law relating to bankruptcy, insolvency or reorganization or relief of
debtors or fail to file an answer or other pleading denying the material
allegations of any such proceeding filed against it, (vi) take any
corporate (or analogous) action in furtherance of any matter described in
parts (i) through (v) above, or (vii) fail to contest in good faith
any appointment or proceeding described in Section 9.1(l) hereof;
or

           

              (l)  a
custodian, receiver, trustee, examiner, liquidator or similar official shall be
appointed for any Material Non-debtor Subsidiary, or any substantial part of any
of its Property, or a proceeding described in Section 9.1(k)(v) shall be
instituted against any Material Non-debtor Subsidiary, and such appointment
continues undischarged or such proceeding continues undismissed or unstayed for
a period of 60 days; or

           

              (m)  The
failure of the Borrower or any Guarantor to comply with any of the terms of the
Financing Order; or

           

              (n)  The
granting of a Lien on or other interest in any Property of the Borrower or any
Guarantor, or Superpriority Claim, by any court which is superior to or ranks in
parity with the Lien of the DIP Agent granted in this Agreement and the
Financing Order except for the Administrative Expense Carve-Out or as otherwise
permitted hereunder or under the Financing Order; or

           

              (o)  Any
Lien purported to be created by this Agreement, the Interim Financing Order or
the Final Financing Order in any of the Collateral shall, for any reason other
than the acts of the DIP Agent, the Lenders, the Pre-Petition BMO Agent or the
Pre-Petition BMO Lenders, cease to be a valid and perfected Lien against any of
the Collateral purported to be covered thereby pursuant to Sections 364(c)
and (d) of the Bankruptcy Code or any action is commenced by any Debtor which
contests the validity, perfection or enforceability of any pre-petition Liens of
the Pre-Petition BMO Agent under any of the Pre-Petition BMO Loan Documents or
any Lien created by this Agreement, the Interim Financing Order or the Final
Financing Order; or

           

          
            
              
              

            

            
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              (p)  The
Borrower shall fail to timely provide any adequate protection payments to the
Pre-Petition BMO Lenders as set forth in any Financing Order; or

           

              (q)  Any
material provision of any Loan Document shall, for any reason, cease to be valid
and binding on the Borrower or any of the Guarantors, or the Borrower or any of
the Guarantors shall so assert in any pleading filed in any court;
or

           

              (r)  Any
of the Chapter 11 Cases shall be dismissed or converted to a case under
Chapter 7 of the Bankruptcy Code; or

           

              (s)  A
trustee under Chapter 11 of the Bankruptcy Code shall be appointed in any
of the Chapter 11 Cases; or

           

              (t)  An
order of the Bankruptcy Court shall be entered in any of the Chapter 11
Cases appointing an examiner or other person with enlarged powers relating to
the operation of the business (powers beyond those set forth in
Section 1106(a)(3) and (4) of the Bankruptcy Code) under
Section 1106(b) of the Bankruptcy Code; or

           

              (u)  The
Financing Order shall be amended, reversed, stayed, vacated or modified, in the
case of an amendment or modification in a manner which materially and adversely
affects the rights of the Lenders or the DIP Agent and which amendment or
modification is not acceptable to the Required Lenders; or

           

              (v)  An
application shall be filed by any Debtor for the approval of any other
Superpriority Claim in any of the Chapter 11 Cases which is pari passu with or
senior to the claims of the DIP Agent and the Lenders with respect to the
Post-Petition Obligations (except for the Administrative Expense Carve-Out) or
there shall arise any such pari passu or Superpriority Claim; or

           

              (w)  The
Bankruptcy Court shall enter an order or orders granting relief from the
automatic stay under Section 362 of the Bankruptcy Code to a third party
with respect to any assets of the Borrower or any Guarantor having an aggregate
net book value (determined in accordance with GAAP) in excess of $20,000,000 in
the aggregate; or

           

              (x)  The
Bankruptcy Court shall not enter an order making a Lien Finding acceptable to
the DIP Agent within 150 days (or such later date as may be agreed to by the DIP
Agent) following the date of the appointment of a creditors’ committee;
or

           

              (y)  Any
material adverse change shall occur in the condition or prospects, financial or
otherwise, of the Borrower and its Subsidiaries, taken as a whole, after the
Petition Date; or

           

              (z)  The
Final Financing Order shall not be entered within 45 days after the Petition
Date or such later date as to which the Required Lenders may agree;
or

           

          
            
              
              

            

            
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              (aa)  If
any of the Debtors seeks an order in the Debtors’ Chapter 11 Cases or supports
any applications therefore which authorize (without (a) all Post-Petition
Obligations outstanding to the Lenders under the DIP Credit and the Adequate
Protection Obligations fully being indefeasibly satisfied in full in cash or (b)
the DIP Agent, the Pre-Petition BMO Agent and the Pre-Petition CoBank Agent
providing their prior written consent): (i) under Bankruptcy Code § 363, the use
of cash collateral in which the DIP Agent, the Pre-Petition BMO Agent or the
Prep-Petition CoBank Agent have an interest, or the sale, use, or lease, other
than in the ordinary course of business, of other Property of the Debtors in
which the DIP Agent, the Pre-Petition BMO Agent or the Pre-Petition CoBank Agent
have an interest; (ii) the obtaining of credit or the incurring of indebtedness
pursuant to Bankruptcy Code §§ 364(c) or (d), or any other grant of rights
against the Debtors and/or their estates, secured by a lien, mortgage or
security interest in the Collateral held by the DIP Agent, the Pre-Petition BMO
Agent or the Pre-Petition CoBank Agent or entitled to priority administrative
status which is junior, equal or superior to that granted to the DIP Agent, the
Lenders, the Pre-Petition BMO Agent, the Pre-Petition BMO Lenders, the
Pre-Petition CoBank Agent  or the Pre-Petition CoBank Lenders (with
respect to the Replacement Liens) herein; (iii) to the extent permitted by law,
the return of goods by the Debtors pursuant to Bankruptcy Code § 546(c); or (iv)
an order dismissing the Chapter 11 Cases.

           

              Section
9.2   Consequences of Event of
Default.  Upon the occurrence of the Maturity Date and upon the
occurrence and during the continuation of any Event of Default beyond the
applicable cure period (if any) and after five Business Days’ prior written
(including e-mail, facsimile, U.S. mail and personal delivery) notice by the DIP
Agent to the Borrower, any official committee and the U.S. Trustee of such Event
of Default (other than with respect to the actions described in subsections (a)
and (c) below, as to which such notice is not required), the DIP Agent, upon
request of the Required Lenders shall take any or all of the following actions,
in each case without further order of or application to the Bankruptcy
Court:

           

              (a) 
declare the principal of and accrued interest on the outstanding Post-Petition
Obligations to be immediately due and payable;

           

              (b)  set
off any amounts in any account (including any accounts maintained by any Debtor
with the DIP Agent);

           

              (c) 
terminate the DIP Commitments and any other obligations of the Lenders to extend
any further credit hereunder;

           

              (d) 
demand that any Cash Collateral be applied to reduce or collateralize the
Post-Petition Obligations as set forth in the second paragraph of
Section 3.1 hereof; and

           

              (e) 
demand payment of interest on the Post-Petition Obligations at the Default Rate,
in which event interest at such Default Rate shall accrue and be payable as
therein set forth without further order of or application to the Bankruptcy
Court.

           

          
            
              
              

            

            
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          The
automatic stay shall be deemed lifted as to the Collateral and the DIP Agent,
upon request of the Required Lenders shall, (without regard to whatever other
action the DIP Agent or the Lenders may be taking), foreclose and realize upon
and exercise any other rights or remedies permitted by the applicable documents,
at law or otherwise, with respect to the Collateral.

           

              Section
9.3   Relief
from Stay.  Nothing contained in this Agreement shall impair or
otherwise affect the Lenders’ right to seek relief from the automatic stay as to
their Collateral for cause at any time, which right the Lenders hereby fully
reserve.

           

          
            	
                     
      

                  	
                    Section
      10.Guarantee.

                  

          

           

              Section
10.1   Guarantee.  (a) Each
of the Guarantors hereby, jointly and severally, unconditionally and
irrevocably, guarantees to the DIP Agent, for the ratable benefit of the Lenders
and their respective successors, indorsees, transferees and assigns, the prompt
and complete payment and performance by the Borrower when due (whether at the
stated maturity, by acceleration or otherwise) of the Post-Petition
Obligations.

           

              (b) 
Anything herein or in any other Loan Document to the contrary notwithstanding,
the maximum liability of each Guarantor hereunder and under the other Loan
Documents shall in no event exceed the amount which can be guaranteed by such
Guarantor under applicable federal and state laws relating to the insolvency of
debtors (after giving effect to the right of contribution established in
Section 10.2).

           

              (c) 
Each Guarantor agrees that the Post-Petition Obligations may at any time and
from time to time exceed the amount of the liability of such Guarantor hereunder
without impairing the guarantee contained in this Section 10 or affecting
the rights and remedies of the DIP Agent or any Lender hereunder.

           

              (d)  The
guarantee contained in this Section 10 shall remain in full force and
effect until all the Post-Petition Obligations and the obligations of each
Guarantor under the guarantee contained in this Section 10 shall have been
satisfied by payment in full, no Letter of Credit shall be outstanding (other
than Letters of Credit that have been cash collateralized at 105%) and the DIP
Commitments shall be terminated, notwithstanding that from time to time during
the term of this Agreement the Borrower may be free from any Post-Petition
Obligations.

