THIS CONFORMING PAPER FORMAT DOCUMENT IS BEING SUBMITTED PURSUANT TO RULE
902(G) OF REGULATION S-T

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-K

ANNUAL REPORT UNDER SECTION 13 OR 15 (d) OF 
THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended September 30, 1995 Commission File number 1-9273

PILGRIM'S PRIDE CORPORATION 
(Exact name of registrant as specified in its charter)

Delaware                          75-1285071
(State or other jurisdiction of   (I.R.S. Employer
incorporation or organization)    Identification No.)

110 South Texas, Pittsburg, TX             75686-0093
(Address of principal executive offices)   (Zip code)

Registrant's telephone number, including area code:  (903) 855-1000

Securities registered pursuant to Section 12 (b) of the Act:  

                                  Name of each exchange on
Title of each class               which registered 
Common Stock, Par Value $0.01     New York Stock Exchange

Securities registered pursuant to Section 12 (g) of the Act:  None

Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes  X  No    

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to
this Form 10-K.  [X]


The aggregate market value of the Registrant's Common Stock,  $0.01 par value,
held by non- affiliates of the Registrant as of December 19, 1995, was
$43,597,875.  For purposes of the foregoing calculation only, all directors,
executive officers, and 5% beneficial owners have been deemed affiliates.

27,589,250 shares of the Registrant's common stock, $.01 par value, were
outstanding as of December 19, 1995.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the Registrant's proxy statement for the annual meeting of
stockholders to be held February 7, 1996, are incorporated by reference into

Part III.


PART I


Item 1. Business

General 
  The Company, which was incorporated in Texas in 1968 and reincorporated in
Delaware in 1986, is the successor to a partnership founded as a retail feed
store in October, 1946 by the late Aubrey E. Pilgrim who was joined in the
partnership by his brother Lonnie  "Bo" Pilgrim in April, 1947. Over the years,
the Company grew through both internal growth and various acquisitions of
chicken farming and processing operations.  In addition to domestic growth, the
Company expanded into Mexico through acquisitions beginning in 1988 and
subsequent substantial capital investments.

  The Company is a vertically integrated producer of chicken products,
controlling the breeding, hatching and growing of chickens and the processing,
preparation and packaging of its product lines.  The Company is the fifth
largest producer of chicken in the United States, with production and
distribution facilities located in Texas, Arkansas, Oklahoma and Arizona, and
the second largest producer of chicken in Mexico, with production and
distribution facilities located in Mexico City and the states of Coahuila, San
Louis Potosi, Queretaro and Hidalgo.  The Company is also a producer of table
eggs, animal feeds and ingredients.  See Note H to the Consolidated Financial
Statements of the Company for information concerning revenues, operating profit
and identifiable assets attributable to the Company's U.S. and Mexican
operations.

  The Company's chicken products consist primarily of (i) prepared foods,
which include portion-controlled breast fillets, tenderloins and strips, formed
nuggets and patties and bone-in chicken parts, which are sold frozen and may be
either fully cooked or raw; (ii) fresh foodservice chicken, which includes
refrigerated (non-frozen), whole or cut-up chicken sold to the foodservice
industry either pre-marinated or non-marinated; (iii) prepackaged chicken,
which includes various combinations of freshly refrigerated, whole chickens and
chicken parts in trays, bags or other consumer packs labeled and priced ready
for the retail grocer's fresh meat counter; and (iv) bulk packaged chicken
which includes parts and whole chicken, either refrigerated or frozen for U.S.
export or domestic use and is sold in eviscerated form in the U.S. and in both
eviscerated and uneviscerated forms in Mexico.

  During recent years, the Company's strategy has been to identify and develop
specific, defined markets where it can achieve significant advantages over
competing suppliers.  Management believes that this strategy has enabled the
Company to achieve both higher rates of growth and higher profits than
otherwise would have resulted.  The Company has primarily targeted the
following markets: (1) U.S. foodservice, (2) U.S. consumer, and (3) Mexico. The
following table sets forth, for the periods since 1990, net sales attributable
to each of the Company's primary product types in these market segments. The
table is based on the Company's internal sales reports and its classification
of product types and customers.

