AGREEMENT
BETWEEN PILGRIM'S PRIDE CORPORATION
AND PILGRIM INTERESTS, LTD.
AGREEMENT MADE effective as of June 11, 1999, by and between PILGRIM
INTERESTS, LTD., a Texas limited partnership (the "Partnership") and
PILGRIM'S PRIDE CORPORATION, a Delaware corporation with its principal
offices at 000 Xxxxx Xxxxx Xxxxxx, Xxxxxxxxx, Xxxxx (herein called the
"Company").
PRELIMINARY STATEMENT
In order to meet its continuing business needs, the Company will incur
certain indebtedness after the date of this Agreement and has incurred
certain indebtedness prior to the date of this Agreement by reason of
credit extended to it by certain creditors who will require or have
required the Partnership to guarantee such indebtedness as a condition to
extending such credit ("Guaranteed Indebtedness").
As a condition to the Partnership's being contingently liable as a
Guarantor on any Guaranteed Indebtedness, the Partnership requires that the
Company shall pay the Partnership a reasonable fee for such guaranty
undertaking.
AGREEMENT
In consideration of the premises and the mutual covenants contained
herein it is understood and agreed to by the parties hereto as follows:
1. GUARANTY OF GUARANTEED INDEBTEDNESS.
1.01. GUARANTY. In reliance upon the representations and warranties
herein and subject to the terms and conditions hereof, during the term of
this Agreement the Partnership shall, when required by the Company,
guarantee any Eligible Indebtedness to be incurred by the Company in form
and substance satisfactory to the related creditor ("Guaranty"). Any
Eligible Indebtedness so guaranteed is herein referred to as "Guaranteed
Indebtedness."
1.02. ELIGIBLE INDEBTEDNESS. The term "Eligible Indebtedness" shall
mean (i) any indebtedness to be incurred by the Company after the date of
this Agreement and required by its business needs by reason of credit to be
extended to the Company by a creditor who shall require the Partnership to
guarantee such indebtedness as a condition to extending such credit to the
Company; and (ii) any Indebtedness incurred by the Company prior to the
date of this Agreement and guaranteed by the Partnership pursuant to the
terms therein. For purposes of this Agreement a resolution by the Board of
Directors that such indebtedness is required by the business needs of the
Company is and shall be binding and conclusive upon all parties to this
Agreement.
1.03. CONDITION PRECEDENT TO ISSUANCE OF GUARANTY. The Partnership
shall not be required to issue a Guaranty after the date of this Agreement
until it has been furnished a certificate of the Secretary of the Company
certifying (i) the Eligible Indebtedness (including the maximum amount of
indebtedness, the name of the creditor and the terms and conditions
thereof) to be so guaranteed; (ii) a resolution of the Board of Directors
of the Company authorizing the Company to incur the Eligible Indebtedness;
and (iii) the principal amount of all Guaranteed Indebtedness then
outstanding. Notwithstanding the previous sentence, any Guaranty of
Eligible Indebtedness prior to the date of this Agreement guaranteed by the
Partnership shall not require satisfaction of the condition precedent
contained in this Section 1.03.
2. GUARANTY FEE.
2.01. GENERAL. So long as a Guaranty shall be outstanding the Company
shall pay a fee to the Partnership for the undertaking herein by the
Partnership under a Guaranty issued on or after the date of this Agreement
and any Guaranty issued prior to the date of this Agreement by the
Partnership, computed and subject to limitations as provided herein
("Fee").
2.02. DETERMINATION AND PAYMENT OF FEES. The total Fees which shall
accrue with respect to any calendar quarter shall be an amount equal to
1/4{th} of a percent multiplied by the average daily balance of the
principal amount of Guaranteed Indebtedness outstanding during such
calendar quarter. All Fees shall be paid quarterly within 45 days after
the end of each calendar quarter.
3. REPRESENTATIONS AND WARRANTIES.
3.01. REPRESENTATIONS AND WARRANTIES OF COMPANY. The Company
represents and warrants to the Partnership that:
(a) GUARANTIES REQUIRED BY CREDITORS. Certain creditors or
proposed creditors of the Company (including certain lessors) have
advised the Company that they will not extend credit to the Company
after the date of this Agreement without the Guaranty of the
Partnership.
(b) CREDIT REQUIRED BY THE BUSINESS NEEDS OF COMPANY. All
Guaranteed Indebtedness will be required by the business needs of the
Company.
3.02 REPRESENTATIONS AND WARRANTIES OF THE PARTNERSHIP. The
Partnership represents and warrants to the Company that the Partnership now
owns of record or beneficially such number of shares, $.01 par value, of
Class A common stock and Class B common stock of the Company as is set
forth with the signature subscribed at the end of this Agreement.
