Pilgrim’s Pride Corporation Second Amendment to Fourth Amended and Restated Secured Credit Agreement
EXHIBIT
10.2
Pilgrim’s
Pride Corporation
Second
Amendment to Fourth Amended and Restated Secured Credit Agreement
This
Second Amendment to Fourth Amended and Restated Secured Credit Agreement
(herein, the “Amendment”) is entered into
as of April 30, 2008, among Pilgrim’s Pride Corporation, a Delaware
corporation (the “Company”), To-Ricos, Ltd., a
Bermuda company (“To-Ricos”), To-Ricos
Distribution, Ltd., a Bermuda company (“To-Ricos Distribution”; and
together with To-Ricos, the “Foreign Borrowers”; the
Company and the Foreign Borrowers collectively, the “Borrowers” and individually,
a “Borrower”), the Banks party hereto,
and Bank of Montreal a Canadian chartered bank acting through its Chicago
branch, as administrative agent for the Banks (the “Agent”).
Preliminary
Statements
A.The
Borrowers, the Banks and the Agent are parties to that certain Fourth Amended
and Restated Secured Credit Agreement dated as of February 8, 2007, as
amended (the “Credit
Agreement”). All capitalized terms used herein without
definition shall have the same meanings herein as such terms have in the Credit
Agreement.
B.The
Borrowers and the Banks have agreed to limit the amount of L/Cs that can be
outstanding under the Revolving Credit at any time and to amend the definition
of the term “Applicable
Margin” contained in Section 4.1 of the Credit Agreement and the
financial covenants contained in the Credit Agreement, all on the terms and
conditions set forth in this Amendment.
Now,
Therefore, for good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, the parties hereto agree as follows:
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1.Amendments.
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Upon
satisfaction of all of the applicable conditions precedent set forth in
Section 2 hereof, the Credit Agreement shall be amended as
follows:
1.1.The
third sentence of Section 1.5(a) of the Credit Agreement shall be amended
to read as follows:
“The L/Cs
shall consist of standby and commercial letters of credit in an aggregate face
amount not to exceed $175,000,000 outstanding at any time (excluding the amount
of the Bond L/C).”
1.2.Section 4.1
of the Credit Agreement shall be amended by adding the following definition
thereto in the appropriate alphabetical order:
“Second Amendment Effective Date”
means May 1, 2008.”
1.3.The
definition of the term “Applicable Margin” contained
in Section 4.1 of the Credit Agreement shall be amended to read as
follows:
“Applicable Margin” shall
mean, (a) during the period commencing on the Second Amendment Effective
Date and ending on the date the Agent determines the Applicable Margins based on
the Company’s financial statements for its fiscal quarter ending
September 26, 2009 (the “Pricing Increase Termination
Date”), with respect to each type of Loan and the commitment fee
described in Column A below, the rate of interest per annum shown in Columns B,
C, D, E, F and G below for the range of Leverage Ratio (expressed as a
percentage) specified for each Column:
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A
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B
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C
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D
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E
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F
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G
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Level
I
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Level
II
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Level
III
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Level
IV
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Level
V
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Level
VI
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Leverage
Ratio
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<=45%
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>45%<=
50%
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>50%<=
55%
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>55%<=
60%
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>60%<=
65%
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>65%
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Domestic
Rate Loans
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0.50%
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0.50%
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0.50%
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0.50%
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0.50%
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0.50%
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Eurodollar
Loans
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1.25%
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1.50%
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1.75%
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2.00%
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2.25%
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2.75%
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Commitment
Fee
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0.25%
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0.30%
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0.35%
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0.40%
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0.45%
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0.50%
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and
(b) from and after the Pricing Increase Termination Date, with respect to
each type of Loan and the commitment fee described in Column A below, the rate
of interest per annum shown in Columns B, C, D, E and F below for the range of
Leverage Ratio (expressed as a percentage) specified for each
Column:
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A
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X
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X
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X
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X
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X
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Xxxxx
X
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Xxxxx
XX
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Xxxxx
XXX
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Level
IV
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Level
V
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Leverage
Ratio
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<=45%
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>45%<=
50%
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>50%<=
55%
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>55%<=
60%
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>60%
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Domestic
Rate Loans
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0.0%
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0.0%
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0.0%
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0.0%
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0.0%
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Eurodollar
Loans
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0.75%
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1.00%
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1.25%
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1.50%
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1.75%
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Commitment
Fee
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0.175%
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0.225%
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0.275%
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0.325%
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0.35%
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Not later
than 5 Business Days after receipt by the Agent of the financial statements
called for by Section 7.4 hereof for the applicable fiscal quarter, the
Agent shall determine the Leverage Ratio for the applicable period and shall
promptly notify the Company and the Banks of such determination and of any
change in the Applicable Margins resulting therefrom. Any such change
in the Applicable Margins shall be effective as of the date the Agent so
notifies the Company and the Banks with respect to all Loans outstanding on such
date, and such new Applicable Margins shall continue in effect until the
effective date of the next quarterly redetermination in accordance with this
Section. Each determination of the Leverage Ratio and Applicable
Margins by the Agent in accordance with this Section shall be conclusive and
binding on the Company and the Banks absent manifest error. From the
date hereof until the Applicable Margins are first adjusted pursuant hereto, the
Applicable Margins shall be those set forth in Level IV above.