                                 Fiscal Year Ended  
               Sept 29,  Sept 28,  Sept 26,   Oct 2,    Oct 1,    Sept 30,
                 1990      1991      1992      1993      1994      1995
              (52 Weeks)(52 Weeks)(52 Weeks)(53 Weeks)(52 Weeks)(52 Weeks)
                                    (in thousands)
U.S. Chicken Sales:
  Prepared Foods:
    Foodservice: $112,509 $151,661 $178,185 $183,165 $205,224 $240,456
     Consumer
     (Retail):     60,069   60,188   85,700   89,822   61,068   38,683
      Total
       Prepared
       Foods      172,578  211,849  263,885  272,987  266,292  279,139
  Fresh Chicken:
    Foodservice:  118,158  127,303  126,472  149,197  155,294  140,201
     Consumer 
     (Retail):    122,907  125,897  105,636  100,063  125,133  138,368
    Other:         95,907   85,323   72,724   77,709   88,437  113,414
      Total 
       Fresh 
       Chicken    366,972  338,523  304,832  326,969  368,864  391,983

Mexico:
  Bulk-packaged 
   chicken        110,632  141,570  160,620  188,754  188,744  159,491
      Total 
       Chicken 
       Sales      620,182  691,942  729,337  788,710  823,900  830,613

Sales of Other 
 Domestic Products100,373   94,709   88,024   99,133   98,709  101,193
      Total Net 
       Sales     $720,555 $786,651 $817,361 $887,843 $922,609  $31,806

United States
  The following table sets forth, since fiscal 1990, the percentage of net
U.S. chicken sales attributable to each of the Company's primary products lines
and markets serviced with such products. The table and related discussion are
based on the Company's internal sales reports and its classification of product
types and customers.
      

                                      Fiscal Year Ended  
                Sept 29,  Sept 28,  Sept 26,   Oct 2,    Oct 1,   Sept 30,
                  1990      1991      1992      1993      1994     1995
               (52 Weeks)(52 Weeks)(52 Weeks)(53 Weeks)(52 Weeks)(52 Weeks)
                          
U.S. Chicken Sales:
  Prepared Foods:
    Foodservice    22.1%     27.6%     31.3%     30.5%     32.3%     35.8%
     Consumer 
    (Retail):      11.8      10.0      15.1      15.0       9.6       5.8
      Total Prepared
       Foods       33.9      38.5      46.4      45.5      41.9      41.6

  Fresh Chicken:
    Foodservice:   23.2      23.1      22.2      24.9      24.4      20.9   
     Consumer 
     (Retail):     24.1      22.9      18.6      16.7      19.7      20.6   
    Other:         18.8      15.5      12.8      13.0      13.9      16.9   
      Total Fresh 
       Chicken     66.1%     60.5%     53.6%     54.5%     58.1%     58.4%

Total U.S. Chicken 
 Sales Mix        100.0%    100.0%    100.0%    100.0%    100.0%    100.0%


  Strategy
  Domestic chicken sales can be segmented into two principal product types -
prepared foods  and fresh chicken. The Company's U.S. business strategy is to
(i) focus most of its primary growth in prepared foods product lines, primarily
to foodservice chain restaurants and other commercial and industrial users of
prepared chicken; (ii) grow its fresh chicken business through value-added,
prepackaged consumer (retail) products; (iii) maintain a substantial presence
in the fresh foodservice market segment, and (iv) achieve significant cost and
product advantages over competing suppliers through leadership in production
technology and new product R & D. The Company believes this strategy results in
greater growth in sales and profits than would otherwise result.


Product Types
  U.S. Prepared Foods Overview
  During 1995, $279.1 million of the Company's net U.S. chicken sales were in
prepared foods products to foodservice and consumer (retail) customers. This is
an all time high, up from $172.6 million in 1990 and reflects the strategic
focus for growth of the Company. Management believes the market for prepared
foods chicken products will be generally characterized by higher growth rates
and more stable margins than non-prepared products. The Company will grow its
prepared foods sales to the foodservice industry at a faster rate than to the
retail industry.

  The Company establishes prices for its prepared chicken products based
primarily upon perceived value to the customer, production costs and prices of
competing products.  However, many of these products are priced according to
formulas which are based on an underlying commodity market, and this factor
causes some price fluctuation.

  U.S. Fresh Chicken Overview
  During 1995, $392.0 million of the Company's net U.S. chicken sales were in
fresh chicken products to foodservice, consumer (retail) and other customers.
This is an all time high, up from $367.0 million in 1990. The most significant
changes are reflected in the sales doller shifts since 1992 as the Company
has reemphasized its retail fresh chicken business which management believes 
will continue to be a large and relatively stable base of business. The Company
anticipates that its foodservice volume will continue to gradually shift from 
fresh to more of a prepared foods sales mix, however, there will always remain 
a base level of fresh foodservice business. Sales growth in the "Other" 
category primarily reflect approximately $32 million in 1995 exports of fresh 
frozen chicken.  

