Document:

ex10_2.htm

    
      
         

      

      
         

        
          

        

      

      
         

        
          EXHIBIT
10.2

        

      

    

    Pilgrim’s
Pride Corporation

    Limited
Duration Waiver Agreement

     

    This
Limited Duration Waiver Agreement (herein, the “Agreement”) is made as of
October 26, 2008, by and among Pilgrim’s Pride Corporation, a Delaware
corporation (the “Company”), To-Ricos, Ltd., a
Bermuda company (“To-Ricos”), To-Ricos
Distribution, Ltd., a Bermuda company (“To-Ricos Distribution”; and
together with To-Ricos, the “Foreign Borrowers”; the
Company and the Foreign Borrowers collectively, the “Borrowers” and individually,
a “Borrower”), the Banks party hereto,
and Bank of Montreal, a Canadian chartered bank acting through its Chicago
branch, as administrative agent for the Banks (the “Agent”).

     

    Recitals:

     

        A.The Banks
currently extend credit to the Borrowers on the terms and conditions set forth
in that certain Fourth Amended and Restated Secured Credit Agreement dated as of
February 8, 2007, as amended, by and among the Borrowers, the Banks, and
the Agent (the “Credit
Agreement”). 

     

        B.The Company
has informed the Banks that the Company was not in compliance with
Section 7.12 (Fixed Charge Coverage Ratio) of the Credit Agreement as of
September 27, 2008 and may not be in compliance with Section 7.8 (Leverage
Ratio) of the Credit Agreement as of September 27, 2008 (such instances of
noncompliance being hereinafter collectively referred to as the “Subject Default”).

     

        C.The Company
has requested that the Required Banks waive the Subject Default during the
period ending November 26, 2008, and the Required Banks are willing to do
so subject to the terms and conditions contained in this Agreement.

     

    Now,
Therefore, for good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, the parties hereto agree as follows:

     

    1.Incorporation of Recitals; Defined
Terms.  The Borrowers acknowledge that the Recitals set forth
above are true and correct in all material respects.  The defined
terms in the Recitals set forth above are hereby incorporated into this
Agreement by reference.  All other capitalized terms used herein
without definition shall have the same meanings herein as such terms have in the
Credit Agreement. 

     

    2.Amounts Owing.  The
Borrowers acknowledge and agree that the principal amount of Loans,
Reimbursement Obligations and L/Cs as of October 24, 2008, is $284,289,540
($0 in Bid Loans, $203,245,000  in Revolving Credit Loans, $0 in Swing
Loans, $0 in Bond Reimbursement Obligations, $25,239,727 in the Bond L/C, $0 in
Reimbursement Obligations, and $81,044,540 in issued and currently undrawn
L/Cs), and such amount (together with interest and fees thereon) is justly and
truly owing by the Borrowers without defense, offset or
counterclaim.  

     

          3.Limited Duration
Waiver.  Subject to the terms and conditions contained in this
Agreement, the Required Banks waive the Subject Default but only for the period
(the “Waiver Period”)
beginning October 28, 2008, and ending on November 26, 2008 (the “Scheduled Waiver Expiration
Date”).  The foregoing waiver shall become null and void on the
Scheduled Waiver Expiration Date and from and after the Scheduled Waiver
Expiration Date the Agent and the Banks shall have all rights and remedies
available to them as a result of the occurrence of the Subject Default as though
this waiver had never been granted.

     

            
4.Additional
Agreements.  The Borrower further agrees
that:  

     

        (a)The Agent
(or its counsel) and the Banks (or their special counsel) shall have the right
to engage jointly on behalf of the Banks a financial advisor, selected by the
Agent and acceptable to the Required Banks, to review, evaluate and advise the
Agent and the Banks as to the reports, analyses and cash flow forecasts and
other materials prepared by the Company’s financial consultants relating to the
financial condition, operating performance, and business prospects of the
Company and its Subsidiaries and to perform such other information gathering or
evaluation acts as may be reasonably requested by the Agent or the Required
Banks, and the reasonable costs and expenses of such financial advisor shall be
borne by the Company and constitute part of the Company’s obligations
outstanding under the Credit Agreement.  The Company 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 Company and its Subsidiaries as may
be reasonably requested and shall make the Company’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. 

     

        (b)The
Company shall provide to the Agent and the Banks a 13-week cash flow forecast
(the “Forecast”)
showing projected cash receipts and cash disbursements of the Company and its
Subsidiaries over the following 13-week period, together with a reconciliation
of actual cash receipts and cash disbursements of the Company and its
Subsidiaries from the prior week against the cash flow forecast previously
furnished to the Agent and the Banks and showing any deviations on a cumulative
basis), prepared by the Company and in form and substance, and with such detail,
as the Agent may request.  Each Forecast shall be provided to the
Agent and the Banks no later than 5:00 p.m., Central time, on Wednesday of each
week (beginning October 29, 2008).

     

        (c)The
Company shall engage a chief restructuring officer reasonably acceptable to the
Required Banks no later than the 10th Business Day after the date the Agent
provides the Company with a list of potential candidates that would be
acceptable to the Required Banks, but the Company shall have no obligation to
engage any of the potential candidates named on such list and may engage any
other person or firm that is reasonably acceptable to the Required
Banks.  The scope of the chief restructuring officer’s engagement and
the authority granted to such chief restructuring officer must be reasonably
satisfactory to the Required Banks.

     

        (d)No later
than October 31, 2008, the Company shall deliver to the Banks a budget for
the 90-day period ending January 31, 2009, in form and substance
satisfactory to the Agent and its financial advisor.

     

        (e)No later
than the 5th Business Day after the date the CoBank Intercreditor Agreement (as
defined below) is executed and delivered by the parties thereto, the Company
shall grant to the Agent for the benefit of the Banks valid, enforceable liens
and security interests on all of the collateral securing the CoBank Credit
Agreement (the “CoBank
Collateral”), including without limitation mortgages or deeds of trust on
all real property, buildings and improvements on which CoBank presently has or
hereafter obtains a mortgage or deed of trust (other than IRB Collateral (as
defined below)), subject to the liens and security interests granted to CoBank
in such property or permitted under the CoBank Credit Agreement and the Loan
Documents (as defined in the CoBank Credit Agreement).  In the case of
any CoBank Collateral that is subject or requires a consent or an approval by
any person in respect of any industrial revenue bonds, notes, debentures or
similar instruments issued by a governmental entity (the “IRB Collateral”), the
Company shall use its reasonable best efforts to, as soon as reasonably
practical, grant to the Agent for the benefit of the Banks valid, enforceable
liens and security interests on all of such IRB Collateral securing the CoBank
Credit Agreement, including without limitation mortgages or deeds of trust on
all real property, buildings and improvements on which CoBank presently has or
hereafter obtains a mortgage or deed of trust on such IRB Collateral, subject to
the liens and security interests granted to CoBank in such property or permitted
under the CoBank Credit Agreement and the Loan Documents (as defined in the
CoBank Credit Agreement).  The Company shall pay all taxes, costs, and
expenses incurred by the Agent in obtaining and perfecting such security
interests and shall supply to the Agent at the Company’s cost and expense such
board resolutions and other instruments, documents, certificates, and opinions
reasonably required by the Agent in connection therewith. 