           

              (e)  No
payment made by the Borrower, any of the Guarantors, any other guarantor or any
other Person or received or collected by the DIP Agent or any Lender from the
Borrower, any of the Guarantors, any other guarantor or any other Person by
virtue of any action or proceeding or any set-off or appropriation or
application at any time or from time to time in reduction of or in payment of
the Post-Petition Obligations shall be deemed to modify, reduce, release or
otherwise affect the liability of any Guarantor hereunder which shall,
notwithstanding any such payment (other than any payment made by such Guarantor
in respect of the Post-Petition Obligations or any payment received or collected
from such Guarantor in respect of the Post-Petition Obligations), remain liable
for the Post-Petition Obligations up to the maximum liability of such Guarantor
hereunder until the Post-Petition Obligations are paid in full, no Letter of
Credit shall be outstanding and the DIP Commitments are terminated.

           

          
            
              
              

            

            
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              Section
10.2   Right
of Contribution.  Each Guarantor hereby agrees that to the
extent that a Guarantor shall have paid more than its proportionate share of any
payment made hereunder, such Guarantor shall be entitled to seek and receive
contribution from and against any other Guarantor hereunder which has not paid
its proportionate share of such payment.  Each Guarantor’s right of
contribution shall be subject to the terms and conditions of
Section 10.3.  The provisions of this Section 10.2 shall in
no respect limit the obligations and liabilities of any Guarantor to the DIP
Agent and the Lenders, and each Guarantor shall remain liable to the DIP Agent
and the Lenders for the full amount guaranteed by such Guarantor
hereunder.

           

              Section
10.3   No
Subrogation.  Notwithstanding any payment made by any Guarantor
hereunder or any set-off or application of funds of any Guarantor by the DIP
Agent or any Lender, no Guarantor shall be entitled to be subrogated to any of
the rights of the DIP Agent or any Lender against the Borrower or any other
Guarantor or any collateral security or guarantee or right of offset held by the
DIP Agent or any Lender for the payment of the Post-Petition Obligations, nor
shall any Guarantor seek or be entitled to seek any contribution or
reimbursement from the Borrower or any other Guarantor in respect of payments
made by such Guarantor hereunder, until all amounts owing to the DIP Agent and
the Lenders by the Borrower on account of the Post-Petition Obligations are paid
in full, no Letter of Credit shall be outstanding and the DIP Commitments are
terminated.  If any amount shall be paid to any Guarantor on account
of such subrogation rights at any time when all of the Post-Petition Obligations
shall not have been paid in full, such amount shall be held by such Guarantor in
trust for the DIP Agent and the Lenders, segregated from other funds of such
Guarantor, and shall, forthwith upon receipt by such Guarantor, be turned over
to the DIP Agent in the exact form received by such Guarantor (duly indorsed by
such Guarantor to the DIP Agent, if required), to be applied against the
Post-Petition Obligations, whether matured or unmatured, in such order as this
Agreement shall prescribe.

           

              Section
10.4   Amendments, Etc. with Respect to the
Post-Petition Obligations.  Each Guarantor shall remain
obligated hereunder notwithstanding that, without any reservation of rights
against any Guarantor and without notice to or further assent by any Guarantor,
any demand for payment of any of the Post-Petition Obligations made by the DIP
Agent or any Lender may be rescinded by the DIP Agent or such Lender and any of
the Post-Petition Obligations continued, and the Post-Petition Obligations, or
the liability of any other Person upon or for any part thereof, or any
collateral security or guarantee therefor or right of offset with respect
thereto, may, from time to time, in whole or in part, be renewed, extended,
amended, modified, accelerated, compromised, waived, surrendered or released by
the DIP Agent or any Lender, and this Agreement and the other Loan Documents and
any other documents executed and delivered in connection therewith may be
amended, modified, supplemented or terminated, in whole or in part, as the DIP
Agent (or the Required Lenders or all Lenders, as the case may be) may deem
advisable from time to time, and any collateral security, guarantee or right of
offset at any time held by the DIP Agent or any Lender for the payment of the
Post-Petition Obligations may be sold, exchanged, waived, surrendered or
released.  Neither the DIP Agent nor any Lender shall as a condition
to any Guarantor’s liability hereunder have any obligation to protect, secure,
perfect or insure any Lien at any time held by it as security for the
Post-Petition Obligations or for the guarantee contained in this Section 10
or any property subject thereto.

           

          
            
              
              

            

            
              -79-

              
                

              

            

            
              
              

            

          

              

              Section
10.5   Guarantee Absolute and
Unconditional.  Each Guarantor waives any and all notice of the
creation, renewal, extension or accrual of any of the Post-Petition Obligations
and notice of or proof of reliance by the DIP Agent or any Lender upon the
guarantee contained in this Section 10 or acceptance of the guarantee
contained in this Section 10; the Post-Petition Obligations, and any of
them, shall conclusively be deemed to have been created, contracted or incurred,
or renewed, extended, amended or waived, in reliance upon the guarantee
contained in this Section 10; and all dealings between the Borrower and any
of the Guarantors, on the one hand, and the DIP Agent and the Lenders, on the
other hand, likewise shall be conclusively presumed to have been had or
consummated in reliance upon the guarantee contained in this
Section 10.  Each Guarantor waives diligence, presentment,
protest, demand for payment and notice of default or nonpayment to or upon the
Borrower or any of the Guarantors with respect to the Post-Petition
Obligations.  Each Guarantor understands and agrees that the guarantee
contained in this Section 10 shall be construed as a continuing, absolute
and unconditional guarantee of payment without regard to (a) the validity
or enforceability of this Agreement or any other Loan Document, any of the
Post-Petition Obligations or any other collateral security therefor or guarantee
or right of offset with respect thereto at any time or from time to time held by
the DIP Agent or any Lender, (b) any defense, set-off or counterclaim
(other than a defense of payment or performance) which may at any time be
available to or be asserted by the Borrower or any other Person against the DIP
Agent or any Lender, or (c) any other circumstance whatsoever (with or without
notice to or knowledge of the Borrower or such Guarantor) which constitutes, or
might be construed to constitute, an equitable or legal discharge of the
Borrower for the Post-Petition Obligations, or of such Guarantor under the
guarantee contained in this Section 10, in bankruptcy or in any other
instance (other than a defense of payment or performance).  When
making any demand hereunder or otherwise pursuing its rights and remedies
hereunder against any Guarantor, the DIP Agent or any Lender may, but shall be
under no obligation to, make a similar demand on or otherwise pursue such rights
and remedies as it may have against the Borrower, any other Guarantor or any
other Person or against any collateral security or guarantee for the
Post-Petition Obligations or any right of offset with respect thereto, and any
failure by the DIP Agent or any Lender to make any such demand, to pursue such
other rights or remedies or to collect any payments from the Borrower, any other
Guarantor or any other Person or to realize upon any such collateral security or
guarantee or to exercise any such right of offset, or any release of the
Borrower, any other Guarantor or any other Person or any such collateral
security, guarantee or right of offset, shall not relieve any Guarantor of any
obligation or liability hereunder, and shall not impair or affect the rights and
remedies, whether express, implied or available as a matter of law, of the DIP
Agent or any Lender against any Guarantor.  For the purposes hereof
“demand” shall include the commencement and continuance of any legal
proceedings.

           

              Section
10.6   Reinstatement.  The
guarantee contained in this Section 10 shall continue to be effective, or
be reinstated, as the case may be, if at any time payment, or any part thereof,
of any of the Post-Petition Obligations is rescinded or must otherwise be
restored or returned by the DIP Agent or any Lender upon the insolvency,
bankruptcy, dissolution, liquidation or reorganization of the Borrower or any
Guarantor, or upon or as a result of the appointment of a receiver, intervenor
or conservator of, or trustee or similar officer for, the Borrower or any
Guarantor or any substantial part of its Property, or otherwise, all as though
such payments had not been made.

           

          
            
              
              

            

            
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              Section
10.7   Payments.  Each
Guarantor hereby guarantees that payments hereunder will be paid to the DIP
Agent without set-off or counterclaim in Dollars at the office of the DIP Agent
specified in this Agreement.

           

              Section
10.8   Release of
Guaranties.  Each Lender and L/C Issuer hereby agrees that in
the event all of the stock (or other equity interests) of a Guarantor is sold,
transferred, or otherwise disposed of in accordance with the terms and
conditions of this Agreement (including a sale, transfer, or disposition
permitted by the terms of Section 8.10 hereof, if any, or which has
otherwise been consented to in accordance with Section 12.13 hereof) to a
party other than the Borrower or a Subsidiary, the DIP Agent will release the
Guaranty of such Guarantor concurrently with such sale, transfer or other
disposition.

           

          
            	
                     
      

                  	
                    Section
      11.The DIP Agent.

                  

          

           

              Section
11.1   Appointment and Authorization of DIP
Agent.  Each Lender and the L/C Issuer hereby appoints
Bank of Montreal as the DIP Agent under the Loan Documents and hereby authorizes
the DIP Agent to take such action as DIP Agent on its behalf and to exercise
such powers under the Loan Documents as are delegated to the DIP Agent by the
terms thereof, together with such powers as are reasonably incidental
thereto.  The Lenders and L/C Issuer expressly agree that the DIP
Agent is not acting as a fiduciary of the Lenders or the L/C Issuer in
respect of the Loan Documents, the Borrower or otherwise, and nothing herein or
in any of the other Loan Documents shall result in any duties or obligations on
the DIP Agent or any of the Lenders or L/C Issuer except as expressly set
forth herein.

           

              Section
11.2   DIP
Agent and its Affiliates.  The DIP Agent shall have the same
rights and powers under this Agreement and the other Loan Documents as any other
Lender and may exercise or refrain from exercising such rights and power as
though it were not the DIP Agent (except any action provided by the Loan
Documents to be taken by the DIP Agent), and the DIP Agent and its affiliates
may accept deposits from, lend money to, and generally engage in any kind of
business with the Borrower or any Affiliate of the Borrower as if it were not
the DIP Agent under the Loan Documents.  The term “Lender” as used herein and in
all other Loan Documents, unless the context otherwise clearly requires,
includes the DIP Agent in its individual capacity as a Lender (if
applicable).

