SEVENTH AMENDMENT TO CREDIT AGREEMENT
EXHIBIT
10.1
SEVENTH
AMENDMENT TO CREDIT AGREEMENT
Parties:
“CoBank”: CoBank,
ACB
0000
Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxx
Xxxxxxx, Xxxxxxxx 00000
“Borrower”: Pilgrim’s
Pride Corporation
0000 XX
Xxxxxxx 000 X.
Xxxxxxxxx,
Xxxxx 00000
“Syndication
Parties”: Whose
signatures appear below
Execution
Date: March 10,
2008
Recitals:
A. CoBank
(in its capacity as the Administrative Agent (“Agent”), the Syndication
Parties signatory thereto, and Borrower have entered into that certain 2006
Amended and Restated Credit Agreement (Convertible Revolving Loan and Term Loan)
dated as of September 21, 2006, that certain First Amendment to Credit Agreement
dated as of December 13, 2006, that certain Second Amendment to Credit Agreement
dated as of January 4, 2007, that certain Third Amendment to Credit Agreement
dated as of February 7, 2007, that certain Fourth Amendment to Credit Agreement
dated as of July 3, 2007, that certain Fifth Amendment to Credit Agreement dated
as of August 7, 2007, and that certain Sixth Amendment to Credit Agreement dated
as of November 7, 2007 (as so amended and as amended, modified, or supplemented
from time to time in the future, the “Credit Agreement”) pursuant to
which the Syndication Parties, and any entity which becomes a Syndication Party
on or after September 21, 2006, have extended certain credit facilities to
Borrower under the terms and conditions set forth in the Credit
Agreement.
B. Borrower
has advised the Agent that it contemplates curtailing or ceasing production at
one or more facilities (each a “Closed Facility”) and removing
one or more of such Closed Facilities from the Collateral and the calculation of
the Available Amount and possibly adding a facility to the Collateral and the
calculation of the Available Amount.
C. Borrower
has requested that the Agent and the Syndication Parties modify the Credit
Agreement to (i) allow the Agent to effect the release of the Agent’s lien
against any such Closed Facility which is included in the Collateral and which
Borrower wants removed from the Collateral without the necessity of obtaining
the specific consent thereto by the Required Lenders, and (ii) provide relief to
Borrower from the accounting effects of curtailing or ceasing production at the
Closed Facilities, which the Agent and the Syndication Parties are willing to do
under the terms and conditions as set forth in this Seventh Amendment to Credit
Agreement (“Seventh
Amendment”).
Agreement:
Now,
therefore, in consideration of the mutual covenants and agreements herein
contained and other good and valuable consideration, the receipt and adequacy of
which are hereby acknowledged, the parties hereto hereby agree as
follows:
Amendments to Credit
Agreement. The Credit Agreement is amended as of the Effective
Date as follows:
Section
1.40 is amended to read as follows:
1.40 EBITDA: for
any period, for Borrower and its Consolidated Subsidiaries, net income for such
period, plus the sum of the amounts of (a) Interest Expense, plus
(b) federal and state income taxes, plus (c) depreciation and
amortization expenses, plus (d) Restructuring Charges and other
extraordinary losses, minus (e) extraordinary gains, in each case as
charged against (or added to, as the case may be) revenues to arrive at net
income for such period, all as determined by GAAP.
The
following new Section is added to Article 1:
1.144 Restructuring
Charges: means the following charges related to a Shut Down or
significant reconfiguration of a facility: asset impairment charges,
lease termination costs, severance costs, facility shutdown costs and other
related restructuring charges associated with a permanent reduction in capacity
or closure of plants or facilities cut-backs or plant closures.