     

        (f)During the
Waiver Period the Company shall obtain loans under the Credit Agreement and the
Amended and Restated Credit Agreement dated as of September 21, 2006, among
the Company, CoBank, ACB, as Administrative, Documentation and Collateral Agent
for the benefit of the present and future Syndication Parties and as a
Syndication Party, Lead Arranger and Book Manager thereunder (“CoBank”), 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, the “CoBank Credit Agreement”),
and shall repay loans under the Credit Agreement and the CoBank Credit
Agreement, only on a pro rata basis, determined on the basis of the undrawn
amount of the commitments under each of the two credit agreements at the close
of business in Chicago, Illinois, on September 24, 2008, as stated in Section
8(f) hereof, until the aggregate undrawn commitments under the Credit Agreement
and the CoBank Credit Agreement are $75,000,000.  Thereafter (i) the
Banks shall have no obligation to extend further credit to the Company under the
Credit Agreement until such time as the aggregate undrawn commitments under the
Credit Agreement and the CoBank Credit Agreement exceed $75,000,000 in which
case the Company may obtain and repay loans under the Credit Agreement and the
CoBank Credit Agreement only on a pro rata basis as described above until the
aggregate undrawn commitments under the Credit Agreement and the CoBank Credit
Agreement are $75,000,000, and (ii) at any time that until the aggregate undrawn
commitments under the Credit Agreement and the CoBank Credit Agreement are
$75,000,000 or less, the Company may obtain loans under the CoBank Credit
Agreement (such loans are referred to as “Additional Loans”) and may
repay Additional Loans without a concurrent repayment of loans under the Credit
Agreement until such time as the aggregate undrawn commitments under the Credit
Agreement and the CoBank Credit Agreement exceed $75,000,000 in which case the
Company may obtain and repay loans under the Credit Agreement and the CoBank
Credit Agreement only on a pro rata basis as described above until the aggregate
undrawn commitments under the Credit Agreement and the CoBank Credit Agreement
are $75,000,000.

     

        (g)The
Required Banks hereby consent to the granting by the Company to CoBank, as agent
under the CoBank Credit Agreement, of a security interest in all Collateral
granted to the Agent pursuant to the Third Amended and Restated Security
Agreement Re: Inventory and Farm Products dated as of October 13, 2008, provided that such security
interest shall be subject and subordinate to the Agent’s security interests
therein pursuant to an intercreditor agreement that provides, among other
things, that all of the subordinated liens and security interests granted by the
Company to the parties thereto may not be enforced without the approval of the
holder of the senior liens and security interests in the same property and that
shall otherwise be acceptable in form and substance to the Agent, between the
Agent and CoBank, as agent under the CoBank Credit Agreement (the “CoBank Intercreditor
Agreement”).

     

        (h)The
Company agrees that the amounts on deposit in all of its operating accounts
(including without limitation its accounts at Merrill Lynch) will not exceed at
any time the amount needed by the Company and its Subsidiaries for their
operating expenses and liquidity needs in the ordinary course of
business.

     

        (i)The
Company shall promptly provide any financial information concerning the Company
and its Subsidiaries and their respective businesses that the Agent or the
Required Banks may reasonably request.

     

        5.Waiver
Termination.  As used in this Agreement, “Waiver Termination” shall
mean the occurrence of the Scheduled Waiver Expiration Date, or, if earlier, the
occurrence of any one or more of the following events: (a) any Potential
Default or Event of Default under the Credit Agreement, in each case other than
the Subject Default; (b) any failure by the Company for any reason to
comply with any term, condition, or provision contained in this Agreement,
including without limitation the engagement of a chief restructuring officer as
required by Section 4(c) hereof, or in any document signed in connection
herewith; (c) any representation made by the Company in this Agreement or
pursuant to it proves to be incorrect or misleading in any material respect when
made; (d) the CoBank Limited Duration Waiver (as defined in
Section 13(b) hereof) 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 CoBank or any other
party to the CoBank Credit Agreement takes any action for the purpose of
terminating, repudiating or rescinding the CoBank Limited Duration Waiver or any
of its obligations thereunder; (e) the Fairway Limited Duration Waiver (as
defined in Section 13(c) hereof) 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 the
Securitization Agent (as defined below) or any other party to the Amended and
Restated Receivables Purchase Agreement dated as of September 26, 1998, among
Pilgrim’s Pride Funding Corporation, as Seller, the Company, as Servicer,
Fairway Finance Company, LLC, as Purchaser, the various purchasers and purchaser
agents from time to time party thereto and BMO Capital Markets Corp., as
Administrator (the “Securitization Agent”), as
amended, supplemented and otherwise modified (as so amended,
supplemented and otherwise modified, the “Receivables Purchase
Agreement”), takes any action for the purpose of terminating, repudiating
or rescinding the Fairway Limited Duration Waiver or any of its obligations
thereunder; (f) the CoBank Intercreditor Agreement, or any part thereof,
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 CoBank, as agent under the CoBank Credit
Agreement, or any other lender under the CoBank Credit Agreement, takes any
action for the purpose of terminating, repudiating or rescinding the CoBank
Credit Agreement or any of its obligations thereunder; or (g) the Company
shall pay any interest on its 8-3/8% Senior Subordinated Notes due 2017 or its
7-5/8% Senior Notes due May 1, 2015.  Upon the occurrence of a
Waiver Termination, the Waiver Period is automatically terminated and the Banks
are then permitted and entitled, with respect to the Subject Default and any
other Event of Default then in existence, under Sections 6.2, 8.2, 8.3, 8.4
and 8.5 of the Credit Agreement, among other things, to decline to provide
additional credit to the Borrowers, to permanently terminate the Revolving
Credit Commitments, to accelerate the Borrowers’ indebtedness, obligations and
liabilities under the Loan Documents, to require cash collateral for outstanding
L/Cs, and to exercise any other rights and remedies that may be available under
the Loan Documents or applicable law.