           

              Section
11.3   Action
by DIP Agent.  If the DIP Agent receives from the Borrower a
written notice of an Event of Default pursuant to Section 8.5 hereof, the
DIP Agent shall promptly give each of the Lenders and L/C Issuer written
notice thereof.  The obligations of the DIP Agent under the Loan
Documents are only those expressly set forth therein.  Without
limiting the generality of the foregoing, the DIP Agent shall not be required to
take any action hereunder with respect to any Default or Event of Default,
except as expressly provided in Section 9.2.  Upon the occurrence
of an Event of Default, the DIP Agent shall take such action to enforce its Lien
on the Collateral and to preserve and protect the Collateral as may be directed
by the Required Lenders.  Unless and until the Required Lenders give
such direction, the DIP Agent may (but shall not be obligated to) take or
refrain from taking such actions as it deems appropriate and in the best
interest of all the Lenders and L/C Issuer.  In no event,
however, shall the DIP Agent be required to take any action in violation of
applicable law or of any provision of 

           

          
            
              
              

            

            
              -81-

              
                

              

            

            
              
              

            

          

           

          any Loan
Document, and the DIP Agent shall in all cases be fully justified in failing or
refusing to act hereunder or under any other Loan Document unless it first
receives any further assurances of its indemnification from the Lenders that it
may require, including prepayment of any related expenses and any other
protection it requires against any and all costs, expense, and liability which
may be incurred by it by reason of taking or continuing to take any such
action.  The DIP Agent shall be entitled to assume that no Default or
Event of Default exists unless notified in writing to the contrary by a Lender,
the L/C Issuer, or the Borrower.  In all cases in which the Loan
Documents do not require the DIP Agent to take specific action, the DIP Agent
shall be fully justified in using its discretion in failing to take or in taking
any action thereunder.  Any instructions of the Required Lenders, or
of any other group of Lenders called for under the specific provisions of the
Loan Documents, shall be binding upon all the Lenders and the holders of the
Post-Petition Obligations.

           

              Section
11.4   Consultation with
Experts.  The DIP Agent may consult with legal counsel,
independent public accountants, and other experts selected by it and shall not
be liable for any action taken or omitted to be taken by it in good faith in
accordance with the advice of such counsel, accountants or experts.

           

              Section
11.5   Liability of DIP Agent; Credit
Decision.  Neither the DIP Agent nor any of its directors,
officers, agents, employees, attorneys or financial advisors shall be liable for
any action taken or not taken by it in connection with the Loan
Documents:  (i) with the consent or at the request of the
Required Lenders or (ii) in the absence of its own gross negligence or
willful misconduct.  Neither the DIP Agent nor any of its directors,
officers, agents, employees, attorneys or financial advisors shall be
responsible for or have any duty to ascertain, inquire into or
verify:  (i) any statement, warranty or representation made in
connection with this Agreement, any other Loan Document or any Credit Event;
(ii) the performance or observance of any of the covenants or agreements of
the Borrower or any Subsidiary contained herein or in any other Loan Document;
(iii) the satisfaction of any condition specified in Section 7 hereof,
except receipt of items required to be delivered to the DIP Agent; or
(iv) the validity, effectiveness, genuineness, enforceability, perfection,
value, worth or collectibility hereof or of any other Loan Document or of any
other documents or writing furnished in connection with any Loan Document or of
any Collateral; and the DIP Agent makes no representation of any kind or
character with respect to any such matter mentioned in this
sentence.  The DIP Agent may execute any of its duties under any of
the Loan Documents by or through employees, agents, and attorneys-in-fact and
shall not be answerable to the Lenders, the L/C Issuer, the Borrower, or
any other Person for the default or misconduct of any such agents or
attorneys-in-fact selected with reasonable care.  The DIP Agent shall
not incur any liability by acting in reliance upon any notice, consent,
certificate, other document or statement (whether written or oral) believed by
it to be genuine or to be sent by the proper party or parties.  In
particular and without limiting any of the foregoing, the DIP Agent shall have
no responsibility for confirming the accuracy of any compliance certificate or
other document or instrument received by it under the Loan
Documents.  The DIP Agent may treat the payee of any Obligation as the
holder thereof until written notice of transfer shall have been filed with the
DIP Agent signed by such payee in form satisfactory to the DIP
Agent.  Each Lender and L/C Issuer acknowledges that it has
independently and without reliance on the DIP Agent or any other Lender or
L/C Issuer, and based upon such information, investigations and inquiries
as it deems appropriate, made its own credit analysis and decision to extend
credit to the Borrower in 

           

          
            
              
              

            

            
              -82-

              
                

              

            

            
              
              

            

          

           

          the
manner set forth in the Loan Documents.  It shall be the
responsibility of each Lender and L/C Issuer to keep itself informed as to
the creditworthiness of the Borrower and its Subsidiaries, and the DIP Agent
shall have no liability to any Lender or L/C Issuer with respect
thereto.

           

              Section
11.6   Indemnity.  The
Lenders shall ratably, in accordance with their respective DIP Percentages,
indemnify and hold the DIP Agent, and its directors, officers, employees,
agents, representatives, attorneys and financial advisors harmless from and
against any liabilities, losses, costs or expenses suffered or incurred by it
under any Loan Document or in connection with the transactions contemplated
thereby, regardless of when asserted or arising, except to the extent they are
promptly reimbursed for the same by the Borrower and except to the extent that
any event giving rise to a claim was caused by the gross negligence or willful
misconduct of the party seeking to be indemnified.  The obligations of
the Lenders under this Section shall survive termination of this
Agreement.  The DIP Agent shall be entitled to offset amounts received
for the account of a Lender under this Agreement against unpaid amounts due from
such Lender to the DIP Agent hereunder (whether as fundings of participations,
indemnities or otherwise), but shall not be entitled to offset against amounts
owed to the DIP Agent by any Lender arising outside of this Agreement and the
other Loan Documents.

           

              Section
11.7   Resignation of DIP Agent and
Successor DIP Agent.  The DIP Agent may resign at any time by
giving written notice thereof to the Lenders, the L/C Issuer, and the
Borrower.  Upon any such resignation of the DIP Agent, the Required
Lenders shall have the right to appoint a successor DIP Agent.  If no
successor DIP Agent shall have been so appointed by the Required Lenders, and
shall have accepted such appointment, within 30 days after the retiring DIP
Agent’s giving of notice of resignation then the retiring DIP Agent may, on
behalf of the Lenders, appoint a successor DIP Agent, which may be any Lender
hereunder or any commercial bank, or an Affiliate of a commercial bank, having
an office in the United States of America and having a combined capital and
surplus of at least $200,000,000.  Upon the acceptance of its
appointment as the DIP Agent hereunder, such successor DIP Agent shall thereupon
succeed to and become vested with all the rights and duties of the retiring DIP
Agent under the Loan Documents, and the retiring DIP Agent shall be discharged
from its duties and obligations thereunder.  After any retiring DIP
Agent’s resignation hereunder as DIP Agent, the provisions of this
Section 11 and all protective provisions of the other Loan Documents shall
inure to its benefit as to any actions taken or omitted to be taken by it while
it was DIP Agent, but no successor DIP Agent shall in any event be liable or
responsible for any actions of its predecessor.  If the DIP Agent
resigns and no successor is appointed, the rights and obligations of such DIP
Agent shall be automatically assumed by the Required Lenders and (i) the
Borrower shall be directed to make all payments due each Lender and
L/C Issuer hereunder directly to such Lender or L/C Issuer and
(ii) the DIP Agent’s rights in the Collateral shall be assigned without
representation, recourse or warranty to the Lenders and L/C Issuer as their
interests may appear.

           

              Section
11.8   L/C
Issuer and Swing Line Lender.  The L/C Issuer shall act on
behalf of the Lenders with respect to any Letters of Credit issued by it and the
documents associated therewith, and the Swing Line Lender shall act on behalf of
the Lenders with respect to the Swing Loans made hereunder.  The
L/C Issuer and the Swing Line Lender shall each have all of the benefits
and immunities (i) provided to the DIP Agent in this Section 11 with
respect to any acts taken or omissions suffered by the L/C Issuer in
connection with Letters of Credit issued by it or proposed 

           

          
            
              
              

            

            
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          to be
issued by it and the Applications pertaining to such Letters of Credit or by the
Swing Line Lender in connection with Swing Loans made or to be made hereunder as
fully as if the term “DIP
Agent,” as used in this Section 11, included the L/C Issuer and
the Swing Line Lender with respect to such acts or omissions and (ii) as
additionally provided in this Agreement with respect to such L/C Issuer or
Swing Line Lender, as applicable.

           

              Section
11.9   Authorization to Release or
Subordinate or Limit Liens and to Release Guaranties.  The DIP
Agent is hereby irrevocably authorized by each of the Lenders and the
L/C Issuer to (a) release any Lien covering any Collateral that is
sold, transferred, or otherwise disposed of in accordance with the terms and
conditions of this Agreement and the relevant Collateral Documents (including a
sale, transfer, or disposition permitted by the terms of Section 8.10
hereof or which has otherwise been consented to in accordance with
Section 12.13 hereof), (b) release or subordinate any Lien on
Collateral consisting of goods financed with purchase money indebtedness or
under a Capital Lease to the extent such purchase money indebtedness or
Capitalized Lease Obligation, and the Lien securing the same, are permitted by
Sections 8.7(b) and 8.8(d), (m), (n) and (o) hereof, (c) reduce or
limit the amount of the indebtedness secured by any particular item of
Collateral to an amount not less than the estimated value thereof to the extent
necessary to reduce mortgage registry, filing and similar tax, (d) release
Liens on the Collateral following termination or expiration of the DIP
Commitments and payment in full in cash of the Post-Petition Obligations and the
cancellation, expiration or cash-collateralization as provided herein of all
Letters of Credit outstanding hereunder, and (e) release a Guarantor of its
obligations under a Guaranty if all of the stock (or other equity interests) of
such Guarantor is sold, transferred, or otherwise disposed of in accordance with
the terms and conditions of this Agreement (including a sale, transfer, or
disposition permitted by the terms of Section 8.10 hereof, if any, or which
has otherwise been consented to in accordance with Section 12.13 hereof) to
a party other than the Borrower or a Subsidiary.