Clauses
(b) and (c) of Section 10.18 are amended to read as follows:
(b) Upon
such time as Borrower, in addition to satisfying the requirements of clause (a)
of this Section 10.18, shall, with respect to any such parcel of Additional
Property, have provided to the Administrative Agent (i) a mortgagees’ title
insurance policy (Standard Texas Mortgagees Policy Form with respect to
Additional Property located in the State of Texas, and Standard ALTA form with
respect to Additional Property located in states other than Texas) from an
insurer acceptable to the Administrative Agent insuring the lien in favor of the
Administrative Agent, on behalf of the Syndication Parties, as a first priority
lien on each such parcel of Additional Property, subject only to Permitted
Encumbrances, and (A) in such amount as the Administrative Agent shall require,
(B) deleting the standard printed exceptions (including exceptions for mechanics
liens and exceptions based on lack of adequate survey) and the gap exception,
(C) containing only such exceptions to title as are reasonably acceptable to the
Administrative Agent, (D) providing access coverage, and (E) containing such
other endorsements as the Administrative Agent may reasonably require (but in
any event including a revolving credit endorsement), (ii) a survey, which
survey, the certifications thereon, and all information contained therein, shall
be acceptable to the Administrative Agent, and shall contain a legal description
and, except as specifically provided otherwise on Exhibit 10.18, shall,
at a minimum, show the location of all structures, visible utilities, fences,
xxxxxx, or walls on the parcel and within 5 feet of all boundaries thereof, any
conflicting boundary evidence or visible encroachments, and all easements,
underground utilities, and tunnels for which properly recorded evidence is
available; (iii) an Appraisal, and (iv) (A) a Phase I environmental report,
satisfactory in form and content to the Administrative Agent, and (B) such Phase
II environmental reports, or proof satisfactory to the Administrative Agent that
Borrower has taken such remedial or other action as the Administrative Agent may
reasonably require, in either case, based on the contents of such environmental
reports, then such Additional Property shall be a part of the Collateral and
shall be included in the Available Amount.
(c) Borrower
may include in the Available Amount any leasehold interest in connection with
any Additional Property where Borrower is a lessee under a recorded lease (1)
calling for a rental payment equal to or in excess of $100,000.00 per annum, or
(2) which has an Appraised Value, as demonstrated in the Appraisal required
pursuant to clause (v) below, of no less than $2,000,000.00, or (3) which is
described as follows: (A) that certain Lease by and between the City of
Natchitoches and X-X Poultry Packing Company, Ltd., dated June 24, 1977,
recorded June 28, 1977 in MOB 360, page 148 of the Records of Natchitoches
Parish, Louisiana, and (B) that certain Lease by and between the City of
Natchitoches and X-X Poultry Packing Company, Ltd., dated June 24, 1977 and
recorded June 29, 1977 in MOB 360, page 134 of the Records of Natchitoches
Parish, Louisiana; provided that, in each case described in clauses (1), (2),
and (3), Borrower provides to the Administrative Agent, (i) a leasehold mortgage
or deed of trust substantially in form and substance satisfactory to the
Administrative Agent, (ii) a Title Policy and a survey, satisfying the
requirements set forth in clause (b) of this Section 10.18 (modified as
necessary to reflect a leasehold, rather than fee, interest), (iii) (A) a Phase
I environmental report, satisfactory in form and content to the Administrative
Agent, and (B) such Phase II environmental reports, or proof satisfactory to the
Administrative Agent that Borrower has taken such remedial or other action as
the Administrative Agent may reasonably require, in either case, based on the
contents of such environmental reports, (iv) a lessor consent in form and
content satisfactory to the Administrative Agent and containing such estoppels
of the lessor of the leasehold estate as the Administrative Agent shall require;
and (v) an Appraisal.