1.4.Sections 7.8,
7.9, 7.11 and 7.12 of the Credit Agreement shall be amended to read as
follows:
“Section 7.8.Leverage
Ratio. The Company will not permit its Leverage Ratio at any
time to exceed (a) 0.70 to 1 at any time from and after the Second
Amendment Effective Date through September 26, 2009, and (b) 0.65 to 1
at any time thereafter.
Section 7.9.Tangible Net
Worth. The Company shall maintain its Tangible Net Worth at
all times in an amount not less than (a) $250,000,000 from and after the
Second Amendment Effective Date through September 25, 2009,
and (b) $300,000,000 thereafter, which amount shall increase as of the
last day of each Fiscal Year commencing with the Fiscal Year ending October 2,
2010 by an amount, in each case, equal to 50% of the Company’s Net Income (but
not less than zero) for such Fiscal Year of the Company.
Section 0.00.Xxx Tangible Assets to Total
Liabilities. The Company will not permit the ratio of its Net Tangible
Assets to its Total Liabilities at any time, but measured as of the last day of
each quarterly fiscal accounting period of the Company, to be less than
(a) 1.05 to 1 as of the last day of each quarterly fiscal accounting period
of the Company ending after the Second Amendment Effective Date through and
including June 27, 2009, (b) 1.10 to 1 as of the last day of the
quarterly fiscal accounting period of the Company ending September 26, 2009, and
(c) 1.125 to 1 as of the last day of each quarterly fiscal accounting period of
the Company thereafter.
Section 7.12.Fixed Charge Coverage
Ratio. The Company will not permit, as of the last day of each
fiscal quarter of the Company, its Fixed Charge Coverage Ratio for the eight
consecutive fiscal quarters of the Company then ended to be less than
(a) 1.25 to 1 as of the last day of each quarterly fiscal accounting period
of the Company ending after the Second Amendment Effective Date through
September 26, 2009, and (b) as of the last day of each quarterly
fiscal accounting period of the Company thereafter, 1.50 to 1.”
1.5.Schedule I
attached to the form of Compliance Certificate attached to the Credit Agreement
as Exhibit F shall be replaced by Schedule I attached to this
Amendment.
1.6.The
Company agrees that no later than May 7, 2008, it shall cause the Guarantor to
execute and deliver to the Agent the Guarantor’s Consent set forth below, and
that the Company’s failure to comply with this Section shall constitute an Event
of Default under the Credit Agreement.
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2.Conditions
Precedent.
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The
effectiveness of this Amendment is subject to the satisfaction of all of the
following conditions precedent:
2.1.The
Borrowers and the Required Banks shall have executed this Amendment (such
execution may be in several counterparts and the several parties hereto may
execute on separate counterparts).
2.2.Each
of the representations and warranties set forth in Section 5 of the Credit
Agreement shall be true and correct.
2.3.The
Borrowers shall be in full compliance with all of the terms and conditions of
the Credit Agreement and no Event of Default
or Potential Default shall have occurred and
be continuing thereunder or shall result after giving effect to this
Amendment.
2.4.The
Agent shall have received for the ratable benefit of the Banks executing this
Amendment (the “Consenting
Banks”) an amendment fee in an amount equal to one-quarter of one percent
(0.25%) of Revolving Credit Commitment of each of the Consenting Banks, which
amendment fee shall be non-refundable.
2.5.The
Agent shall have received for its own account such fees as have been agreed upon
by the Company and the Agent.
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3.Representations
And Warranties.
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3.1.The
Company, by its execution of this Amendment, hereby represents and warrants the
following:
(a)each
of the representations and warranties set forth in Section 5 of the Credit
Agreement is true and correct as of the date hereof, except that the
representations and warranties made under Section 5.3 shall be deemed to
refer to the most recent annual report furnished to the Banks by the Company;
and
(b)the
Borrowers are in full compliance with all of the terms and conditions of the
Credit Agreement and no Event of Default or Potential Default has occurred and is
continuing thereunder.
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4.Miscellaneous.