           

              Section
11.10   Authorization to Enter into, and
Enforcement of, the Collateral Documents.  The DIP Agent is
hereby irrevocably authorized by each of the Lenders and the L/C Issuer to
execute and deliver the Collateral Documents on behalf of each of the Lenders
and their Affiliates and the L/C Issuer and to take such action and
exercise such powers under the Collateral Documents as the DIP Agent considers
appropriate, provided the DIP Agent shall not amend the Collateral Documents
unless such amendment is agreed to in writing by the Required
Lenders.  Each Lender and L/C Issuer acknowledges and agrees that
it will be bound by the terms and conditions of the Collateral Documents upon
the execution and delivery thereof by the DIP Agent.  Except as
otherwise specifically provided for herein, no Lender (or its Affiliates) or
L/C Issuer, other than the DIP Agent, shall have the right to institute any
suit, action or proceeding in equity or at law for the foreclosure or other
realization upon any Collateral or for the execution of any trust or power in
respect of the Collateral or for the appointment of a receiver or for the
enforcement of any other remedy under the Collateral Documents; it being
understood and intended that no one or more of the Lenders (or their Affiliates)
or L/C Issuer shall have any right in any manner whatsoever to affect,
disturb or prejudice the Lien of the DIP Agent (or any security trustee
therefor) under the Collateral Documents by its or their action or to enforce
any right thereunder, and that all proceedings at law or in equity shall be
instituted, had, and maintained by the DIP Agent (or its security trustee) in
the manner provided for in the relevant Collateral Documents for the benefit of
the Lenders, the L/C Issuer, and their Affiliates.

           

          
            
              
              

            

            
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                    Section
      12.Miscellaneous.

                  

          

           

              Section
12.1   Withholding
Taxes.  (a) Payments Free of
Withholding.  Except as otherwise required by law and subject to
Section 12.1(b) hereof, each payment by the Borrower and the Guarantors
under this Agreement or the other Loan Documents shall be made without
withholding for or on account of any present or future taxes (other than overall
net income taxes on the recipient) imposed by or within the jurisdiction in
which the Borrower or such Guarantor is domiciled, any jurisdiction from which
the Borrower or such Guarantor makes any payment, or (in each case) any
political subdivision or taxing authority thereof or therein.  If any
such withholding is so required, the Borrower or such Guarantor shall make the
withholding, pay the amount withheld to the appropriate governmental authority
before penalties attach thereto or interest accrues thereon, and forthwith pay
such additional amount as may be necessary to ensure that the net amount
actually received by each Lender, the L/C Issuer, and the DIP Agent free
and clear of such taxes (including such taxes on such additional amount) is
equal to the amount which that Lender, L/C Issuer, or the DIP Agent (as the
case may be) would have received had such withholding not been
made.  If the DIP Agent, the L/C Issuer, or any Lender pays any
amount in respect of any such taxes, penalties or interest, the Borrower or such
Guarantor shall reimburse the DIP Agent, the L/C Issuer or such Lender for
that payment on demand in the currency in which such payment was
made.  If the Borrower or such Guarantor pays any such taxes,
penalties or interest, it shall deliver official tax receipts evidencing that
payment or certified copies thereof to the Lender, the L/C Issuer or DIP
Agent on whose account such withholding was made (with a copy to the DIP Agent
if not the recipient of the original) on or before the thirtieth day after
payment.

           

              (b) 
U.S. Withholding Tax
Exemptions.  Each Lender or L/C Issuer that is not a
United States person (as such term is defined in Section 7701(a)(30) of the
Code) shall submit to the Borrower and the DIP Agent on or before the date the
initial Credit Event is made hereunder or, if later, the date such financial
institution becomes a Lender or L/C Issuer hereunder, two duly completed
and signed copies of (i) either Form W-8 BEN (relating to such Lender
or L/C Issuer and entitling it to a complete exemption from withholding
under the Code on all amounts to be received by such Lender or L/C Issuer,
including fees, pursuant to the Loan Documents and the Post-Petition
Obligations) or Form W-8 ECI (relating to all amounts to be received by
such Lender or L/C Issuer, including fees, pursuant to the Loan Documents
and the Post-Petition Obligations) of the United States Internal Revenue Service
or (ii) solely if such Lender is claiming exemption from United States
withholding tax under Section 871(h) or 881(c) of the Code with respect to
payments of “portfolio interest,” a Form W-8 BEN, or any successor form
prescribed by the Internal Revenue Service, and a certificate representing that
such Lender is not a bank for purposes of Section 881(c) of the Code, is
not a 10 percent shareholder (within the meaning of Section 871(h)(3)(B) of
the Code) of the Borrower and is not a controlled foreign corporation related to
the Borrower (within the meaning of Section 864(d)(4) of the
Code).  Thereafter and from time to time, each Lender and
L/C Issuer shall submit to the Borrower and the DIP Agent such additional
duly completed and signed copies of one or the other of such Forms (or such
successor forms as shall be adopted from time to time by the relevant
United States taxing authorities) and such other certificates as may be
(i) requested by the Borrower in a written notice, directly or through the
DIP Agent, to such Lender or L/C Issuer and (ii) required under
then-current United States law or regulations to avoid or reduce United States

           

          
            
              
              

            

            
              -85-

              
                

              

            

            
              
              

            

          

           

          withholding
taxes on payments in respect of all amounts to be received by such Lender or
L/C Issuer, including fees, pursuant to the Loan Documents or the
Post-Petition Obligations.  Upon the request of the Borrower or the
DIP Agent, each Lender and L/C Issuer that is a United States person (as
such term is defined in Section 7701(a)(30) of the Code) shall submit to
the Borrower and the DIP Agent a certificate to the effect that it is such a
United States person.

           

              (c) 
Inability of Lender to Submit
Forms.  If any Lender or L/C Issuer determines, as a
result of any change in applicable law, regulation or treaty, or in any official
application or interpretation thereof, that it is unable to submit to the
Borrower or the DIP Agent any form or certificate that such Lender or
L/C Issuer is obligated to submit pursuant to subsection (b) of this
Section 12.1 or that such Lender or L/C Issuer is required to withdraw
or cancel any such form or certificate previously submitted or any such form or
certificate otherwise becomes ineffective or inaccurate, such Lender or
L/C Issuer shall promptly notify the Borrower and DIP Agent of such fact
and the Lender or L/C Issuer shall to that extent not be obligated to
provide any such form or certificate and will be entitled to withdraw or cancel
any affected form or certificate, as applicable.

           

              Section
12.2   No
Waiver, Cumulative Remedies.  No delay or failure on the part
of the DIP Agent, the L/C Issuer, or any Lender, or on the part of the
holder or holders of any of the Post-Petition Obligations, in the exercise of
any power or right under any Loan Document shall operate as a waiver thereof or
as an acquiescence in any default, nor shall any single or partial exercise of
any power or right preclude any other or further exercise thereof or the
exercise of any other power or right.  The rights and remedies
hereunder of the DIP Agent, the L/C Issuer, the Lenders, and of the holder
or holders of any of the Post-Petition Obligations are cumulative to, and not
exclusive of, any rights or remedies which any of them would otherwise
have.

           

              Section
12.3   Non-Business
Days.  If any payment hereunder becomes due and payable on a
day which is not a Business Day, the due date of such payment shall be extended
to the next succeeding Business Day on which date such payment shall be due and
payable.  In the case of any payment of principal falling due on a day
which is not a Business Day, interest on such principal amount shall continue to
accrue during such extension at the rate per annum then in effect, which accrued
amount shall be due and payable on the next scheduled date for the payment of
interest.

           

              Section
12.4   Documentary
Taxes.  The Borrower agrees to pay on demand any documentary,
stamp or similar taxes payable in respect of this Agreement or any other Loan
Document, including interest and penalties, in the event any such taxes are
assessed, irrespective of when such assessment is made and whether or not any
credit is then in use or available hereunder.

           

              Section
12.5   Survival of
Representations.  All representations and warranties made
herein or in any other Loan Document or in certificates given pursuant hereto or
thereto shall survive the execution and delivery of this Agreement and the other
Loan Documents, and shall continue in full force and effect with respect to the
date as of which they were made as long as any credit is in use or available
hereunder.

           

          
            
              
              

            

            
              -86-

              
                

              

            

            
              
              

            

          

              

              Section
12.6   Survival of
Indemnities.  All indemnities and other provisions relative to
reimbursement to the Lenders and L/C Issuer of amounts sufficient to
protect the yield of the Lenders and L/C Issuer with respect to the Loans
and Letters of Credit, including, but not limited to, Section 12.15 hereof,
shall survive the termination of this Agreement and the other Loan Documents and
the payment of the Post-Petition Obligations.

