EIGHTH AMENDMENT TO CREDIT AGREEMENT
EXHIBIT
10.1
EIGHTH
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: April
30, 2008
|
Effective
Date:
|
May
1, 2008 (Subject to satisfaction of conditions as set forth in Section 2
hereof)
|
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, that certain Sixth Amendment to Credit Agreement dated as
of November 7, 2007, and that certain Seventh Amendment to Credit Agreement
dated as of March 10, 2008 (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 requested that the Agent and the Syndication Parties modify the Credit
Agreement which the Agent and the Syndication Parties are willing to do under
the terms and conditions as set forth in this Eighth Amendment to Credit
Agreement (“Eighth
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
1.51 is amended to read as follows:
1.51 Floating
Rate Tranche Margin: means, subject to any revision pursuant
to Subsection 4.9.3 hereof, (a) for the period
beginning on May 1, 2008 and ending on September 26, 2009 (i) 275
basis points during any period that Borrower’s Debt to EBITDA ratio, as set
forth in the most recent Compliance Certificate, is greater than or equal to
4.5x; (ii) 225 basis points during any period that Borrower’s Debt to EBITDA
ratio, as set forth in the most recent Compliance Certificate, is greater than
or equal to 3.0x, but less than 4.5x; and (iii) 200 basis points
during any period that Borrower’s Debt to EBITDA ratio, as set forth in the most
recent Compliance Certificate, is less than 3.0x; and (b) after September 26,
2009 (i) 175 basis points during any period that Borrower’s Debt to EBITDA
ratio, as set forth in the most recent Compliance Certificate, is greater than
3.0x; and (ii)
150 basis points during any period that Borrower’s Debt to EBITDA ratio, as set
forth in the most recent Compliance Certificate, is less than or equal to
3.0x. For the purposes of determining the Floating Rate Tranche
Margin, Borrower’s EBITDA shall be determined on a rolling four (4) Fiscal
Quarter basis.
Section
4.4.1 is amended to add the following sentence at the end thereof:
For the
period beginning on May 1, 2008 and ending on September 26, 2009, the unpaid
principal balance of any outstanding Fixed Rate Tranche of the Term Loan shall
bear additional interest at a rate equal to 50 basis points.
Clause
(d) of Section 4.9.1 is amended and a new clause (e) of Section 4.9.1 is added,
in each case to read as follows:
(d) For
the period beginning on May 1, 2008 and ending on September 26, 2009,
in the event that, with respect to the period described in clause (a) of
this Subsection, the Compliance Certificate is not received by Administrative
Agent by the Margin Report Deadline, the Margins and the Commitment Fee Factor
for the period commencing on the first Banking Day after the Margin Report
Deadline will each be based on Pricing Level VI continuing until the fifth
Banking Day after such time as Borrower delivers the Compliance Certificate to
the Administrative Agent, after which time the Margins and the Commitment Fee
Factor will be based on such Compliance Certificate:
|
Pricing Level
|
Leverage
Ratio
|
LIBOR Margin
|
Base Rate Margin
|
Commitment
Fee Factor
|
|
I
|
<
45%
|
150.0
basis points
|
0
basis points
|
27.5
basis points
|
|
II
|
≥45%
< 50%
|
175.0
basis points
|
0
basis points
|
32.5
basis points
|
|
III
|
≥50%
< 55%
|
200.0
basis points
|
0
basis points
|
37.5
basis points
|
|
IV
|
≥55%
< 60%
|
225.0
basis points
|
25.0
basis points
|
42.5
basis points
|
|
V
|
≥60%
< 65%
|
250.0
basis points
|
25.0
basis points
|
47.5
basis points
|
|
VI
|
≥65%
|
300.0
basis points
|
25.0
basis points
|
52.5
basis points
|
(e) After September 26, 2009,
in the event that, with respect to the period described in clause (a) of
this Subsection, the Compliance Certificate is not received by Administrative
Agent by the Margin Report Deadline, the Margins and the Commitment Fee Factor
for the period commencing on the first Banking Day after the Margin Report
Deadline will each be based on Pricing Level V continuing until the fifth
Banking Day after such time as Borrower delivers the Compliance Certificate to
the Administrative Agent, after which time the Margins and the Commitment Fee
Factor will be based on such Compliance Certificate:
|
Pricing Level
|
Leverage
Ratio
|
LIBOR Margin
|
Base Rate Margin
|
Commitment
Fee Factor
|
|
I
|
<
45%
|
100.0
basis points
|
0
basis points
|
20.0
basis points
|
|
II
|
≥45%
< 50%
|
125.0
basis points
|
0
basis points
|
25.0
basis points
|
|
III
|
≥50%
< 55%
|
150.0
basis points
|
0
basis points
|
30.0
basis points
|
|
IV
|
≥55%
< 60%
|
175.0
basis points
|
25.0
basis points
|
35.0
basis points
|
|
V
|
≥60%
|
200.0
basis points
|
25.0
basis points
|
40.0
basis points
|
1.4 Section
10.12 is amended to read as follows:
10.12 Financial
Covenants. Borrower shall maintain the following financial
covenants, measured on the consolidated results of Borrower and its
Subsidiaries:
10.12.1 Leverage
Ratio. A Leverage Ratio of not in excess of (a) 0.70 at any
time through September
26, 2009, and (b) 0.65 at any time after September 26,
2009.