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4.1.The
Company has heretofore executed and delivered to the Agent that certain Second
Amended and Restated Security Agreement Re: Inventory and Farm
Products dated as of February 8, 2007 (the “Security Agreement”) and the
Company hereby agrees that the Security Agreement shall continue to secure all
of the Company’s and the Foreign Borrowers’ indebtedness, obligations and
liabilities to the Agent, the L/C Issuers and the Banks under the Credit
Agreement as amended by this Amendment, that notwithstanding the execution and
delivery of this Amendment, the Security Agreement shall be and remain in full
force and effect and that any rights and remedies of the Agent thereunder,
obligations of the Company thereunder and any liens or security interests
created or provided for thereunder shall be and remain in full force and effect
and shall not be affected, impaired or discharged thereby. Nothing
herein contained shall in any manner affect or impair the priority of the liens
and security interests created and provided for by the Security Agreement as to
the indebtedness which would be secured thereby prior to giving effect to this
Amendment.
4.2.Except
as specifically amended herein, the Credit Agreement and the Notes shall
continue in full force and effect in accordance with their original
terms. Reference to this specific Amendment need not be made in any
note, document, letter, certificate, the Credit Agreement itself, the Notes, or
any communication issued or made pursuant to or with respect to the Credit
Agreement, any reference to the Credit Agreement being sufficient to refer to
the Credit Agreement as amended hereby.
4.3.The
Company agrees to pay all reasonable out-of-pocket costs and expenses incurred
by the Agent in connection with the preparation, execution and delivery of this
Amendment and the documents and transactions contemplated hereby, including the
reasonable fees and expenses of Xxxxxxx and Xxxxxx LLP.
4.4.This
Amendment may be executed in any number of counterparts, and by the different
parties on different counterparts, all of which taken together shall constitute
one and the same agreement. Any of the parties hereto may execute
this Amendment by signing any such counterpart and each of such counterparts
shall for all purposes be deemed to be an original.
4.5.(a) This
Amendment and the rights and duties of the parties hereto, shall be construed
and determined in accordance with the internal laws of the State of Illinois,
except to the extent provided in Section 4.5(b) hereof
and to the extent that the Federal laws of the United States of America may
otherwise apply.
(b)Notwithstanding
anything in Section 4.5(a) hereof to the contrary, nothing in this
Amendment, the Credit Agreement, the Notes, or the Other Loan Documents shall be
deemed to constitute a waiver of any rights which the Company, the Agent or any
of the Banks may have under the National Bank Act or other applicable Federal
law.
[Signature
pages to follow]
DALDMS/638955.3
This
Second Amendment to Fourth Amended and Restated Secured Credit Agreement is
entered into as of the date and year first above written.
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“Borrowers”
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Pilgrim’s
Pride Corporation
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By
/s/ Xxxxxxx X.
Xxxxxxx
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Its
Chief Financial Officer
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To-Ricos,
Ltd.
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By
/s/ Xxxxxxx X.
Xxxxxxx
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Its
Executive Vice President, Treasurer and Assistant
Secretary
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To-Ricos
Distribution, Ltd.
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By
/s/ Xxxxxxx X.
Xxxxxxx
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Its
Executive Vice President, Treasurer and Assistant
Secretary
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Accepted
and Agreed to as of the day and year last above written.
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Bank
of Montreal, as Agent
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By
/s/ Xxxxx X.
Xxxxxxxxx
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Its
Vice President
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BMO
Capital Markets Financing, Inc., individually and as Swing
Bank
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By
/s/ Xxxxx X.
Xxxxxxxxx
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Its
Vice President
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SunTrust
Bank
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By/s/ M. Xxxx
Xxxxxxxx
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Its
Vice President
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U.S.
Bank National Association
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By/s/
illegible
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Its
Vice President
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Xxxxx
Fargo Bank National Association
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By/s/ Xxxx
Xxxxxx
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Its
Vice President
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ING
Capital LLC
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By
/s/ Xxxx X.
Xxxxxx
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Its
Vice President
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Credit
Suisse, Cayman Islands Branch
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By
/s/ Xxxx
Xxxxxx
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Its
Director
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By
/s/ Xxxxx
Xxxx
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Its
Assistant Vice President
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Bank
of America N.A.
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By
/s/ Xxxxxxx
Xxxx
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Its
Senior Vice President
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CALYON
New York Branch
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By /s/ Xxxx
Xxxxxxxxxx
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Its
Managing Director
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By
/s/ Xxxxx
Xxxxxx
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Its
Managing Director
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Natixis
New York Branch
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By
/s/ Xxxxxxx
Lauras
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Its
Managing Director
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By
/s/ Xxxxxxx X.
Xxxxxxx
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Its
Managing Director
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XX
Xxxxxx Xxxxx Bank, N.A.
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By
/s/ Xxxxxxx X.
Xxxxx
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Its
Executive Director
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Deutsche
Bank Trust Company Americas
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By
/s/ Xxxxxxx
Xxxxxxx
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Its
Director
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By
/s/ Xxxxx
Xxxxxx
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Its
Director
First
National Bank of Omaha
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By
/s/ Xxxx
Xxxxxx
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Its
Vice President
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DALDMS/638955.3