           

              Section
12.7   Sharing of
Set-Off.  Each Lender agrees with each other Lender a party
hereto that if such Lender shall receive and retain any payment, whether by
set-off or application of deposit balances or otherwise, on any of the Loans or
Reimbursement Obligations in excess of its ratable share of payments on all such
Post-Petition Obligations then outstanding to the Lenders, then such Lender
shall purchase for cash at face value, but without recourse, ratably from each
of the other Lenders such amount of the Loans or Reimbursement Obligations, or
participations therein, held by each such other Lenders (or interest therein) as
shall be necessary to cause such Lender to share such excess payment ratably
with all the other Lenders; provided, however, that if any such purchase is made
by any Lender, and if such excess payment or part thereof is thereafter
recovered from such purchasing Lender, the related purchases from the other
Lenders shall be rescinded ratably and the purchase price restored as to the
portion of such excess payment so recovered, but without
interest.  For purposes of this Section, amounts owed to or recovered
by the L/C Issuer in connection with Reimbursement Obligations in which
Lenders have been required to fund their participation shall be treated as
amounts owed to or recovered by the L/C Issuer as a Lender
hereunder.

           

              Section
12.8   Notices.  Except as
otherwise specified herein, all notices hereunder and under the other Loan
Documents shall be in writing (including, without limitation, notice by
telecopy) and shall be given to the relevant party at its address or telecopier
number set forth below, or such other address or telecopier number as such party
may hereafter specify by notice to the DIP Agent and the Borrower given by
courier, by United States certified or registered mail, by telecopy or by other
telecommunication device capable of creating a written record of such notice and
its receipt.  Each Guarantor agrees that any notice to be given to it
pursuant to this Agreement shall be effective as to such Guarantor if given to
the Borrower.  Notices under the Loan Documents to any Lender shall be
addressed to its address or telecopier number set forth on its Administrative
Questionnaire; and notices under the Loan Documents to the Borrower, any
Guarantor, the DIP Agent or L/C Issuer shall be addressed to its respective
address or telecopier number set forth below:

          

           

          
            	
                    to
      the Borrower or any Guarantor:

                     

                    Pilgrim’s
      Pride Corporation

                    4845
      US Highway 271 N

                    Pittsburg,
      Texas 75686

                    Attention:Chief
      Financial Officer

                    Telephone:903-434-1505

                    Telecopy:972-290-8950

                  	
                    to
      the DIP Agent and L/C Issuer :

                     

                    Bank
      of Montreal

                    115
      South LaSalle Street

                    Chicago,
      Illinois  60603

                    Attention:Barry
      Stratton

                    Telephone:(312)
      461-7910

                    Telecopy:(312)
      461-7958

                  
	 
      	 
      
	
                    with
      copy to (which shall not constitute notice):

                  	 
      

          

           

          
            
              
              

            

            
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                    Weil,
      Gotshal & Manges LLP

                    200
      Crescent Court, Suite 300

                    Dallas,
      Texas 75201-6950

                    Attention:Angela
      L. Fontana

                    Telephone:214-746-7895

                    Telecopy:214-746-7777

                  	 
      
	 
      	 
      
	
                    with
      copy to (which shall not constitute notice):

                  	 
      
	 
      	 
      
	
                    Baker
      & McKenzie LLP

                    2300
      Trammell Crow Center

                    2001
      Ross Avenue

                    Dallas,
      Texas 75201

                    Attention:Crews
      Lott

                    Telephone:(214)
      978-3042

                    Telecopy:(214)
      978-3099

                  	 
      

          

           

          Each such
notice, request or other communication shall be effective (i) if given by
telecopier, when such telecopy is transmitted to the telecopier number specified
in this Section or in the relevant Administrative Questionnaire and a
confirmation of such telecopy has been received by the sender, (ii) if
given by mail, 5 days after such communication is deposited in the mail,
certified or registered with return receipt requested, addressed as aforesaid or
(iii) if given by any other means, when delivered at the addresses
specified in this Section or in the relevant Administrative Questionnaire;
provided that any notice given pursuant to Section 1 hereof shall be
effective only upon receipt.

           

              Section
12.9   Counterparts.  This
Agreement may be executed in any number of counterparts, and by the different
parties hereto on separate counterpart signature pages, and all such
counterparts taken together shall be deemed to constitute one and the same
instrument.  Delivery of executed counterparts of this Agreement by
telecopy or other electronic transmission shall be effective as an
original.

           

              Section
12.10   Successors and
Assigns.  This Agreement shall be binding upon the Borrower,
Guarantors, the DIP Agent and the Lenders and their respective successors and
assigns, and shall inure to the benefit of the Borrower, Guarantors, DIP Agent,
the L/C Issuer, and each of the Lenders, and the benefit of their
respective successors and assigns, including any subsequent holder of any of the
Post-Petition Obligations.  The Borrower and the Guarantors may not
assign any of their rights or obligations under any Loan Document without the
written consent of all of the Lenders and, with respect to any Letter of Credit
or the Application therefor, the L/C Issuer.

           

              Section
12.11   Participants.  Each
Lender shall have the right at its own cost to grant participations (to be
evidenced by one or more agreements or certificates of participation) in
the

           

          
            
              
              

            

            
              -88-

              
                

              

            

            
              
              

            

          

           

          Loans
made and Reimbursement Obligations and/or DIP Commitments held by such Lender at
any time and from time to time to one or more other Persons; provided that no
such participation shall relieve any Lender of any of its obligations under this
Agreement, and, provided, further that no such participant shall have any rights
under this Agreement except as provided in this Section, and the DIP Agent shall
have no obligation or responsibility to such participant.  Any
agreement pursuant to which such participation  is granted shall
provide that the granting Lender shall retain the sole right and responsibility
to enforce the obligations of the Borrower under this Agreement and the other
Loan Documents including, without limitation, the right to approve any
amendment, modification or waiver of any provision of the Loan Documents, except
that such agreement may provide that such Lender will not agree to any
modification, amendment or waiver of the Loan Documents that would reduce the
amount of or postpone any fixed date for payment of any Obligation in which such
participant has an interest.  Any party to which such a participation
has been granted shall have the benefits of Section 1.11 and
Section 10.3 hereof.

           

              Section
12.12   Assignments.  (a) Any
Lender may at any time assign to one or more Eligible Assignees all or a portion
of such Lender’s rights and obligations under this Agreement (including all or a
portion of its DIP Commitment and the Loans at the time owing to it); provided
that any such assignment shall be subject to the following
conditions:

           

              (i) 
Minimum
Amounts.  (A) In the case of an assignment of the entire
remaining amount of the assigning Lender’s DIP Commitment and the Loans and
participation interest in L/C Obligations at the time owing to it or in the case
of an assignment to a Lender, an Affiliate of a Lender or an Approved Fund, no
minimum amount need be assigned; and (B) in any case not described in
subsection (a)(i)(A) of this Section, the aggregate amount of the DIP Commitment
(which for this purpose includes Loans and participation interest in L/C
Obligations outstanding thereunder) or, if the applicable DIP Commitment is not
then in effect, the principal outstanding balance of the Loans and participation
interest in L/C Obligations of the assigning Lender subject to each such
assignment (determined as of the date the Assignment and Acceptance with respect
to such assignment is delivered to the DIP Agent or, if “Effective Date” is specified
in the Assignment and Acceptance, as of the Effective Date) shall not be less
than $5,000,000, in the case of any assignment, unless the DIP Agent otherwise
consents (such consent not to be unreasonably withheld or delayed);

           

              (ii) 
Proportionate
Amounts.  Each partial assignment shall be made as an
assignment of a proportionate part of all the assigning Lender’s rights and
obligations under this Agreement with respect to the Loan or the DIP Commitment
assigned.

           

             (iii)  Required
Consents.  No consent shall be required for any assignment
except to the extent required by Section 12.12(a)(i)(B) and, in
addition:

           

              (a)  the
consent of the DIP Agent (such consent not to be unreasonably withheld or
delayed) shall be required for assignments to a Person that is not a Lender, an
Affiliate of a Lender or an Approved Fund with respect to a Lender;

           

          
            
              
              

            

            
              -89-

              
                

              

            

            
              
              

            

          

              

              (b)  the
consent of the L/C Issuer (such consent not to be unreasonably withheld or
delayed) shall be required for any assignment that increases the obligation of
the assignee to participate in exposure under one or more Letters of Credit
(whether or not then outstanding); and

           

              (c)  the
consent of the Swing Line Lender (such consent not to be unreasonably withheld
or delayed) shall be required for any assignment that increases the obligation
of the assignee to participate in exposure under one or more Swing Loans
(whether or not then outstanding).

           

              (iv) 
Assignment and
Acceptance.The parties to each assignment shall execute and deliver to
the DIP Agent an Assignment and Acceptance, together with a processing and
recordation fee of $3,500, and the assignee, if it is not a Lender, shall
deliver to the DIP Agent an Administrative Questionnaire.

           

              (v) 
No Assignment to Borrower or
Affiliates. No such assignment shall be made to the Borrower or any of
its Affiliates or Subsidiaries.

           

              (vi) 
No Assignment to Natural
Persons.  No such assignment shall be made to a natural
person.

           

          Subject
to acceptance and recording thereof by the DIP Agent pursuant to
Section 12.12(b) hereof, from and after the effective date specified in
each Assignment and Acceptance, the assignee thereunder shall be a party to this
Agreement and, to the extent of the interest assigned by such Assignment and
Acceptance, have the rights and obligations of a Lender under this Agreement,
and the assigning Lender thereunder shall, to the extent of the interest
assigned by such Assignment and Acceptance, be released from its obligations
under this Agreement (and, in the case of an Assignment and Acceptance covering
all of the assigning Lender’s rights and obligations under this Agreement, such
Lender shall cease to be a party hereto) but shall continue to be entitled to
the benefits of Sections 12.6 and 12.15 with respect to facts and
circumstances occurring prior to the effective date of such
assignment.  Any assignment or transfer by a Lender of rights or
obligations under this Agreement that does not comply with this
Section shall be treated for purposes of this Agreement as a sale by such
Lender of a participation in such rights and obligations in accordance with
Section 12.11 hereof.