Subsection
14.5.6 is amended to read as follows:
14.5.6
Release of Certain
Liens. To take such action and execute such documents as may
be reasonably necessary to release any liens on or security interests in any
Collateral where Borrower is entitled to such release in connection with (a)
Dispositions permitted pursuant to the provisions of Section 11.4(a), (b), and
(c)(i) hereof, without the need to obtain the consent of any of the Syndication
Parties or Voting Participants; (b) the replacement or removal of any Collateral
(other than in connection with a Shut Down pursuant to the terms of Section
10.15 hereof) where the book value of such Collateral is $5,000,000.00 or less,
without the need to obtain the consent of any of the Syndication Parties or
Voting Participants; (c) the removal of any facility from the Available Amount
Report (and therefore, from calculation of the Available Amount) arising from a
Shut Down pursuant to the provisions of Section 10.15 hereof, without the need
to obtain the consent of any of the Syndication Parties or Voting Participants;
(d) dispositions permitted pursuant to the provisions of Section 11.4(c)(ii)
hereof, with the consent of the Required Lenders; and (e) the Administrative
Agent’s receipt of a notice from Borrower that, pursuant to the provisions of
that certain letter agreement between Borrower and the Administrative Agent
dated August 30, 2007, Borrower has elected to withdraw from the calculation of
the Available Amount one or more of the Sites (as defined in such letter
agreement) as to which Borrower has been required to take Future Actions (as
defined in such letter agreement) pursuant to the provisions of such letter
agreement, provided that simultaneously with such release the Available Amount
for such Site shall be automatically reduced by the Appraised Value for such
Site as it was included in the latest Available Amount Report (or reduced as
otherwise provided in such letter agreement if such Site was not specifically
identified and included in the latest Available Amount Report), such release to
be made without the need to obtain the consent of any of the Syndication Parties
or Voting Participants.
Clause
(a) of Subsection 14.7.2 is amended to reads as follows:
(a) Consenting
to any action or amendment, or granting any waiver with respect to, either the
Revolving Loan or the Term Loan, not covered in Subsection 14.7.1 and except as
provided in Subsection 14.5.6(a), (b), (c) or (e) hereof; or
Conditions to Effectiveness of this
Seventh Amendment. The effectiveness of this Seventh Amendment
is subject to satisfaction, in the Administrative Agent’s sole discretion, of
each of the following conditions precedent (the date on which all such
conditions precedent are so satisfied shall be the “Effective Date”):
Delivery of Executed Loan
Documents. Borrower shall have delivered to the Administrative
Agent, for the benefit of, and for delivery to, the Administrative Agent and the
Syndication Parties, the following document, duly executed by
Borrower:
This
Seventh Amendment
Syndication Parties Execution; Voting
Participant Approval. The Administrative Agent shall have
received (a) written approval of this Seventh Amendment by at least the Required
Lenders (including Voting Participants); and (b) a copy of this Seventh
Amendment executed by the Syndication Parties as required.
Representations and
Warranties. The representations and warranties of Borrower in
the Credit Agreement shall be true and correct in all material respects on and
as of the Effective Date as though made on and as of such date.
No Event of
Default. No Event of Default shall have occurred and be
continuing under the Credit Agreement as of the Effective Date of this Seventh
Amendment.
Payment of Fees and
Expenses. Borrower shall have paid the Administrative Agent,
by wire transfer of immediately available federal funds (a) all fees presently
due under the Credit Agreement (as amended by this Seventh Amendment); and (b)
all expenses owing as of the Effective Date pursuant to Section 15.1 of the
Credit Agreement.
General
Provisions.
No Other
Modifications. The Credit Agreement, as expressly modified
herein, shall continue in full force and effect and be binding upon the parties
thereto.
Successors and
Assigns. This Seventh Amendment shall be binding upon and
inure to the benefit of Borrower, Agent, and the Syndication Parties, and their
respective successors and assigns, except that Borrower may not assign or
transfer its rights or obligations hereunder without the prior written consent
of all the Syndication Parties.
Definitions. Capitalized
terms used, but not defined, in this Seventh Amendment shall have the meaning
set forth in the Credit Agreement.
Severability. Should
any provision of this Seventh Amendment be deemed unlawful or unenforceable,
said provision shall be deemed several and apart from all other provisions of
this Seventh Amendment and all remaining provision of this Seventh Amendment
shall be fully enforceable.
Governing Law. To
the extent not governed by federal law, this Seventh Amendment and the rights
and obligations of the parties hereto shall be governed by, interpreted and
enforced in accordance with the laws of the State of Colorado.
Headings. The
captions or headings in this Seventh Amendment are for convenience only and in
no way define, limit or describe the scope or intent of any provision of this
Seventh Amendment.