10.12.2 Tangible
Net Worth. (a) At all times during the period through
September 25, 2009, Tangible Net Worth of not less than $250,000,000; and (b) at
all times after September 25, 2009, Tangible Net Worth of not less than
$300,000,000, which amount shall increase cumulatively as of the last day of
each Fiscal Year commencing with the Fiscal Year ending October 2, 2010 by an
amount equal to 50% of Borrower’s Net Income (but not less than zero) during
such Fiscal Year.
10.12.3 Current
Ratio. A Current Ratio measured as of the last day of each
Fiscal Quarter of not less than 1.35 to 1.00.
10.12.4 Net
Tangible Assets to Total Liabilities. (a) During the period
through June 27,
2009, a ratio of Net Tangible Assets to Total Liabilities measured as of
the last day of each Fiscal Quarter of not less than 1.05 to 1.00; (b) for the
Fiscal Quarter ending September 26, 2009, a ratio of Net Tangible Assets to
Total Liabilities of not less than 1.10 to 1.00 measured as of the last day of
such Fiscal Quarter; and (c) thereafter, a ratio of Net Tangible Assets to Total
Liabilities measured as of the last day of each Fiscal Quarter of not less than
1.125 to 1.00.
10.12.5 Fixed
Charge Coverage Ratio. The Fixed Charge Coverage Ratio over
the most recent eight consecutive Fiscal Quarters, measured as of the last day
of each Fiscal Quarter, (a) of not less than 1.25 to 1.00 during the period through September 26, 2009;
and (b) of not less than 1.50 to 1.00 for each Fiscal Quarter
thereafter.
10.12.6 Net
Working Capital. Net Working Capital, measured as of the last
day of each Fiscal Quarter of not less than $250,000,000.
1.5 Section
10.18 is amended by the addition of a new clause (e) to read as
follows:
(e) On
or before July 31, 2008, Borrower shall execute and deliver a deed of trust or
mortgage and assignment of leases and rents with respect to Borrower’s interest
in the property listed on Exhibit 10.18(e)
attached hereto in form and substance satisfactory to the Administrative Agent,
to the Administrative Agent or a mortgage trustee, in each case for the benefit
of the Syndication Parties, granting a lien of record on said property, subject
only to Permitted Encumbrances, and such property shall thereafter be part of
the Collateral, but, unless and until such property satisfies the requirements
set forth in Section 10.18(a) and 10.18(b), shall not be Additional Property and
shall not be considered in the determination of the Available
Amount. Subsection 10.18(d) shall not apply to the execution and
delivery of deeds of trust or mortgages and assignments of leases and rents as
described in this Subsection 10.18(e). With respect to each property
listed on Exhibit
10.18(e) attached hereto and with respect to each the deed of trust or
mortgage and assignment of leases and rents with respect thereto, Borrower
shall, on or before July 31, 2008, have provided to the Administrative Agent a
commitment for title insurance (or the equivalent thereof in the form of a title
report or an owners and encumbrance report) issued by a title company acceptable
to the Administrative Agent. No title insurance policy, appraisals,
surveys, environmental assessments reports or legal opinions shall be required
with respect to the property listed on Exhibit 10.18(e)
attached hereto.
1.6 A
new Exhibit 10.18(e) is added in the form of Exhibit 10.18(e)
hereto.