           

              (b) 
Register.  The DIP
Agent, acting solely for this purpose as an agent of the Borrower, shall
maintain at one of its offices in Chicago, Illinois, a copy of each Assignment
and Acceptance delivered to it and a register for the recordation of the names
and addresses of the Lenders, and the DIP Commitments of, and principal amounts
of the Loans owing to, each Lender pursuant to the terms hereof from time to
time (the “Register”).  The
entries in the Register shall be conclusive, and the Borrower, the DIP Agent,
and the Lenders may treat each Person whose name is recorded in the Register
pursuant to the terms hereof as a Lender hereunder for all purposes of this
Agreement, notwithstanding notice to the contrary.  The Register shall
be available for inspection by the Borrower and any Lender, at any reasonable
time and from time to time upon reasonable prior notice.

           

          
            
              
              

            

            
              -90-

              
                

              

            

            
              
              

            

          

              

              (c)  Any
Lender may at any time pledge or grant a security interest in all or any portion
of its rights under this Agreement to secure obligations of such Lender,
including any such pledge or grant to a Federal Reserve Bank, and this
Section shall not apply to any such pledge or grant of a security interest;
provided that no such pledge or grant of a security interest shall release a
Lender from any of its obligations hereunder or substitute any such pledgee or
secured party for such Lender as a party hereto; provided further, however, the
right of any such pledgee or grantee (other than any Federal Reserve Bank) to
further transfer all or any portion of the rights pledged or granted to it,
whether by means of foreclosure or otherwise, shall be at all times subject to
the terms of this Agreement.

           

              (d) 
Notwithstanding anything to the contrary herein, if at any time the Swing Line
Lender assigns all of its DIP Commitments and DIP Loans pursuant to subsection
(a) above, the Swing Line Lender may terminate the Swing Line.  In the
event of such termination of the Swing Line, the Borrower shall be entitled to
appoint another Lender to act as the successor Swing Line Lender hereunder (with
such Lender’s consent); provided, however, that the
failure of the Borrower to appoint a successor shall not affect the resignation
of the Swing Line Lender.  If the Swing Line Lender terminates the
Swing Line, it shall retain all of the rights of the Swing Line Lender provided
hereunder with respect to Swing Loans made by it and outstanding as of the
effective date of such termination, including the right to require Lenders to
make DIP Loans or fund participations in outstanding Swing Loans pursuant to
Section 1.6 hereof.

           

              Section
12.13   Amendments.  Any
provision of this Agreement or the other Loan Documents may be amended or waived
if, but only if, such amendment or waiver is in writing and is signed by (a) the
Borrower, (b) the Required Lenders, and (c) if the rights or duties of the
DIP Agent, the L/C Issuer, or the Swing Line Lender are affected thereby,
the DIP Agent, the L/C Issuer, or the Swing Line Lender, as applicable;
provided that:

           

              (i)  no
amendment or waiver pursuant to this Section 12.13 shall (A) increase
any DIP Commitment of any Lender without the consent of such Lender or
(B) reduce the amount of or postpone the date for any scheduled payment of
any principal of or interest on any Loan or of any Reimbursement Obligation or
of any fee payable hereunder without the consent of the Lender to which such
payment is owing or which has committed to make such Loan or Letter of Credit
(or participate therein) hereunder;

           

              (ii)  no
amendment or waiver pursuant to this Section 12.13 shall, unless signed by
each Lender, extend the Termination Date, change the definition of Required
Lenders, change the provisions of this Section 12.13, release all or
substantially all (in value) of the Guaranties or all or substantially all of
the Collateral (except as otherwise provided for in the Loan Documents), or
affect the number of Lenders required to take any action hereunder or under any
other Loan Document; and

           

              (iii) 
no amendment to Section 10 hereof shall be made without the consent of the
Guarantor(s) affected thereby.

           

              Section 12.14 
Headings.
Section headings used in this Agreement are for reference only and shall
not affect the construction of this Agreement.

           

          
            
              
              

            

            
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              Section 12.15 
Costs and Expenses;
Indemnification.  (a) The Borrower agrees to pay all
reasonable costs and expenses of the DIP Agent, the Lenders, the Pre-Petition
BMO Agent and the Pre-Petition BMO Lenders in connection with the preparation,
negotiation, syndication, and administration of the Loan Documents, including,
without limitation, the reasonable fees and disbursements of counsel to the DIP
Agent, the Lenders, the Pre-Petition BMO Agent and the Pre-Petition BMO Lenders
in connection with the preparation and execution of the Loan Documents, and any
amendment, waiver or consent related thereto, whether or not the transactions
contemplated herein are consummated, together with any reasonable fees and
charges suffered or incurred by the DIP Agent, the Lenders, the Pre-Petition BMO
Agent and the Pre-Petition BMO Lenders in connection with reasonable diligence,
computer, duplication, consultation, travel, appraisal, periodic environmental
audits, fixed asset appraisals, collateral filing fees and lien
searches.  The Borrower agrees to pay to the DIP Agent, the
Pre-Petition BMO Agent, the L/C Issuer, each Lender, each Pre-Petition BMO
Lender and any other holder of any Post-Petition Obligations outstanding
hereunder, all costs and expenses reasonably incurred or paid by the DIP Agent,
the Pre-Petition BMO Agent, the L/C Issuer, such Lender, such Pre-Petition
BMO Lender or any such holder, including reasonable attorneys’ fees and
disbursements and court costs, in connection with any Default or Event of
Default hereunder or in connection with the enforcement of any of the Loan
Documents (including all such costs and expenses incurred in connection with any
proceeding under the Bankruptcy Code involving the Borrower or any Guarantor as
a debtor thereunder).  The Borrower shall pay all such reasonable
costs, fees and expenses when invoiced and at the Termination Date, to the
extent not previously invoiced.

           

          The
Borrower and each Guarantor further agrees to indemnify the DIP Agent, the
L/C Issuer, each Lender, and any security trustee therefor, and their
respective directors, officers, employees, agents, representative, financial
advisors, and consultants (each such Person being called an “Indemnitee”) against all
losses, claims, damages, penalties, judgments, liabilities and expenses
(including, without limitation, all reasonable out-of-pocket fees and
disbursements of counsel for any such Indemnitee and all reasonable
out-of-pocket expenses of litigation or preparation therefor, whether or not the
Indemnitee is a party thereto, or any settlement arrangement arising from or
relating to any such litigation) which any of them may pay or incur arising out
of or relating to any Loan Document or any of the transactions contemplated
thereby or the direct or indirect application or proposed application of the
proceeds of any Loan or Letter of Credit or the relationship between
(x) the DIP Agent, the L/C Issuer and/or the Lenders, (y) the DIP
Agent, the L/C Issuer and/or the Lenders and the Borrower, or (z) the DIP
Agent, the L/C Issuer and/or the Lenders and any of the Guarantors, in each
case, except to the extent as finally determined in a final decision of a court
of competent jurisdiction to result from the willful misconduct or gross
negligence of the party seeking indemnification.  The Borrower and
each Guarantor, upon demand by the DIP Agent, the L/C Issuer or a Lender at
any time, shall reimburse the DIP Agent, the L/C Issuer or such Lender for
any reasonable out-of-pocket legal or other expenses (including, without
limitation, all fees and disbursements of counsel for any such Indemnitee)
incurred in connection with investigating or defending against any of the
foregoing (including any settlement costs relating to the foregoing) except to
the extent as finally determined in a final decision of a court of competent
jurisdiction to result from the willful misconduct or gross negligence of the
party seeking indemnification.  Except as a result of willful
misconduct or gross negligence of any such Indemnitee, to the extent permitted
by applicable law, neither the Borrower nor any Guarantor shall assert, and each
such Person hereby

           

          
            
              
              

            

            
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            waives,
any claim against any Indemnitee, on any theory of liability, for special,
indirect, consequential or punitive damages (as opposed to direct or actual
damages) arising out of, in connection with, or as a result of, this Agreement
or the other Loan Documents or any agreement or instrument contemplated hereby
or thereby, the transactions contemplated hereby or thereby, any Loan or Letter
of Credit or the use of the proceeds thereof.  The obligations of the
Borrower and each Guarantor under this Section shall survive the
termination of this Agreement.

          

           

              (b)  The
Borrower and each Guarantor unconditionally agrees to forever indemnify, defend
and hold harmless, and covenants not to sue for any claim for contribution
against, each Indemnitee for any damages, costs, loss or expense, including
without limitation, response, remedial or removal costs and all fees and
disbursements of counsel for any such Indemnitee, arising out of any of the
following:  (i) any presence, Release, threatened Release or disposal
of any hazardous or toxic substance or petroleum by the Borrower or any
Subsidiary or otherwise occurring on or with respect to its Property (whether
owned or leased), (ii) the operation or violation of any Environmental Law,
whether federal, state, or local, and any regulations promulgated thereunder, by
the Borrower or any Subsidiary or otherwise occurring on or with respect to its
Property (whether owned or leased), (iii) any claim for personal injury or
property damage in connection with the Borrower or any Subsidiary or otherwise
occurring on or with respect to its Property (whether owned or leased), and (iv)
the inaccuracy or breach of any environmental representation, warranty or
covenant by the Borrower or any Subsidiary made herein or in any other Loan
Document evidencing or securing any Post-Petition Obligations or setting forth
terms and conditions applicable thereto or otherwise relating thereto, except
for damages arising from the willful misconduct or gross negligence of the
relevant Indemnitee.  This indemnification shall survive the payment
and satisfaction of all Post-Petition Obligations and the termination of this
Agreement, and shall remain in force beyond the expiration of any applicable
statute of limitations and payment or satisfaction in full of any single claim
under this indemnification.  This indemnification shall be binding
upon the successors and assigns of the Borrower and shall inure to the benefit
of each Indemnitee and its successors and assigns.