     

        6.Limited Waiver and Reservation of
Rights.  The Borrowers acknowledge and agree that immediately
upon expiration or termination of the Waiver Period, the Agent and the Banks
have all of their rights and remedies with respect to the Subject Default to the
same extent, and with the same force and effect, as if the waiver contained
herein had not been granted.  The Borrowers will not assert and hereby
forever waives any right to assert that the Agent or the Banks are obligated in
any way to continue to waive the Subject Default beyond the Waiver Period or to
forbear from enforcing their rights or remedies with respect to the Subject
Default after the Waiver Period or that the Agent and the Banks are not entitled
to act on the Subject Default after the occurrence of a Waiver Termination as if
such default had just occurred and the Waiver Period had never
existed.  The Borrowers acknowledge that the Banks have made no
representations as to what actions, if any, the Banks will take after the Waiver
Period or upon the occurrence of any Waiver Termination, Potential Default or
Event of Default, and the Banks and the Agent must and do hereby specifically
reserve any and all rights, remedies, and claims they have (after giving effect
hereto) with respect to the Subject Default and each other Potential Default or
Event of Default that may occur.  

     

        7.Acknowledgement of
Liens.  The Company hereby acknowledges and agrees that all
indebtedness, obligations and liabilities of the Borrowers, or any of them,
owing to the Agent and the Banks arising out of or in any manner relating to the
Loan Documents, as well as all Hedging Liability and Funds Transfer and Deposit
Account Liability, shall continue to be secured by liens and security interests
on all of the Collateral pursuant to the Loan Documents heretofore or hereafter
executed and delivered by the Company, and nothing herein
contained shall in any manner affect or impair the priority of the liens and
security interests created and provided for thereby as to the indebtedness,
obligations, and liabilities which would be secured thereby prior to giving
effect to this Agreement. 

     

        8.Representations and
Warranties.  The Borrowers represent and warrant to the Agent
and the Banks that:

     

        (a)each
Borrower has full right and authority to enter into this Agreement and to
perform all of its obligations hereunder, and the Company has full right and
authority to grant to the Agent the liens and security interests contemplated
hereby;

     

        (b)this
Agreement and the performance or observance by the Borrowers of any of the
matters and things herein or therein provided for do not (i) contravene or
constitute a default under any provision of law or any judgment, injunction,
order or decree binding upon any Borrower or any provision of the organizational
documents (e.g.,
certificate or articles of incorporation and by-laws) of any Borrower, or
(ii) contravene or constitute a default under any covenant, indenture or
agreement of or affecting any Borrower or any of its Property;

     

        (c)the
obligations of each Borrower and the Guarantor under this Agreement and each of
the Loan Documents executed and delivered by it are legal, valid, enforceable
(except as enforcement may be limited by equitable principles or by bankruptcy,
insolvency, reorganization, moratorium, or similar laws relating to or limiting
creditors’ rights generally) and subsisting and not subject to set-off, defense
(other than payment) or counterclaim;

     

        (d)no
Potential Default or Event of Default has occurred and is continuing, other than
the Subject Default; 

     

        (e)the
Company’s indebtedness, obligations and liabilities to the Agent and the Banks
under the Loan Documents constitute “Designated Senior indebtedness” as defined
in the First Supplemental Indenture dated as of January 24, 2007, between the
Company and Wells Fargo Bank, National Association, as Trustee, relating to the
Company’s 8-3/8% Senior Subordinated Notes due 2017; 

     

        (f)as of the
close of business in Chicago, Illinois on September 24, 2008, the undrawn amount
of all commitments under the CoBank Credit Agreement was $143,000,000 and the
undrawn amount of all Revolving Credit Commitments under the Credit Agreement
was $35,500,000; and

     

        (g)the
Company has decided that during the Waiver Period it will not pay any interest
on its 8-3/8% Senior Subordinated Notes due 2017 or its 7-5/8% Senior Notes due
May-1, 2015.

     

        9.Second Liens.  The
Required Banks hereby agree that (a) neither the Security Agreement nor
clauses (n) and (q) of Section 7.15 of the Credit Agreement shall prohibit the
liens on the Company’s assets described in Sections 4(e) and (g) of this
Agreement, so long as such liens are granted in compliance with the requirements
of said Sections 4(e) and (g), and (b) for purposes of Section 7.16(i) of
the Credit Agreement, the word “Collateral” shall be replaced by the phrase
“Collateral consisting of Inventory”.  

     

        10.Release.  For value
received, including without limitation, the agreements of the Banks in this
Agreement, each Borrower hereby releases the Agent and each Bank, its current
and former shareholders, directors, officers, agents, employees, attorneys,
consultants, and professional advisors (collectively, the “Released Parties”) of and
from any and all demands, actions, causes of action, suits, controversies, acts
and omissions, liabilities, and other claims of every kind or nature whatsoever,
both in law and in equity, known or unknown, which such Borrower has or ever had
against the Released Parties from the beginning of the world to this date
arising in any way out of the existing financing arrangements between the
Borrowers and the Banks, and each Borrower further acknowledges that, as of the
date hereof, it does not have any counterclaim, set-off, or defense against the
Released Parties, each of which each Borrower hereby expressly
waives.

     

        11.Loan Documents Remain
Effective.  Except as expressly set forth in this Agreement,
the Loan Documents and all of the obligations of the Borrowers thereunder, the
rights and benefits of the Agent and Banks thereunder, and the liens and
security interests created thereby remain in full force and
effect.  Without limiting the foregoing, each Borrower agrees to
comply with all of the terms, conditions, and provisions of the Loan Documents
except to the extent such compliance is irreconcilably inconsistent with the
express provisions of this Agreement.  This Agreement and the Loan
Documents are intended by the Banks as a final expression of their agreement and
are intended as a complete and exclusive statement of the terms and conditions
of that agreement.

     

        12.Fees and
Expenses.  The Company shall pay on demand all fees and
expenses (including attorneys’ fees) incurred by the Agent and its counsel,
special counsel to the Banks and counsel to each Bank in connection with this
Agreement and the other instruments and documents being executed and delivered
in connection herewith, and all fees and expenses of counsel to the Agent and
special counsel to the Banks with respect to the credit facilities subject to
the Credit Agreement.