  Most fresh chicken products are sold to established customers based upon
certain weekly or monthly market prices reported by the U.S.D.A. and other
public price reporting services, plus a markup, which is dependent upon the
customer's location, volume, product specifications and other factors. A
significant portion of the Company's fresh chicken sales is governed by
agreements with customers that provide for the pricing method and volume of
products to be purchased.  The Company believes its practices with respect to
sales of its fresh chicken are generally consistent with those of  its
competitors. The "Other" category of fresh chicken is the sale of the Company's
bulk-packaged, whole chicken which have historically been characterized by
lower prices and greater price volatility than the Company's more value-added
product lines.  In the United States, prices of these products are negotiated
daily or weekly and are generally related to market prices quoted by the
U.S.D.A. or other public price reporting services. 

  
Market Segments
  U.S. Foodservice
  The majority of the Company's U.S. chicken sales are derived from products
sold to the foodservice market which principally consists of chain restaurants,
institutions, foodservice distributors, and  commercial or industrial users of
chicken located throughout the continental United States. The Company supplies
chicken products ranging from portion-controlled refrigerated chicken parts to
fully cooked and frozen, breaded or non-breaded chicken parts or formed
products.

  As the second largest full-line supplier of chicken to the foodservice
industry, the Company believes it is well-positioned to be  the primary or
secondary supplier to many national and international chain restaurants who
require multiple suppliers of chicken products. Additionally, it is well suited
to be the sole supplier for many regional chain restaurants that offer better
margin opportunities and a growing base of business. Due to its comparatively
large size in this market, management believes the Company has significant
competitive advantages in terms of product capability, production capacity,
research and development expertise, and distribution and marketing experience
relative to smaller and to non-vertically integrated producers.  As a result of
these competitive advantages, the Company's sales to the foodservice market
from fiscal 1990 through fiscal 1995 grew at a compound annual growth rate of
approximately 11%.  The Company markets both prepared and fresh chicken to the
foodservice industry.

  Foodservice - Prepared Foods:  Prepared foods sales to the foodservice
market were $240.5 million in fiscal 1995 and have increased at a compound
annual growth rate of approximately 16% from fiscal 1990 through fiscal 1995. 
The Company's prepared foods products include portion-controlled breast
fillets, tenderloins and strips, formed nuggets and patties and bone-in chicken
parts, which are sold frozen and in various stages of preparation, including
blanched, battered, breaded and partially or fully-cooked.  The Company
attributes this growth in sales of prepared foods to the foodservice market to
a number of factors:

  First, there has been significant growth in the number of foodservice
operators offering chicken on their menus and the number of chicken items
offered;

  Second, foodservice operators are increasingly purchasing prepared chicken
products which allow them to reduce labor cost while providing greater product
consistency, quality and variety across all restaurant locations;
  
  Third, there is a strong need among larger foodservice companies for an
alternative or additional supplier to the Company's principle competitor in the
prepared foods market. A viable alternative supplier must be able to ensure
supply, demonstrate innovation and new product development, and provide price
competition. The Company has been successful in its attempt to become the
alternative supplier of choice, and thus the primary or secondary prepared
chicken supplier to many large foodservice companies because it (i) is
vertically integrated, giving the Company control over raw material supplies,
(ii) has the capability to produce many types of chicken items and (iii) has
established a reputation for dependable quality, highly responsive service and
excellent technical support;

  Fourth, as a result of the experience and reputation developed with larger
customers, the Company has increasingly become the principal supplier to
midsized foodservice organizations; and

  Fifth, the Company's in-house product development group, responding to the
changing needs of the foodservice market, has enabled the Company to provide
foodservice customers with new and improved prepared foods.  Approximately $122
million of the Company's sales to foodservice customers in 1995 consisted of
products which were not sold by the Company in 1990.  

  Foodservice - Fresh Chicken:  The Company produces and markets fresh,
refrigerated chicken for sale to domestic quick-service restaurant chains,
delicatessens and other customers.  These chickens have the giblets removed,
are usually of specific weight ranges, are usually pre-cut to customer
specifications and are often marinated to enhance value and product
differentiation.  By growing and processing to customers specifications, the
Company is able to assist quick service restaurant chains in controlling costs
and maintaining size consistency of chicken pieces sold to the consumer.