3.03. REPRESENTATIONS OF PARTIES AS TO REASONABLENESS OF FEES. Each
party hereto represents that the amount of Fees to be paid to the
Partnership as provided herein is reasonable under the circumstances.
4. MISCELLANEOUS.
4.01. PRIOR AGREEMENT. This Agreement shall supersede any obligation
to issue a Guaranty in the future as shall have been required by any such
prior agreement, if any.
4.02. NOTICES. All communications and notices hereunder shall be in
writing and shall be mailed or delivered to the Partnership at its address
as it appears herein below in this Agreement or to the Company at its
mailing address, X.X. Xxx 00, Xxxxxxxxx, Xxxxx 00000 or delivered to its
principal office, 000 Xxxxx Xxxxx Xxxxxx, Xxxxxxxxx, Xxxxx. The Company or
the Partnership may change its respective address where all communications
and notices may be sent hereunder by addressing notice of such change in
the manner above provided.
4.03. EXPENSES. Inasmuch as this Agreement is for the primary benefit
of the Company, the Company shall pay all counsel fees and other expenses
incurred in connection with the preparation and execution of this
Agreement.
4.04. SURVIVAL OF REPRESENTATIONS AND WARRANTIES, ETC. All
representations, warranties and covenants made by the Partnership or the
Company herein or in any certificate or other instrument delivered by and
pursuant hereto or in connection herewith, shall be deemed to have been
relied upon by all parties hereto, and shall survive throughout the term of
this Agreement and for two years thereafter regardless of any investigation
made by or on behalf of any party hereto.
4.05. CONTROLLING LAW. The validity of this Agreement shall be
governed by the laws of the State of Texas, and this Agreement shall be
construed and in force in accordance with the laws of the State of Texas.
4.06. BENEFIT. This Agreement shall be binding upon and inure to the
benefit of (i) any successor of the Company by statutory merger or
consolidation; and (ii) any successor or assign of the Partnership.
4.07. PERFORMANCE. Time is of the essence in this Agreement. All
obligations of any party are performable in Camp County, Texas.
4.08. ENTIRE AGREEMENT. This instrument contains the entire Agreement
between the parties hereto with the respect to the transactions
contemplated herein. No modification, alteration or amendment to this
Agreement nor any waiver of any provision hereof shall be valid or
effective unless in writing and executed by all parties hereto.
4.09. SEVERABILITY. If any part of this Agreement is judicially held
to be invalid, unenforceable or void, such holding shall not have the
effect of invalidating or voiding the remainder of this Agreement not so
declared, or any part thereof, the parties hereby agreeing that the part or
parts so held to be invalid, unenforceable or void shall be deemed to have
been stricken here from with the same force and effect as if such part or
parts had never been included herein.
4.10. TERMINATION OF AGREEMENT.
(a) GENERAL. Unless sooner terminated by the consent of all the
parties hereto this Agreement shall terminate upon the earlier of:
(1) EXPIRATION OF TIME. Expiration of 10 years after the
date of this Agreement.
(2) NOTICE OF THE PARTNERSHIP. Expiration of 30 days after
the Partnership shall have given written notice to the Company to
such effect on or after the date of execution of this Agreement.
(b) EFFECT OF TERMINATION. Upon the termination of this
Agreement the obligations of all parties hereto shall then be
discharged in full except that all Guaranties then outstanding shall
remain in full force according to their respective terms and
conditions, and the Company shall pay the Fees to the Partnership with
respect to Guaranteed Indebtedness outstanding after termination as
provided in Article 2.
This Agreement is signed and delivered on the date and year first
above set forth in multiple counterparts each of which shall be an
original.
* * *
PILGRIM'S PRIDE CORPORATION
/s/
Xxxxx Xxx Xxxxx
By:
Xxxxx Xxx Xxxxx
Chief Executive Officer
PILGRIM INTERESTS, LTD., a Texas limited
partnership
X.X. Xxx 00
Xxxxxxxxx, XX 00000
Shares of Class A Common Stock Directly
Owned:
7,197,692
Shares of Class B Common Stock Directly
Owned:
14,395,385
/s/ Xxxxxx X. Xxxxxxx
By: ____________________________
Xxxxxx X. Xxxxxxx, as trustee of the
Xxxxxx X. Xxxxxxx 1998 Revocable
Trust
General Partner
/s/ Xxxxxx Xxx Xxxxxxx
By: ____________________________
Xxxxxx Xxx Xxxxxxx
General Partner