     

        13.Conditions
Precedent.  The effectiveness of this Agreement is subject to
the satisfaction of the following conditions precedent:  

     

    (a)the
Borrowers, the Agent, and the Required Banks shall have executed and delivered
this Agreement, and the Guarantor shall have executed and delivered its
reaffirmation, acknowledgment, and consent in the space provided for that
purpose below, on  or before October 28, 2008;

     

    (b)the
Agent shall have received a copy of a fully executed limited duration waiver
from the lenders party to the CoBank Credit Agreement and CoBank, as agent for
such lenders, waiving any default under the CoBank Credit Agreement that is
analogous to the Subject Default for a period ending no earlier that the
Scheduled Waiver Expiration Date, which limited duration waiver shall not
contain any other terms or provisions that are not contained in this Agreement
or that are inconsistent with the terms of this Agreement or that are more
favorable to the lenders under the CoBank Credit Agreement than the terms of
this Agreement are favorable to the Banks, and which otherwise shall be in form
and substance reasonably satisfactory to the Agent (the “CoBank Limited Duration
Waiver”), provided that the CoBank
Limited Duration Waiver may (x) require the Company to grant mortgages and deeds
of trust to CoBank, as agent under the CoBank Credit Agreement, on real property
and buildings and improvements thereon that are currently unencumbered so long
as not later than the latter of: (i) the date the CoBank Intercreditor Agreement
is executed and delivered by the parties thereto or (ii) the date the Company
grants such mortgages and deeds of trust, the Company concurrently grants to the
Agent a second priority mortgage or deed of trust thereon, and such limited
duration waiver shall be effective, and (y) allow the Company to obtain
Additional Loans and require the Company to repay Additional Loans as described
in Section 4(f) above; 

     

    (c)the
Agent shall have received a copy of a fully executed limited duration waiver
from the lenders party to the Receivables Purchase Agreement and the
Securitization Agent, waiving any default under the Receivables Purchase
Agreement that is analogous to the Subject Default for a period ending no
earlier that the Scheduled Waiver Expiration Date, agreeing to extend the
existing amendments to the Amended and Restated Receivables Purchase Agreement
during the Waiver Period and agreeing to continue to provide credit thereunder
during the Waiver Period, which limited duration waiver shall not contain any
other terms or provisions that are not contained in this Agreement or that are
inconsistent with the terms of this Agreement or that are more favorable to the
lenders under the Receivables Purchase Agreement than the terms of this
Agreement are favorable to the Banks, and which otherwise shall be in form and
substance reasonably satisfactory to the Agent (the “Fairway Limited Duration
Waiver”) and such Fairway Limited Duration Waiver shall be effective;

     

    (d)the
payment of the current legal fees and expenses referred to in Section 12
above; and

     

    (e)payment
for the account of the Banks on a pro rata basis of a non-refundable waiver fee
in an amount equal to 0.10% of the Revolving Credit Commitments and the Bond
Letter of Credit.

     

        14.Authorization to Enter into
Collateral Documents and Intercreditor Agreement.  The Required
Banks hereby irrevocably authorize the Agent to execute and deliver
(a) such amendments (including an amendment and restatement) to the
Security Agreement or such security agreements, mortgages, deeds of trust and
other instruments as the Agent may deem appropriate to obtain the liens and
security interests contemplated by Section 4(f) of this Agreement
(collectively, the “Additional
Security Documents”), and (b) the CoBank Intercreditor Agreement on
behalf of each of the Banks and their Affiliates and the L/C Issuers and to
take such action and exercise such powers under the Additional Security
Documents and the CoBank Intercreditor Agreement as the Agent considers
appropriate, provided
the Agent shall not amend Additional Security Documents or the CoBank
Intercreditor Agreement unless such amendment is agreed to in writing by the
Required Lenders.  Each Bank and L/C Issuer acknowledges and
agrees that it will be bound by the terms and conditions of the CoBank
Intercreditor Agreement upon the execution and delivery thereof by the
Agent.  Except as otherwise specifically provided for herein, no Bank
(or its Affiliates) or L/C Issuer, other than the Agent, shall have the
right to institute any suit, action or proceeding in equity or at law for the
enforcement of any remedy under the Additional Security Documents or the CoBank
Intercreditor Agreement; it being understood and intended that no one or more of
the Banks (or their Affiliates) or L/C Issuer shall have any right in any
manner whatsoever to enforce any right thereunder, and that all proceedings at
law or in equity shall be instituted, had, and maintained by the Agent for the
benefit of the Banks, the L/C Issuers, and their Affiliates.  The
parties hereto hereby acknowledge and agree that each of the Additional Security
Documents and the CoBank Intercreditor Agreement shall constitute a Loan
Document for all purposes of the Credit Agreement and the other Loan
Documents.

     

        15.Miscellaneous.  By
its acceptance hereof, each Borrower hereby represents that it has the necessary
power and authority to execute, deliver, and perform the undertakings contained
herein, and that this Agreement constitutes the valid and binding obligation of
each Borrower enforceable against it in accordance with its
terms.  Any provision of this Agreement held invalid, illegal, or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such invalidity, illegality, or unenforceability without
affecting the validity, legality, and enforceability of the remaining provision
hereof; and the invalidity of a particular provision in a particular
jurisdiction shall not invalidate such provision in any other
jurisdiction.  The parties hereto hereby acknowledge and agree that
this Agreement shall constitute a Loan Document for all purposes of the Credit
Agreement and the other Loan Documents.  Unless otherwise expressly
stated herein, the provisions of this Agreement shall survive the termination of
the Waiver Period.  This Agreement may be executed in counterparts and
by different parties on separate counterpart signature pages, each of which
constitutes an original and all of which taken together constitute one and the
same instrument.  Delivery of executed counterparts of this Agreement
by telecopy shall be effective as an original.  This Agreement shall
be governed by Illinois law and shall be governed and interpreted on the same
basis as the Credit Agreement.

     

    [Signature
Pages to Follow]

    
      
        
          --

          

        

         

      

      
         

        
          

        

      

      
         

      

    

     

    This
Limited Duration Waiver Agreement is entered into as of the date and year first
above written.

     

    
      	
               
      

            	
              “Borrowers”

            

    

     

    
      	
               
      

            	
              Pilgrim’s
      Pride Corporation

            

    

     

    
      	
               
      

            	
              By

            

    

    
      	
               
      

            	
              Its
      Chief Financial Officer

            

    

     

    
      	
               
      

            	
              To-Ricos,
      Ltd.

            

    

     

    
      	
               
      

            	
              By

            

    

    
      	
               
      

            	
              Its
      Executive Vice President, Treasurer and Assistant
  Secretary

            

    

     

    
      	
               
      

            	
              To-Ricos
      Distribution, Ltd.

            

    

     

    
      	
               
      

            	
              By

            

    

    
      	
               
      

            	
              Its
      Executive Vice President, Treasurer and Assistant
  Secretary

            

    

     

    Accepted
and agreed to.