U.S. Consumer
  The U.S. consumer market consists primarily of grocery store chains, retail
distributors and wholesale clubs.  The Company concentrates its efforts in this
market on sales of branded, prepackaged cut-up and whole chicken to grocery
chains and retail distributors in the midwestern, southwestern and western
portions of the United States.  This regional marketing focus enables the
Company to develop consumer brand franchises and capitalize on proximity to the
trade customer, in terms of lower transportation costs; more timely, responsive
service; and enhanced product freshness.  For a number of years the Company has
invested in both trade and consumer marketing designed to establish high levels
of brand name awareness and consumer preferences within these markets.

The Company utilizes numerous marketing techniques, including advertising, to
develop and strengthen trade and consumer awareness and increase brand loyalty
for consumer products marketed under the Pilgrim's Pride brand.  The Company's
founder, Lonnie "Bo" Pilgrim, is the featured spokesman in the Company's
television, radio and print advertising, and a trademark cameo of a person in a
Pilgrim's hat serves as the logo on all of the Company's primary branded
products.  As a result of this marketing strategy, the Company has established
a well-known brand name in certain southwestern markets, including the
Dallas/Fort Worth area where, according to a market research company, the
Company's brand name was recognized by 96% of grocery shoppers in an aided
brand recall study conducted in 1994. Management believes its efforts to
achieve and maintain brand awareness and loyalty help to provide more secure
distribution for its products and generate greater price premiums that would
otherwise be the case in certain southwestern markets. The Company also
maintains an active program to identify consumer preferences primarily by
testing new product ideas, packaging designs and methods through taste panels
and focus groups located in key geographic markets.

  Consumer - Prepared Foods:  The Company sells consumer oriented prepared
foods primarily to grocery store chains located in the midwestern, southwestern
and western portions of the U.S. where it also markets prepackaged fresh
chicken. Being a major, national competitor in retail, branded frozen foods is
not a part of the Company's current business strategy. The Company previously
was a national supplier of retail prepared chicken to Pace Membership Warehouse
until Pace was acquired by Sam's Club in January 1994. The wholesale club
industry is dominated by two large national operators, Sam's Club and Price-
Costco. Due to the highly concentrated nature of the club store business the
Company has redirected this prepared foods capacity to a more diversified
customer base with better overall gross margins.

  Consumer -Fresh Chicken:  The Company's prepackaged retail products include
various combinations of freshly refrigerated whole chickens and chicken parts
in trays, bags or other consumer packs, labeled and priced ready for the
grocer's fresh meat counter. Management believes the retail, prepackaged fresh
chicken business will continue to be a large and relatively stable market,
providing opportunities for product differentiation and regional brand loyalty. 

The Company concentrates its sales and marketing efforts for the above product
types to grocery chains and retail distributors in the midwestern, southwestern
and western portions of the United States.  This regional marketing focus
enables the Company to develop consumer brand franchises and capitalize on
proximity to the trade customer, in terms of lower transportation costs; more
timely, responsive service; and enhanced product freshness.
  
  Other Chicken:  The Company sells bulk whole chickens and cut-up parts
primarily to retail grocers and food distributors in the United States.  In
recent years, the Company has de-
emphasized its marketing of bulk-packaged chicken in the United States in favor
of more value-added products and export opportunities.  In the United States,
prices of these products are negotiated daily or weekly and are generally
related to market prices quoted by the U.S.D.A.or other public price reporting
services.  The majority of the growth in sales of "other" products between 1993
and 1995 were in exports to the Far East, Middle East and Eastern Europe.
Management believes exports of both prepared and fresh chicken will grow at a
rate faster than the general industry as a whole. 


Mexico
  Strategy
  In Mexico, the Company has made capital investments in advanced production
technology, transferred experienced management personnel and utilized proven
domestic production techniques in order to be a low cost producer of chicken. 
At the same time, the Company has directed its marketing efforts toward more
value added chicken products.  Management believes that this strategy has
resulted in increased market share and higher profit margins relative to other
Mexican chicken producers and has positioned the Company to participate in any
growth in chicken demand which may occur in the future.  Recent demand growth
in Mexico is evidenced by the increase in per capita consumption of chicken in
Mexico, from approximately 24 pounds in 1982 to approximately 38 pounds in
1994, according to an industry source.  Recent per capita consumption of
chicken is estimated to be down 13% to approximately 33 pounds.  The Company
considers this decline in consumption to be a temporary reaction resulting from
the economic impact of the Mexican peso's devaluation occurring in 1995.