           

              Section
12.16   Set-off.  In
addition to any rights now or hereafter granted under the Loan Documents or
applicable law and not by way of limitation of any such rights, during the
existence of any Event of Default, each Lender, the L/C Issuer, each
subsequent holder of any Obligation, and each of their respective affiliates, is
hereby authorized by the Borrower and each Guarantor at any time or from time to
time, without notice to the Borrower, any Guarantor or to any other Person, any
such notice being hereby expressly waived, to set-off and to appropriate and to
apply any and all deposits (general or special, including, but not limited to,
indebtedness evidenced by certificates of deposit, whether matured or unmatured,
and in whatever currency denominated, but not including trust accounts) and any
other indebtedness at any time held or owing by that Lender, L/C Issuer,
subsequent holder, or affiliate, to or for the credit or the account of the
Borrower or such Guarantor, whether or not matured, against and on account of
the Post-Petition Obligations of the Borrower or such Guarantor to that Lender,
L/C Issuer, or subsequent holder under the Loan Documents, including, but
not limited to, all claims of any nature or description arising out of or
connected with the Loan Documents, irrespective of whether or not (a) that
Lender, L/C Issuer, or subsequent holder shall have made any demand
hereunder or (b) the principal of or the interest on the Loans and other
amounts due hereunder

           

          
            
              
              

            

            
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          shall
have become due and payable pursuant to Section 9 and although said
obligations and liabilities, or any of them, may be contingent or
unmatured.

           

              Section
12.17   Entire
Agreement.  The Loan Documents constitute the entire
understanding of the parties thereto with respect to the subject matter thereof
and any prior agreements, whether written or oral, with respect thereto are
superseded hereby.

           

              Section
12.18   Governing
Law.  This Agreement and the other Loan Documents (except as
otherwise specified therein), 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 as otherwise governed by the Bankruptcy
Code.

           

              Section
12.19   Severability of
Provisions.  Any provision of any Loan Document which is
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such unenforceability without invalidating the remaining
provisions hereof or affecting the validity or enforceability of such provision
in any other jurisdiction.  All rights, remedies and powers provided
in this Agreement and the other Loan Documents may be exercised only to the
extent that the exercise thereof does not violate any applicable mandatory
provisions of law, and all the provisions of this Agreement and other Loan
Documents are intended to be subject to all applicable mandatory provisions of
law which may be controlling and to be limited to the extent necessary so that
they will not render this Agreement or the other Loan Documents invalid or
unenforceable.

           

              Section
12.20   Excess
Interest.  Notwithstanding any provision to the contrary
contained herein or in any other Loan Document, no such provision shall require
the payment or permit the collection of any amount of interest in excess of the
maximum amount of interest permitted by applicable law to be charged for the use
or detention, or the forbearance in the collection, of all or any portion of the
Loans or other obligations outstanding under this Agreement or any other Loan
Document (“Excess
Interest”).  If any Excess Interest is provided for, or is
adjudicated to be provided for, herein or in any other Loan Document, then in
such event (a) the provisions of this Section shall govern and
control, (b) neither the Borrower nor any Guarantor or endorser shall be
obligated to pay any Excess Interest, (c) any Excess Interest that the DIP
Agent or any Lender may have received hereunder shall, at the option of the DIP
Agent, be (i) applied as a credit against the then outstanding principal
amount of Post-Petition Obligations hereunder and accrued and unpaid interest
thereon (not to exceed the maximum amount permitted by applicable law),
(ii) refunded to the Borrower, or (iii) any combination of the
foregoing, (d) the interest rate payable hereunder or under any other Loan
Document shall be automatically subject to reduction to the maximum lawful
contract rate allowed under applicable usury laws (the “Maximum Rate”), and this
Agreement and the other Loan Documents shall be deemed to have been, and shall
be, reformed and modified to reflect such reduction in the relevant interest
rate, and (e) neither the Borrower nor any Guarantor or endorser shall have
any action against the DIP Agent or any Lender for any damages whatsoever
arising out of the payment or collection of any Excess
Interest.  Notwithstanding the foregoing, if for any period of time
interest on any of Borrower’s Post-Petition Obligations is calculated at the
Maximum Rate rather than the applicable rate under this Agreement, and
thereafter such applicable rate becomes less than the Maximum Rate, the rate of
interest payable on the Borrower’s Post-Petition Obligations shall remain at the
Maximum 

           

          
            
              
              

            

            
              -94-

              
                

              

            

            
              
              

            

          

           

          Rate
until the Lenders have received the amount of interest which such Lenders would
have received during such period on the Borrower’s Post-Petition Obligations had
the rate of interest not been limited to the Maximum Rate during such
period.

           

              Section
12.21   Construction.  The
parties acknowledge and agree that the Loan Documents shall not be construed
more favorably in favor of any party hereto based upon which party drafted the
same, it being acknowledged that all parties hereto contributed substantially to
the negotiation of the Loan Documents.  The provisions of this
Agreement relating to Subsidiaries shall only apply during such times as the
Borrower has one or more Subsidiaries.  Nothing contained herein shall
be deemed or construed to permit any act or omission which is prohibited by the
terms of any Collateral Document, the covenants and agreements contained herein
being in addition to and not in substitution for the covenants and agreements
contained in the Collateral Documents. In the event any provision of any
Collateral Document conflicts with the terms of this Agreement the terms of this
Agreement shall control.

           

              Section
12.22   Lender’s and L/C Issuer’s
Obligations Several.  The obligations of the Lenders and
L/C Issuer hereunder are several and not joint.  Nothing
contained in this Agreement and no action taken by the Lenders or
L/C Issuer pursuant hereto shall be deemed to constitute the Lenders and
L/C Issuer a partnership, association, joint venture or other
entity.

           

              Section
12.23   Submission to Jurisdiction; Waiver
of Jury Trial.  Except as required by the Bankruptcy Code, the
Borrower and the Guarantors hereby submit to the nonexclusive jurisdiction of
the United States District Court for the Northern District of Illinois and of
any Illinois State court sitting in the City of Chicago for purposes of all
legal proceedings arising out of or relating to this Agreement, the other Loan
Documents or the transactions contemplated hereby or thereby.  The
Borrower and the Guarantors irrevocably waive, to the fullest extent permitted
by law, any objection which they may now or hereafter have to the laying of the
venue of any such proceeding brought in such a court and any claim that any such
proceeding brought in such a court has been brought in an inconvenient
forum.  The Borrower, the Guarantors, the DIP Agent, the
L/C Issuer and the Lenders hereby irrevocably waive any and all right to
trial by jury in any legal proceeding arising out of or relating to any Loan
Document or the transactions contemplated thereby.

           

              Section
12.24   USA
Patriot Act.  Each Lender and L/C Issuer that is subject
to the requirements of the USA Patriot Act (Title III of Pub. L. 107-56 (signed
into law October 26, 2001)) (the “Act”) hereby notifies the
Borrower that pursuant to the requirements of the Act, it is required to obtain,
verify, and record information that identifies the Borrower, which information
includes the name and address of the Borrower and other information that will
allow such Lender or L/C Issuer to identify the Borrower in accordance with
the Act.

           

              Section
12.25   No
Modification; No Discharge; Survival of Claims.  This
Agreement, the credit extended hereunder and the Loan Documents shall not be
modified, altered or affected in any manner by any plan of reorganization or any
order of confirmation for any Debtor of any other financing or extensions or
incurring of indebtedness by any Debtor pursuant to Section 364(c) of the
Bankruptcy Code.  Without limiting the generality of the foregoing,
each of 

           

          
            
              
              

            

            
              -95-

              
                

              

            

            
              
              

            

          

           

          the
Borrower and the Guarantors agrees that (i) its obligations hereunder shall
not be discharged by the entry of an order confirming a plan of reorganization
(and each of the Borrower and the Guarantors, pursuant to
Section 1141(d)(4) of the Bankruptcy Code, hereby waives any such
discharge) and (ii) the Superpriority Claim granted to the DIP Agent and
the Lenders pursuant to the Financing Order and described in Section 6.21
hereof and the Lien granted to the DIP Agent pursuant to this Agreement and the
Financing Order and described in Section 4.1 hereof shall not be affected
in any manner by the entry of an order confirming a plan of
reorganization.

           

              Section
12.26   Pre-Petition BMO Loan
Documents.  Subject to the provisions of the Bankruptcy Code,
the Pre-Petition BMO Loan Documents shall remain in full force and effect, and
the execution of this Agreement by the DIP Agent and the Lenders, and the
execution of the other Loan Documents by those of the Debtors party thereto, and
the delivery to and acceptance thereof by the DIP Agent and the Lenders, do not
and shall not constitute a waiver of any provision of the Pre-Petition BMO Loan
Documents.

           

              Section
12.27   Bankruptcy Code
Waivers.  In consideration of the credit extended hereunder, to
the extent not irreconcilably inconsistent with the provisions hereof or the
Financing Order, the Borrower and each Guarantor hereby agrees not to assert and
affirmatively waives any claim it otherwise might have under
Sections 506(c) and 553(b) of the Bankruptcy Code.

           

              Section
12.28   Validation of
Liens.  As provided in the Financing Order, the Borrower and
each Guarantor approves and confirms the Pre-Petition BMO Collateral, and
acknowledges and agrees that the Pre-Petition BMO Agent and the Pre-Petition BMO
Lenders each hold valid and enforceable, nonavoidable, perfected and senior
Liens in and to the collateral more particularly set forth in the Pre-Petition
BMO Security Documents and as summarized in the Interim Financing
Order.