     

    
      	
               
      

            	
              Bank
      of Montreal, as Agent

            

    

     

    
      	
               
      

            	
              By

            

    

    
      	
               
      

            	
              Its
      Vice President

            

    

     

    
      	
               
      

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

            

    

     

    
      	
               
      

            	
              By

            

    

    
      	
               
      

            	
              Its
      Vice President

            

    

     

    
      	
               
      

            	
              SunTrust
      Bank

            

    

     

    
      	
               
      

            	
              By

            

    

    
      	
               
      

            	
              Its
      Vice President

            

    

     

    
      	
               
      

            	
              U.S.
      Bank National Association

            

    

     

    
      	
               
      

            	
              By

            

    

    
      	
               
      

            	
              Its
      Vice President

            

    

     

    
      	
               
      

            	
              Wells
      Fargo Bank National Association

            

    

     

    
      	
               
      

            	
              By

            

    

    
      	
               
      

            	
              Its
      Vice President

            

    

     

    
      	
               
      

            	
              ING
      Capital LLC

            

    

     

    
      	
               
      

            	
              By

            

    

    
      	
               
      

            	
              Its

            

    

     

    
      	
               
      

            	
              By

            

    

    
      	
               
      

            	
              Its

            

    

     

    
      	
               
      

            	
              Credit
      Suisse, Cayman Islands Branch

            

    

     

    
      	
               
      

            	
              By

            

    

    
      	
               
      

            	
              Its

            

    

     

    
      	
               
      

            	
              By

            

    

    
      	
               
      

            	
              Its

            

    

     

    
      	
               
      

            	
              Bank
      of America N.A.

            

    

     

    
      	
               
      

            	
              By

            

    

    
      	
               
      

            	
              Its

            

    

     

    
      	
               
      

            	
              CALYON
      New York Branch

            

    

     

    
      	
               
      

            	
              By

            

    

    
      	
               
      

            	
              Its

            

    

     

    
      	
               
      

            	
              By

            

    

    
      	
               
      

            	
              Its

            

    

     

    
      	
               
      

            	
              Natixis
      New York Branch

            

    

     

    
      	
               
      

            	
              By

            

    

    
      	
               
      

            	
              Its

            

    

     

    
      	
               
      

            	
              JP
      Morgan Chase Bank, N.A.

            

    

     

    
      	
               
      

            	
              By

            

    

    
      	
               
      

            	
              Its

            

    

     

    
      	
               
      

            	
              Deutsche
      Bank Trust Company Americas

            

    

     

    
      	
               
      

            	
              By

            

    

    
      	
               
      

            	
              Its

            

    

     

    
      	
               
      

            	
              By

            

    

    
      	
               
      

            	
              Its

            

    

     

    
      	
               
      

            	
              First
      National Bank of Omaha

            

    

     

    
      	
               
      

            	
              By

            

    

    
      	
               
      

            	
              Its

            

    

    
      
        
          --

          

        

         

      

      
         

        
          

        

      

      
         

      

    

    

     

    Reaffirmation,
Acknowledgement, and Consent of Guarantor

     

    The
undersigned, Pilgrim Interests, Ltd., a Texas limited partnership (the “Guarantor”), has executed
and delivered a Second Amended and Restated Guaranty Agreement dated as of
February 8, 2007 (the “Guaranty”) to the
Banks.  As an additional inducement to and in consideration of the
Banks’ acceptance of the Limited Duration Waiver Agreement dated as of
October 26, 2008 (the “Limited Duration Waiver”),
the Guarantor hereby agrees with the Banks as follows:

     

    1.The
Guarantor consents to the execution of the Limited Duration Waiver by the
Borrowers and acknowledges that this consent is not required under the terms of
the Guaranty and that the execution hereof by the Guarantor shall not be
construed to require the Banks to obtain the Guarantor’s consent to any future
amendment, modification or waiver of any term of the Credit Agreement except as
otherwise provided in said Guaranty.  The Guarantor hereby agrees that
the Guaranty shall apply to all indebtedness, obligations and liabilities of the
Borrowers to the Banks, the Agent and the L/C Issuers under the Credit
Agreement. The Guarantor further agrees that the Guaranty shall be and remain in
full force and effect.

     

    2.All
terms used herein shall have the same meaning as in the Limited Duration Waiver,
unless otherwise expressly defined herein.

     

    Dated as
of October 26, 2008.

    

     

    
      	
               
      

            	
              Pilgrim
      Interests, Ltd.

            

    

     

    
      	
               
      

            	
              By

            

    

    
      	
               
      

            	
              Lonnie
      A. Pilgrim, as trustee of the Lonnie A. Pilgrim 1998 Revocable Trust
      created by agreement dated September 9, 1998, as
    amended

            

    

    
      	
               
      

            	
              Its
      General Partner

            

    

     

    
      	
               
      

            	
              By

            

    

    
      	
               
      

            	
              Lonnie
      Ken Pilgrim

            

    

    
      	
               
      

            	
              Its
      General Partner

            

    

     

    
      	
               
      

            	
              Who
      Represent and Warrant that they have Authority to Bind the
      Partnership

            

    

    

    
      
        
          --ex10_3.htm

     

    
      
         

      

      
         

        
          

        

      

      
        
          EXHIBIT
10.3

          EXECUTION 
COPY

        

      

    

     

    Pilgrim’s Pride
Corporation

     

    Limited Duration Waiver
Agreement

     

    This Limited Duration Waiver Agreement (herein, the " Agreement ") is made as of October 26,
2008, by and among PILGRIM’S PRIDE CORPORATION, a Delaware corporation (the
" Servicer "), PILGRIM’S PRIDE FUNDING
CORPORATION, a Delaware limited liability company (the " Seller " and, together with
the Servicer, the " Seller
Parties "), the PURCHASERS AND PURCHASER AGENTS ON THE SIGNATURE PAGES
HERETO (collectively, the " Purchasers ")
and BMO CAPITAL MARKETS CORP., as administrator (in such capacity, together with
its successors and assigns, the " Administrator ").

     

    Recitals:

     

        A. Fairway and each other purchaser from time to time
party to the Receivables Purchase Agreement (as defined below) (collectively,
the " Purchasers "
and, together with the Administrator, the " Waiving
Parties ") currently purchase and make reinvestments of undivided
percentage ownership interests with regard to the Participation from the Seller
on the terms and conditions set forth in that certain Amended and Restated
Receivables Purchase Agreement dated as of September 26, 2008, by and among the
Servicer, the Seller, the Purchasers and the Administrator (as amended,
restated, supplemented or otherwise modified from time to time, the " Receivables
Purchase Agreement ").

     

        B. The Servicer has informed the Waiving Parties
that the Servicer was not in compliance with clause (v) of Exhibit IV to the
Receivables Purchase Agreement (Fixed Charge Coverage Ratio) as of
September 27, 2008 and expects that it will not be in compliance with
clause (t) of Exhibit IV to the Receivables Purchase Agreement (Leverage Ratio)
(each such instance of noncompliance being hereinafter referred to collectively
as the " Subject
Default "). 

     

        C.
The Seller Parties have requested that the Waiving Parties waive the Subject
Default during the period ending November 26, 2008, and the Waiving Parties are
willing to do so subject to the terms and conditions contained in this
Agreement.

     

    Now, Therefore, for good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:

     

        1. Incorporation of
Recitals; Defined Terms. The Seller Parties acknowledge that the Recitals
set forth above are true and correct in all material respects. The defined terms
in the Recitals set forth above are hereby incorporated into this Agreement by
reference. All other capitalized terms used herein without definition shall have
the same meanings herein as such terms have in the Receivables Purchase
Agreement. 