  Background:  The Mexican market is one of the Company's fastest growing
markets and represented approximately 17% of the Company's net sales in fiscal
1995.  The Company entered the Mexican market in 1981 when it began selling
eggs on a limited basis.  Recognizing favorable long-term demographic trends
and improving economic conditions in Mexico, the Company began exploring
opportunities to produce and market chicken in Mexico.  In fiscal 1988, the
Company acquired four vertically integrated poultry production operations in
Mexico for approximately $15.1 million.  Since such acquisitions and through
fiscal 1995, the Company has made capital expenditures in Mexico totaling $145
million to expand and improve such operations.  Included in this amount is
fiscal 1995 investments of approximately $39.2 million for property, plant and
equipment in Mexico, of which $30.0 million was incurred in the acquisition of
Union de Queretaro, et al, a group of five chicken companies located near
Queretaro, Mexico.  (See Note I to the Consolidated Financial Statements).  The
Company believes its facilities are among the most technologically advanced in
Mexico.  As a result of these expenditures, the Company has increased weekly
production in its Mexico operations by over 415% since its original investment
in 1988.  The Company believes that it is one of the lowest cost producers of
chicken in Mexico.
  Products:  During the last three years, the Company's Mexico operation has
dramatically increased its value added sales of chicken products, which should
provide higher, more stable margins.  Although changing now, the market for
chicken products in Mexico is less developed than in the United States with
sales attributed to fewer, more basic products.

  Markets:  The Company sells its Mexican chicken products primarily to large
wholesalers and, to a lesser extent, to retailers through its own distribution
network, which includes several warehouse facilities located throughout Central
Mexico.  The Company's customer base in Mexico covers a broad geographic area
from Mexico City, the capital of Mexico with a population estimated to be over
20 million, to Saltillo, the capital of the State of Coahuila, about 500 miles
north of Mexico City, and from Tampico on the Gulf of Mexico to Acapulco on the
Pacific, which region includes the cities of San Luis Potosi and Queretaro,
capitals of the states of the same name.


Competition
  The chicken industry is highly competitive and certain of the Company's
competitors have greater financial and marketing resources than the Company. 
In the United States and Mexico, the Company competes principally with other
vertically integrated chicken companies.  In general, the competitive factors
in the domestic chicken industry include price, product quality, brand
identification, breadth of product line and customer service.  Competitive
factors vary by major market.  In the foodservice market, competition is based
on consistent quality, product development, service and price.  In the domestic
consumer market, management believes that product quality, brand awareness and
customer service are the primary bases of competition. There is some
competition with non vertically integrated further processors in the U.S.
prepared food business. The Company believes it has significant, long term 
cost and quality advantages over non-vertically integrated further processors. 
In Mexico, where product differentiation is limited, price and product quality
are the most critical competitive factors.


Other Activities
  The Company markets fresh eggs under the Pilgrim's Pride brand name as well
as private labels in various sizes of cartons and flats to domestic retail
grocery and institutional foodservice customers located primarily in Texas. 
The Company has a housing capacity for approximately 2.3 million commercial egg
laying hens which can produce approximately 41 million dozen eggs annually. 
Domestic egg prices are determined weekly based upon reported market prices. 
The domestic egg industry has been consolidating over the last few years with
the 20 largest producers accounting for more than 65% of the total number of
egg laying hens in service during 1995  The Company competes with other
domestic egg producers, primarily on the basis of product quality, reliability,
price and customer service.  According to an industry publication, the Company
is the 
twenty-fifth largest producer of eggs in the United States.

  In fiscal 1995, exports of the Company's U.S. produced chicken accounted for
approximately 5% of dollar sales. Exports were primarily to Asian, Middle
Eastern and Eastern European countries. While current activity in these markets
contributes only a small percentage of sales, the Company believes export
demand will grow at an even faster rate than U.S. demand in the future. As
export conditions become more favorable, management believes the Company is
well-positioned to increase sales of both raw and cooked chicken to foreign
countries.