Counterparts. This
Seventh Amendment may be executed by the parties hereto in separate
counterparts, each of which, when so executed and delivered, shall be an
original, but all such counterparts shall together constitute one and the same
instrument. Each counterpart may consist of a number of copies
hereof, each signed by less than all, but together signed by all, of the parties
hereto. Copies of documents or signature pages bearing original
signatures, and executed documents or signature pages delivered by a party by
telefax, facsimile, or e-mail transmission of an Adobe® file format document
(also known as a PDF file) shall, in each such instance, be deemed to be, and
shall constitute and be treated as, an original signed document or counterpart,
as applicable. Any party delivering an executed counterpart of this
Seventh Amendment by telefax, facsimile, or e-mail transmission of an Adobe®
file format document also shall deliver an original executed counterpart of this
Seventh Amendment, but the failure to deliver an original executed counterpart
shall not affect the validity, enforceability, and binding effect of this
Seventh Amendment.
[Signatures to follow on next
page.]
IN
WITNESS WHEREOF, the parties hereto have caused this Seventh Amendment to be
executed as of the Effective Date.
ADMINISTRATIVE
AGENT: CoBank,
ACB
By: /s/ Xxxxx
Xxxxxx
Name: Xxxxx
Xxxxxx
Title: Vice
President
BORROWER: Pilgrim’s
Pride Corporation
By: /s/ Xxxxxxx X.
Xxxxxxx
Name: Xxxxxxx
X. Xxxxxxx
Title: Exe.
VP, CFO, Sec & Treas.
SYNDICATION
PARTIES: CoBank,
ACB
By: /s/ Xxxxx
Xxxxxx
Name:
Xxxxx Xxxxxx
Title: Vice
President
Agriland, FCS
By: /s/ Xxxxxx
Xxxxx
Name: Xxxxxx
Xxxxx
Title: Chief
Credit Officer
Deere Credit, Inc.
By: /s/ Xxxxxxx X.
Xxxxx
Name: Xxxxxxx
X. Xxxxx
Title: Manager,
AFS Xxxxxxx Credit Operations
Bank
of the West
By:
Name: Xxxxx
Xxxxxx
Title: Vice
President
Xxxx
Xxxxxxx Life Insurance Company
By: /s/ Xxxxxxx X.
Xxxxxx
Name:
Xxxxxxx X. Xxxxxx
Title: Director
The
Variable Annuity Life Insurance Company
The
United States Life Insurance Company in the City of New York
Merit
Life Insurance Co.
American
General Assurance Company
AIG
International Group, Inc.
AIG
Annuity Insurance Company
By: /s/ Xxxxxxx X.
Xxxxxx
Name: Xxxxxxx
X. Xxxxxx
Title: Managing
Director
Transamerica
Life Insurance Company
By: /s/ Xxxxxxx
Xxxxxx
Name: Xxxxxxx
Xxxxxx
Title: Vice
President
The
CIT Group/Business Credit, Inc.
By:
Name: Xx
Xxxxxxx
Title: Vice
President
Metropolitan
Life Insurance Company
By: /s/ Xxxxxx X.
Xxxxx
Name: Xxxxxx
X. Xxxxx
Title: Director
Cooperatieve
Centrale Raiffeisen-Boerenleenbank B.A., “Rabobank-Nederland” New York
Branch
By: /s/ Xxxxxxx X.
Xxxxx
Name: Xxxxxxx
X. Xxxxx
Title: Executive
Director
By: /s/ Xxxxxxx
Xxxxxx
Name: Xxxxxxx
Xxxxxx
Title: Executive
Director
Farm
Credit Services of America, PCA
By: /s/ Xxxxx X.
Xxxxx
Name: Xxxxx
X. Xxxxx
Title: Vice
President
The
Prudential Insurance Company of America
By: /s/ Xxxxxxx X.
Xxxxxxxxxx
Name: Xxxxxxx
X. Xxxxxxxxxx
Title: Vice
President