     

        2.
Amounts
Owing. The Seller Parties acknowledge and agree that there are amounts
outstanding, including Investment and Discount in respect of the Participation
and other amounts, that are payable by the Originator, the Seller or the
Servicer, as applicable, to the Purchasers and the Administrator (and any other
Indemnified Party and Affected Person under the Transaction Documents, as
applicable), and such amounts (together with interest and fees thereon) are
justly and truly owing by the Seller without defense, offset or counterclaim.

     

        3.
Limited
Duration Waiver. Subject to the terms and conditions contained in this
Agreement, the Waiving Parties waive the Subject Default but only for the period
(the "Waiver
Period") beginning October 28, 2008, and ending on November 26, 2008 (the
"Scheduled
Waiver Expiration Date"). The foregoing waiver shall become null and void
on the Scheduled Waiver Expiration Date and from and after the Scheduled Waiver
Expiration Date the Administrator and the Purchasers shall have all rights and
remedies available to them as a result of the occurrence of the Subject Default
as though this waiver had never been granted.

     

        4.
Additional
Agreements. The Seller Parties further agree that: 

     

            (a) The Administrator
(or its counsel) shall have the right to engage on behalf of the Purchasers a
financial advisor, selected by the Administrator and acceptable to the
Purchasers, to review, evaluate and advise the Administrator and the Purchasers
as to the reports, analyses and cash flow forecasts and other materials prepared
by the Seller’s and the Servicer’s financial consultants relating to the
financial condition, operating performance, and business prospects of the Seller
and the Servicer and their Subsidiaries and to perform such other information
gathering or evaluation acts as may be reasonably requested by the
Administrator, and the reasonable costs and expenses of such financial advisor
shall be borne by the Seller and constitute part of the Seller’s obligations
outstanding under the Receivables Purchase Agreement. Each of the Seller and the
Servicer 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 Seller and the Servicer and
their Subsidiaries as may be reasonably requested and shall make the Seller’s
and the Servicer’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.

     

            (b) The Seller (or
the Servicer on its behalf) shall provide to the Administrator and the
Purchasers a 13-week cash flow forecast (the " Forecast ")
showing projected cash receipts and cash disbursements of the Seller and the
Servicer and their Subsidiaries over the following 13-week period, together with
a reconciliation of actual cash receipts and cash disbursements of the Seller
and the Servicer and their Subsidiaries from the prior week against the cash
flow forecast previously furnished to the Administrator and the Purchasers and
showing any deviations on a cumulative basis), prepared by the Servicer and in
form and substance, and with such detail, as the Administrator may request. Each
Forecast shall be provided to the Administrator and the Purchasers no later than
5:00 p.m. Central time, on Wednesday of each week (beginning October 29,
2008).

     

            (c) [Intentionally
Omitted].

     

            (d) No later than
October 31, 2008, the Seller shall deliver to the Administrator and the
Purchasers a budget for the 90-day period ending January 31, 2009, in form and
substance satisfactory to the Administrator and the Purchasers and their
financial advisors.

     

            (e) No later than
October 28, 2008, the Seller and the Servicer shall permit the Administrator or
its administrators or representatives to begin to conduct an on-site audit in
accordance with clause (h) of Exhibit IV to the Receivables Purchase Agreement,
and each of the Seller Parties hereby agrees (i) that this clause (k)
constitutes reasonable notice of such audit as contemplated by the Receivables
Purchase Agreement and (ii) to pay on demand in immediately available funds all
fees and expenses in connection therewith.

     

            (f) No later than November 26, 2008,
with respect to any accounts or lock-boxes that are or were in the name of the
Seller but are not listed on  Schedule I 
hereto(such accounts and lock-boxes, collectively, the " Unscheduled
Accounts "), the Seller shall (i) (A) enter into lock-box agreements
in form and substance reasonably satisfactory to the Administrator and covering
such Unscheduled Accounts with the applicable lock-box banks, and deliver
original counterparts thereof to the Administrator and/or (B) instruct each
Obligor to make payments of all Receivables to a Lock-Box Account or lock-box
listed on Schedule
I hereto instead of to such Unscheduled Account or (ii) enter into
other arrangements covering such Unscheduled Accounts reasonably acceptable to
the Administrator; for the avoidance of doubt, the term "Lock-Box Account"
includes, without limitation, the Collection Account and the Liquidation
Account. A breach of this clause (e) shall constitute a Termination Event under
the Receivables Purchase Agreement.

     

        5.
Waiver
Termination. As used in this Agreement, "Waiver
Termination" shall mean the occurrence of the Scheduled Waiver Expiration
Date, or, if earlier, the occurrence of any one or more of the following events:
(a) any Unmatured Termination Event or Termination Event, in each case
other than the Subject Default; (b) any failure by the Seller or the
Servicer for any reason to comply with any term, condition, or provision
contained in this Agreement; (c) any representation made by the Seller or
the Servicer in this Agreement or pursuant to it proves to be incorrect or
misleading in any material respect when made; (d) the CoBank Limited
Duration Waiver (as defined in Section 13(b) hereof) 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 CoBank or any other party to the Amended and Restated Credit
Agreement dated as of September 21, 2006, among the Servicer, CoBank, ACB, as
Administrative, Documentation and Collateral Agent for the benefit of the
present and future Syndication Parties and as a Syndication Party, Lead Arranger
and Book Manager thereunder (" Co-Bank "),
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, the " CoBank
Credit Agreement ") takes any
action for the purpose of terminating, repudiating or rescinding the CoBank
Limited Duration Waiver or any of its obligations thereunder; (e) the
Credit Agreement Limited Duration Waiver (as defined in Section 13(c)
hereof) 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 the Credit Agent (as defined
below) or any other party to the Fourth Amended and Restated Secured Credit
Agreement dated as of February 8, 2007, among Seller, as a borrower, To-Ricos,
Ltd., To-Ricos Distribution, Ltd., the various banks party thereto and Bank of
Montreal, as agent (the " Credit
Agent "), as
amended, supplemented and otherwise modified (as so
amended, supplemented and otherwise modified, the " Credit
Agreement "), takes
any action for the purpose of terminating, repudiating or rescinding the Credit
Agreement Limited Duration Waiver or any of its obligations thereunder or (f)
the Servicer shall pay any interest on its 8-3/8% Senior Subordinated Notes due
2017 (as defined in the 2007 Senior Subordinated Indenture (as defined in the
Credit Agreement)) or its 7-5/8% Senior Notes due May 1, 2015 (as defined in the
2007 Senior Indenture (as defined in the Credit Agreement)) (such interest
payments under this clause (f), collectively, the " Indenture
Interest Payments "). Upon the occurrence of a Waiver Termination, the
Waiver Period is automatically terminated and the Administrator and the
Purchasers are then permitted and entitled, with respect to the Subject Default
and any other Termination Event then in existence, under the Receivables
Purchase Agreement, including without limitation Section 4.4 thereof, among
other things, to do all things necessary or desirable, in the determination of
the Administrator, to collect any and all amounts or portions thereof due under
any and all Pool Receivables or Related Security, including, without limitation,
endorsing the name of the Seller on checks and other instruments representing
Collections and enforcing such Pool Receivables, Related Security and the
related Contracts, to cease making purchases and reinvestments, to permanently
terminate the commitments thereunder, to accelerate the Seller’s indebtedness,
obligations and liabilities under the Transaction Documents, and to exercise any
other rights and remedies that may be available under the Transaction Documents
or applicable law.