Conditions to Effectiveness of this
Eighth Amendment. The effectiveness of this Eighth Amendment
is subject to satisfaction, in the Administrative Agent’s sole discretion, of
each of the following conditions precedent:
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
Eighth Amendment
Syndication Parties Execution; Voting
Participant Approval. The Administrative Agent shall have
received (a) written approval of this Eighth Amendment by at least the Required
Lenders (including Voting Participants); and (b) a copy of this Eighth 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 Eighth
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 Eighth Amendment); (b) all
expenses owing as of the Effective Date pursuant to Section 15.1 of the
Credit Agreement, (c) amendment fees in consideration of this Eighth Amendment
for the account of each Syndication Party and Voting Participant that has
delivered their signature page to this Eighth Amendment or their consent thereto
(as the case may be) to the Agent or to Agent’s counsel, without conditions, on
or before 5:00 p.m. (Denver Time) on April 30, 2008, in each case in an amount
equal to (i) the aggregate amount of such Syndication Party’s or Voting
Participant’s Individual Revolving Commitment and Individual Term Outstanding
Obligations on the date of this Eighth Amendment, (ii) multiplied by 25 basis
points, and (d) an arrangement fee to CoBank in consideration of this Eighth
Amendment, solely for the account of CoBank as set forth in the fee letter
between Borrower and CoBank.
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 Eighth 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 Eighth Amendment shall have the meaning set
forth in the Credit Agreement.
Severability. Should
any provision of this Eighth Amendment be deemed unlawful or unenforceable, said
provision shall be deemed several and apart from all other provisions of this
Eighth Amendment and all remaining provision of this Eighth Amendment shall be
fully enforceable.
Governing Law. To
the extent not governed by federal law, this Eighth 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 Eighth Amendment are for convenience only and in no
way define, limit or describe the scope or intent of any provision of this
Eighth Amendment.
Counterparts. This
Eighth 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
Eighth Amendment by telefax, facsimile, or e-mail transmission of an Adobe® file
format document also shall deliver an original executed counterpart of this
Eighth Amendment, but the failure to deliver an original executed counterpart
shall not affect the validity, enforceability, and binding effect of this Eighth
Amendment.
[Signatures to follow on next
page.]
IN
WITNESS WHEREOF, the parties hereto have caused this Eighth Amendment to be
executed as of the Effective Date.
ADMINISTRATIVE
AGENT: CoBank,
ACB
By: /s/ Xxxxx X.
Xxxxx
Name: Xxxxx
X. Xxxxx
|
|
Title:
|
Senior
Vice President and Managing
Director
|
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 X.
Xxxxx
Name: Xxxxx
X. Xxxxx
|
|
Title:
|
Senior
Vice President and Managing
Director
|
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: /s/ Xxxxx
Xxxxxx
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
By: /s/ Xxxxxxx X.
Xxxxxx
Name: Xxxxxxx
X. Xxxxxx
Title: Managing
Director
The
United States Life Insurance Company in the City of New York
By: /s/ Xxxxxxx X.
Xxxxxx
Name: Xxxxxxx
X. Xxxxxx
Title: Managing
Director
Merit
Life Insurance Co.
By: /s/ Xxxxxxx X.
Xxxxxx
Name: Xxxxxxx
X. Xxxxxx
Title: Managing
Director
American
General Assurance Company
By: /s/ Xxxxxxx X.
Xxxxxx
Name: Xxxxxxx
X. Xxxxxx
Title: Managing
Director
AIG
International Group, Inc.
By: /s/ Xxxxxxx X.
Xxxxxx
Name: Xxxxxxx
X. Xxxxxx
Title: Managing
Director
AIG
Annuity Insurance Company
By: /s/ Xxxxxxx X.
Xxxxxx
Name: Xxxxxxx
X. Xxxxxx
Title: Managing
Director
Transamerica
Life Insurance Company
By: /s/ Xxxxxx X.
Xxxxxxxxx
Name: Xxxxxx
X. Xxxxxxxxx
Title: Vice
President
The
CIT Group/Business Credit, Inc.
By: /s/ Xxxx
Xxxxxxx
Name: Xxxx
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/ Xxxxx X.
Xxxxxx
Name: Xxxxx
X. Xxxxxx
Title: Vice
President
EXHIBIT
10.18(e)
TO 2006
AMENDED AND RESTATED CREDIT AGREEMENT
Properties to be Mortgaged
per Section 10.18(e)
Pittsburg,
TX PPDC - Food Distribution Facility (Camp County)
Sumter, SC
Processing Facility (Sumter County)
Russellville,
AL Processing Facility (Franklin County)
Athens,
GA Processing Facility (Xxxxxx County)
Ball
Ground, GA Protein Facility (Cherokee County)
Sanford,
NC Processing Facility (Xxx County)