           

              Section
12.29   Confidentiality.  Each
of the DIP Agent, the Lenders, and the L/C Issuer severally agrees to
maintain the confidentiality of the Information (as defined below), except that
Information may be disclosed (a) to its and its Affiliates’ directors,
officers, employees and agents, including accountants, legal counsel and other
advisors to the extent any such Person has a need to know such Information (it
being understood that the Persons to whom such disclosure is made will first be
informed of the confidential nature of such Information and instructed to keep
such Information confidential in accordance with the terms hereof), provided,
that in any event, it shall be responsible for any breach of this undertaking by
any of its and its Affiliates’ directors, officers, employees and agents,
including accountants, legal counsel and other advisors, (b) to any other
party hereto, (c) upon the order of any court or administrative agency, (d)
upon the request or demand of any regulatory agency or authority (or as
otherwise required by law or regulation), (e) which has been publicly disclosed
other than as a result of a disclosure by the undersigned or its representatives
or affiliates in breach of this undertaking, (f) in connection with any
litigation to which the DIP Agent, the L/C Issuer or any Lender or their
respective Affiliates may be a party to the extent reasonably required, (g) to
the extent reasonably required in connection with the exercise of any remedy
under the Loan Documents, (h) to any actual or proposed participant or assignee
of all or part of its rights under the Loan Documents, subject to an agreement
containing provisions substantially the same as those of this Section, and
(i) with 

           

          
            
              
              

            

            
              -96-

              
                

              

            

            
              
              

            

          

           

          the prior
written consent of the Borrower.  For purposes of this Section, “Information” means all
information received from the Borrower or any of the Subsidiaries or from any
other Person on behalf of the Borrower or any Subsidiary relating to the
Borrower or any Subsidiary or any of their respective businesses, other than
(i) information that was already known to or in possession of the receiving
party or any of its representatives or Affiliates prior to its disclosure to the
receiving party by the Borrower, any of its Subsidiaries or their respective
representatives or advisors whether in connection with this Agreement or any
other agreement, (ii) information that is obtained by the receiving party
or any of its representatives or Affiliates from a third party who is not known
by the receiving party to be prohibited from disclosing the information to the
receiving party by a contractual, legal or fiduciary obligation to the Borrower
or any of its Subsidiaries; (iii) information that is or becomes publicly
available (other than as a result of disclosure by the receiving party or any of
its representatives or Affiliates in violation of this Section); or
(iv) information that is independently developed, discovered or arrived at
by the receiving party or any of its representatives or Affiliates without any
reference to the Information.  The obligations of each party contained
in this Section 12.29 shall continue for a period of 3 years after such
party ceases to be a party to this Agreement.

           

              Section
12.30   Disclosure.  Each
of the DIP Agent, the L/C Issuer and each Lender may discuss the Borrower’s
business and financial condition of the Borrower and its Subsidiaries with the
Debtors and with any official committee of creditors, any unofficial
representative of unsecured creditors (provided that as to any confidential
matter or Information covered by a confidentiality agreement between the
Borrower and a Lender (including Section 12.29 of this Agreement) such
unofficial representative shall have entered into a confidentiality agreement
that is reasonably acceptable in form and substance to the Borrower and the
Guarantors), the Lenders, the Pre-Petition BMO Lenders, the Pre-Petition BMO
Agent, the Pre-Petition CoBank Lenders, the Pre-Petition CoBank Agent, and
prospective participants in the Pre-Petition BMO Credits or the Pre-Petition
CoBank Credits, provided that any such participant or potential participant has
executed a confidentiality agreement containing provisions substantially the
same as those of Section 12.29 and otherwise reasonably acceptable to the
Debtors and the DIP Agent, the Pre-Petition BMO Agent and the Pre-Petition
CoBank Agent, as appropriate.

           

              Section 12.31  
Amendment and
Restatement.  This Agreement amends and restates the Original
DIP Credit Agreement and is not intended to be or operate as a novation or an
accord and satisfaction of the Original DIP Credit Agreement or the obligations
of the Debtors evidenced or provided for thereunder.  Without limiting
the generality of the foregoing, each Debtor agrees that notwithstanding the
execution and delivery of this Agreement, the Liens previously granted to the
DIP Agent pursuant to the Original DIP Credit Agreement and the Interim
Financing Order shall be and remain in full force and effect and that any rights
and remedies of the DIP Agent and the Lenders thereunder and obligations of each
Debtor thereunder shall be and remain in full force and effect, shall not be
affected, impaired or discharged thereby and shall secure all of the Debtors’
Post-Petition Obligations to the DIP Agent and the Lenders under the Original
DIP Credit Agreement as amended and restated hereby.  Nothing herein
contained shall in any manner affect or impair the priority of the Liens created
and provided for by the Original DIP Credit Agreement and the Interim Financing
Order as to the indebtedness, obligations and liabilities that would be secured
thereby prior to giving effect hereto. 

           

          
            
              
              

            

            
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          [Signature
Pages to Follow]

           

          
            
               

            

            
              -98-

              
                

              

            

            
               

            

          

          

           

          This
Amended and Restated Post-Petition Credit Agreement is entered into between us
for the uses and purposes hereinabove set forth as of the date first above
written.

           

          
            	
                     
      

                  	
                    “Borrower”

                  

          

           

          
            	
                     
      

                  	
                    Pilgrim’s
      Pride Corporation, as debtor and
  debtor-in-possession

                  

          

           

          
            	
                     
      

                  	
                    By
      /s/ Richard A.
      Cogdill

                  

          

          
            	
                     
      

                  	
                    Its
      Chief Financial Officer, Secretary and
Treasurer

                  

          

           

          
            	
                     
      

                  	
                     “Guarantors”

                  

          

           

          
            	
                     
      

                  	
                    PFS
      Distribution Company, as debtor and
  debtor-in-possession

                  

          

           

          
            	
                     
      

                  	
                    By
      /s/ Richard A.
      Cogdill

                  

          

          
            	
                     
      

                  	
                    Its
      Chief Financial Officer, Secretary and
Treasurer

                  

          

           

          
            	
                     
      

                  	
                    PPC
      Transportation Company, as debtor and
  debtor-in-possession

                  

          

           

          
            	
                     
      

                  	
                    By
      /s/ Richard A.
      Cogdill

                  

          

          
            	
                     
      

                  	
                    Its
      Chief Financial Officer, Secretary and
Treasurer

                  

          

           

          
            	
                     
      

                  	
                    Pilgrim’s
      Pride Corporation of West Virginia, Inc., as debtor and
      debtor-in-possession

                  

          

           

          
            	
                     
      

                  	
                    By
      /s/ Richard A.
      Cogdill

                  

          

          
            	
                     
      

                  	
                    Its
      Chief Financial Officer, Secretary and
Treasurer

                  

          

           

          
            	
                     
      

                  	
                    PPC
      Marketing, Ltd., as debtor and
  debtor-in-possession

                  

          

           

          
            	
                     
      

                  	
                    By:
      Pilgrim's Pride Corporation,

                  

          

          
            	
                     
      

                  	
                     as
      General Partner

                  

          

           

          
            
              
              

            

            
              
              

              
                

              

            

            
              
              

            

          

          
            	
                     
      

                  	
                    By
      /s/ Richard A.
      Cogdill

                  

          

          
            	
                     
      

                  	
                    Its
      Chief Financial Officer, Secretary and
Treasurer

                  

          

           

          
            	
                     
      

                  	
                    To-Ricos,
      Ltd., as debtor and
debtor-in-possession

                  

          

           

          
            	
                     
      

                  	
                    By
      /s/ Richard A.
      Cogdill

                  

          

          
            	
                     
      

                  	
                    Its
      Chief Financial Officer, Secretary and
Treasurer

                  

          

           

          
            	
                     
      

                  	
                    To-Ricos
      Distribution, Ltd., as debtor and
  debtor-in-possession

                  

          

           

          
            	
                     
      

                  	
                    By
      /s/ Richard A.
      Cogdill

                  

          

          
            	
                     
      

                  	
                    Its
      Chief Financial Officer, Secretary and
Treasurer

                  

          

          
            
               

            

            
              -2-

              
                

              

            

            
               

            

          

           

          
            	
                     
      

                  	
                    “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
      Stratton

                  

          

          
            	
                     
      

                  	
                    Its
      Senior Vice President

                  

          

          

          
            
              
                 

              

               

            

            
              -3-

              
                

              

            

            
               

            

          

           

          
            	
                     
      

                  	
                    “Lenders”

                  

          

           

          
            	
                     
      

                  	
                    Cooperatieve
      Centrale Raiffeisen-Boerenleenbank B.A. “Rabobank
      Nederland” New York Branch

                  

          

           

          
            	
                     
      

                  	
                    By
      /s/ Richard J.
      Beard

                  

          

          
            	
                     
      

                  	
                    Its
      Executive Director

                  

          

           

          
            	
                     
      

                  	
                    By
      /s/ Rebecca O.
      Morrow

                  

          

          
            	
                     
      

                  	
                    Its
      Executive 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/ Peter
      Clinton

                  

          

          
            	
                     
      

                  	
                    Its
      Managing Director

                  

          

           

          
            	
                     
      

                  	
                    CALYON
      New York Branch

                  

          

           

          
            	
                     
      

                  	
                    By/Illegible/

                  

          

          
            	
                     
      

                  	
                    Its
      Managing Director

                  

          

           

          
            	
                     
      

                  	
                    By/s/ Alan
      Sidrane

                  

          

          
            	
                     
      

                  	
                    Its
      Managing Director

                  

          

           

          
            
              
              

            

            
              -4-

              
                

              

            

            
              
              

            

          

          
            	
                     
      

                  	
                    Natixis
      New York Branch

                  

          

           

          
            	
                     
      

                  	
                    By/s/ David
      Pershad

                  

          

          
            	
                     
      

                  	
                    Its
      Managing 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/s/ Wade
      Horton

                  

          

          
            	
                     
      

                  	
                    Its
      Vice President

                  

          

          

           

          
            
              
                 

              

               

            

            
              -5-

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00151-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00151-of-00352.parquet"}]]