     

        6. Limited Waiver and
Reservation of Rights. The Seller Parties acknowledge and agree that
immediately upon expiration or termination of the Waiver Period, the
Administrator and the Purchasers have all of their rights and remedies with
respect to the Subject Default to the same extent, and with the same force and
effect, as if the waiver contained herein had not been granted. The Seller
Parties will not assert and hereby forever waives any right to assert that the
Administrator or the Purchasers are obligated in any way to continue to waive
the Subject Default beyond the Waiver Period or to forbear from enforcing their
rights or remedies with respect to the Subject Default after the Waiver Period
or that the Administrator and the Purchasers are not entitled to act on the
Subject Default after the occurrence of a Waiver Termination as if such default
had just occurred and the Waiver Period had never existed. The Seller Parties
acknowledge that none of the Administrator or the Purchasers have made any
representations as to what actions, if any, such party will take after the
Waiver Period or upon the occurrence of any Waiver Termination, Unmatured
Termination Event or Termination Event, and the Purchasers and the Administrator
must and do hereby specifically reserve any and all rights, remedies, and claims
they have (after giving effect hereto) with respect to the Subject Default and
each other default or Termination Event that may occur. 

     

        7.
Acknowledgement of
Liens. The Seller Parties hereby acknowledge and agree that all
indebtedness, obligations and liabilities of the Seller owing to the
Administrator and the Purchasers arising out of or in any manner relating to the
Transaction Documents shall continue to be secured by liens and security
interests on all of the Receivables, Contracts and Related Security and all
other collateral pursuant to the Transaction Documents heretofore or hereafter
executed and delivered by the Seller or the Servicer, and nothing
herein contained shall in any manner affect or impair the priority of the liens
and security interests created and provided for thereby as to the indebtedness,
obligations, and liabilities which would be secured thereby prior to giving
effect to this Agreement. 

     

        8.
Representations and
Warranties. Each of the Seller Parties represents and warrants to the
Administrator and the Purchasers that:

     

         (a) each
Seller Party has full right and authority to enter into this Agreement and to
perform all of its obligations hereunder; 

     

            (b) this Agreement and the
performance or observance by the Seller Parties of any of the matters and things
herein or therein provided for do not (i) contravene or constitute a
default under any provision of law or any judgment, injunction, order or decree
binding upon any Seller Party or any provision of the organizational documents
(e.g.,
certificate or articles of incorporation and by-laws) of any Seller Party, or
(ii) contravene or constitute a default under any covenant, indenture or
agreement of or affecting any Seller Party or any of its Property;

     

              
(c) the obligations of each Seller Party under this Agreement and each of the
Transaction Documents executed and delivered by it are legal, valid, enforceable
(except as enforcement may be limited by equitable principles or by bankruptcy,
insolvency, reorganization, moratorium, or similar laws relating to or limiting
creditors’ rights generally) and subsisting and not subject to set-off, defense
(other than payment) or counterclaim; 

     

              
(d) no Unmatured Termination Event or Termination Event (other than the Subject
Default) has occurred and is continuing; 

     

              
(e) as of the close of business in Chicago, Illinois on September 24, 2008, the
undrawn amount of all commitments under the CoBank Credit Agreement was
$143,000,000 and the undrawn amount of all revolving credit commitments under
the Credit Agreement was $35,500,000;

     

                    
(f) the Servicer has decided that during the Waiver Period it will not make the
Indenture Interest Payments; and

     

                    (g)
Each Seller Party represents and warrants that (i) each of the Lock-Box Accounts
and lock-boxes set forth on Schedule I hereto is subject to a Lock-Box
Agreement, (ii) the Lock-Box Accounts and lock-boxes set forth on Schedule I
hereto cover all of the accounts and lock-boxes into which Obligors are
instructed to deposit Collections and any other amounts related to Receivables
and (iii) all Obligors have been instructed to make payments of all Receivables
(A) only to one or more of the Lock-Box Accounts or lock-boxes set forth on
Schedule I hereto or (B) solely with respect to any Unscheduled Accounts, as
otherwise reasonably acceptable to the Administrator.

     

        9.
Amendments
and agreements. 

     

            (a)
 Exhibit
I to the Receivables Purchase Agreement is hereby amended by adding
the following new definition thereto in the appropriate alphabetical
order:

     

    " October
PPC Limited Duration Waiver Agreement " means the Pilgrim’s Pride
Corporation Limited Duration Waiver Agreement, dated as of October 26, 2008,
among Pilgrim’s Pride Corporation, Pilgrim’s Pride Funding Corporation, the
various purchasers and purchaser agents party thereto and BMO Capital Markets
Corp.

     

            (b)
The definition of "Waiver Period" set forth in  Exhibit
 I to the Receivables Purchase Agreement is hereby amended and
restated in its entirety as follow:

     

                 
" Waiver
Period " means the period beginning on September 26, 2008 and ending
on the earliest of (a) the date of the Waiver Termination (as defined in the PPC
Limited Duration Waiver Agreement) if such Waiver Termination is not the result
of the Scheduled Waiver Expiration Date (as defined in the PPC Limited Duration
Waiver Agreement), (b) the Scheduled Waiver Expiration Date (as defined in the
October PPC Limited Duration Waiver Agreement) and (c) the date of the Waiver
Termination (as defined in the October PPC Limited Duration Waiver
Agreement).

     

            (c)
Based solely on the Seller Parties’ representations and warranties set forth in
Section 8(g), and solely so long as such representations and warranties continue
to be true and correct, the Administrator and the Purchasers acknowledge and
agree that they do not presently intend to direct Obligors to redirect funds
during the Waiver Period;  provided ,
that such acknowledgment is not in limitation of, and the Administrator and the
Purchasers specifically reserve, the right to exercise any and all enforcement
rights and remedies under the Transaction Documents, including, without
limitation, Section 4.4 of the Receivables Purchase
Agreement.

     

            (d)
The Administrator and the Purchasers acknowledge and agree that the Seller
Parties’ election not to make the Indenture Interest Payments during the Waiver
Period shall not, during the Waiver Period, constitute a Termination Event under
clause (e) of the Exhibit V to the Receivables Purchase Agreement. 

     

            (e) On or before 5:00
pm Chicago time on October 27, 2008, the Seller shall:

     

                (i) pay to the
Administrator in immediately available funds of (x) an upfront fee equal to the
product of (i) 0.10%  multiplied
by (ii) the Purchase Limit
and (y) out-of-pocket expenses in an amount equal to $20,000;
and

     

                (ii) pay to Mayer
Brown LLP, counsel to the Administrator and the Purchasers, in immediately
available funds (x) $174,293.79 in outstanding legal fees and (y) any other
current legal fees and expenses referred to in Section 12
below.

     

        10.
Release. For
value received, including without limitation, the agreements of the
Administrator and the Purchasers in this Agreement, each Seller Party hereby
releases the Administrator, each Purchaser, each Indemnified Party and their
respective current and former shareholders, directors, officers, agents,
employees, attorneys, consultants, and professional advisors (collectively, the
"Released
Parties") of and from any and all demands, actions, causes of action,
suits, controversies, acts and omissions, liabilities, and other claims of every
kind or nature whatsoever, both in law and in equity, known or unknown, which
such Seller Party has or ever had against the Released Parties from the
beginning of the world to this date arising in any way out of the existing
financing arrangements between the Seller Parties, the Administrator and the
Purchasers, and each Seller Party further acknowledges that, as of the date
hereof, it does not have any counterclaim, set-off, or defense against the
Released Parties, each of which each Seller Party hereby expressly
waives.

     

        11.
Transaction
Documents Remain Effective. Except as expressly set forth in this
Agreement, the Transaction Documents and all of the obligations of the Seller
Parties thereunder, the rights and benefits of the Administrator and Purchasers
thereunder, and the liens and security interests created thereby remain in full
force and effect. Without limiting the foregoing, each Seller Party agrees to
comply with all of the terms, conditions, and provisions of the Transaction
Documents except to the extent such compliance is irreconcilably inconsistent
with the express provisions of this Agreement. This Agreement and the
Transaction Documents are intended by the Administrator and the Purchasers as a
final expression of their agreement and are intended as a complete and exclusive
statement of the terms and conditions of that agreement.

     

        12.
Fees and
Expenses. The Seller and the Servicer shall pay on demand all fees and
expenses (including attorneys’ fees) incurred by the Administrator and its
counsel in connection with this Agreement and the other instruments and
documents being executed and delivered in connection herewith, and all fees and
expenses of counsel to the Administrator with respect to the securitization
facility subject to the Receivables Purchase Agreement.

     

        13.
Conditions
Precedent. The effectiveness of this Agreement is subject to the
satisfaction of the following conditions precedent: 

     

            (a) the Seller
Parties, the Administrator, and the Purchasers shall have executed and delivered
this Agreement on or before October 28, 2008;

     

            (b) the Administrator
shall have received a copy of a fully executed limited duration waiver from the
lenders party to the CoBank Credit Agreement and CoBank, as agent for such
lenders, waiving any default under the CoBank Credit Agreement that is analogous
to the Subject Default for a period ending no earlier that the Scheduled Waiver
Expiration Date, which limited duration waiver shall not contain any terms or
provisions that are not contained in this Agreement materially adverse to the
Administrator and the Purchasers or that are, in any material respect, more
favorable to the lenders under the CoBank Credit Agreement than the terms of
this Agreement are favorable to the Administrator and the Purchasers, and which
otherwise shall be in form and substance reasonably satisfactory to the
Administrator (the " CoBank
Limited Duration Waiver "), provided
that the CoBank Limited Duration Waiver may require the Servicer to grant
mortgages and deeds of trust to CoBank, as agent under the CoBank Credit
Agreement, on real property and buildings and improvements thereon that are
currently unencumbered, and such limited duration waiver shall be effective;
and

     

            (c) the Administrator
shall have received a copy of a fully executed limited duration waiver from the
lenders party to the Credit Agreement and the Credit Agent, waiving any default
under the Credit Agreement that is analogous to the Subject Default for a period
ending no earlier that the Scheduled Waiver Expiration Date, which limited
duration waiver shall not contain any terms or provisions that are not contained
in this Agreement materially adverse to the Administrator and the Purchasers or
that are, in any material respect, more favorable to the lenders under the
Credit Agreement than the terms of this Agreement are favorable to the
Administrator and the Purchasers, and which otherwise shall be in form and
substance reasonably satisfactory to the Administrator (the " Credit
Agreement Limited Duration Waiver "), and such limited duration waiver
shall be effective.

     

        14.
Miscellaneous.
By its acceptance hereof, each Seller Party hereby represents that it has the
necessary power and authority to execute, deliver, and perform the undertakings
contained herein, and that this Agreement constitutes the valid and binding
obligation of such Seller Party enforceable against it in accordance with its
terms. Any provision of this Agreement held invalid, illegal, or unenforceable
in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent
of such invalidity, illegality, or unenforceability without affecting the
validity, legality, and enforceability of the remaining provision hereof; and
the invalidity of a particular provision in a particular jurisdiction shall not
invalidate such provision in any other jurisdiction. The parties hereto hereby
acknowledge and agree that this Agreement shall constitute a Transaction
Document for all purposes of the Receivables Purchase Agreement and the other
Transaction Documents. Unless otherwise expressly stated herein, the provisions
of this Agreement shall survive the termination of the Waiver Period. This
Agreement may be executed in counterparts and by different parties on separate
counterpart signature pages, each of which constitutes an original and all of
which taken together constitute one and the same instrument. Delivery of
executed counterparts of this Agreement by telecopy shall be effective as an
original. This Agreement shall be governed by Texas law and shall be governed
and interpreted on the same basis as the Receivables Purchase
Agreement.

     

    [Signature Pages to Follow]

     

    This Limited Duration Waiver Agreement is entered into as of
the date and year first above written.

     

    Pilgrim’s Pride Corporation, as Servicer

     

    By 

     

    Name:

     

    Title:

     

    Pilgrim’s Pride Funding Corporation, as Seller

     

    By 

     

    Name:

     

    Title:

     

     

     

     

     

    Accepted and agreed to:

     

    BMO Capital Markets Corp., as Administrator

     

    By 

     

    Name:

     

    Title:

     

     

     

    BMO Capital Markets Corp., as Purchaser Agent

     

    By 

     

    Name:

     

    Title:

     

     

     

     

     

    Fairway Finance Company, LLC, as Uncommitted Purchaser and as
Related Committed Purchaser

     

    By 

     

    Name:

     

    Title:

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