  The Company has regional distribution centers located in Arlington, El Paso,
Mt. Pleasant and San Antonio, Texas; Phoenix and Tucson, Arizona; and Oklahoma
City, Oklahoma that distribute the Company's own poultry products along with
certain poultry and non-poultry products purchased from third parties.  The
Company's non-poultry distribution business is conducted as an accommodation to
their customers and to achieve greater economies of scale in distribution
logistics. They serve independent grocers and quick service restaurants. The
store-door delivery capabilities for the Company's own poultry products provide
a strategic service advantage in selling to quick service, national chain
restaurants.

  The Company also converts chicken by-products into protein products
primarily for sale to manufacturers of pet foods.  In addition, the Company
produces and sells livestock feeds at its feed mill and farm supply store in
Pittsburg, Texas, to dairy farmers and livestock producers in northeastern
Texas.  


Regulation
  The chicken industry is subject to government regulation, particularly in
the health and environmental areas.  The Company's domestic chicken processing
facilities are subject to on-site examination, inspection and regulation by the
U.S.D.A.  The F.D.A. inspects the production of the Company's domestic feed
mills.  The Company's Mexican food processing facilities and feed mills are
subject to on-site examination, inspection and regulation by a Mexican
governmental agency which performs functions similar to those performed by the
U.S.D.A. and F.D.A.  Since commencement of operations by the Company's
predecessor in 1946, compliance with applicable regulations has not had a
material adverse effect upon the Company's earnings or competitive position and
such compliance is not anticipated to have a materially adverse effect in the
future.  Management believes that the Company is in substantial compliance with
all applicable laws and regulations relating to the operations of its
facilities.

  The Company anticipates increased regulation by the U.S.D.A. concerning food
safety, as well as by the F.D.A. concerning the use of medications in feed. 
Although the Company does not anticipate any such regulation having a material
adverse effect upon the Company, no assurances can be given to that effect.


Employees and Labor Relations
  As of December 15, 1995 the Company employed approximately 8,000 persons in
the U.S. and 3,750 persons in Mexico.  Approximately 700 employees at the
Company's Lufkin, Texas facility are members of a collective bargaining unit
represented by Local 540 of the United Food and Commercial Workers Union (the
"UFCW").  None of the Company's other domestic employees have union
representation.  The Company has operated the Lufkin facility since its
purchase in 1986 without a collective bargaining agreement.  From February to
June 22, 1993, the Company engaged in negotiations with the UFCW to reach a
collective bargaining agreement.  On May 24 and 25, 1993, the Company
experienced a UFCW-initiated work stoppage involving approximately 200
employees at the Lufkin facility.  By May 26, 1993, substantially all of the
employees had returned to work.  On June 22, 1993, management declared that
negotiations had reached an impasse and implemented the terms of their latest
contract offer.  On September 29, 1995 a federal judge appointed by the fifth
circuit, found that the Company had not met its burden of proof in declaring
that negotiations had in fact reached an impasse and that it was in error in
implementing their last contract offer.  The Company has filed an appeal to
this decision, however, has yet to give oral arguments to the court. 
Additionally, the Company will resume negotiations with the union in efforts to
reach a collective bargaining agreement.   Unless and until a collective
bargaining agreement is reached, there may be further work disruptions at this
facility.  However, because of the adequate labor supply in the Lufkin area and
the Company's ability to shift portions of its production to other facilities,
the Company does not believe that additional work disruptions, if any, will
have a material adverse effect on the Company's operations or financial
condition.  In Mexico, most of the Company's hourly  employees are covered by
collective bargaining agreements as most employees are in Mexico.  Except as
described above, the Company has not experienced any work stoppages, and
management believes that relations with the Company's employees are
satisfactory.


Executive Officers of the Registrant
  As of December 15, 1994, the following were the Executive Officers of the
Company.  Officers are elected annually by the Board of Directors to serve at
the pleasure of the Board of Directors.

Executive Officers of the Company   Age      Positions

Lonnie "Bo" Pilgrim                 67       Chief Executive Officer

Lindy M. "Buddy" Pilgrim            41       President and Chief Operating
                                             Officer

Clifford E. Butler                  53       Chief Financial Officer,  
                                             Secretary and Treasurer

David Van Hoose                     53       President, Mexican Operations

Robert L. Hendrix                   59       Executive Vice President 
                                             Operations   

Terry Berkenbile                    45       Senior Vice President
                                             Sales & Marketing, Retail and
                                             Fresh Products

Richard A. Cogdill                  35       Senior Vice President          
                                             Corporate Controller

Ray Gameson                         47       Senior Vice President
                                             Human Resources

O.B. Goolsby, Jr.                   48       Senior Vice President 
                                             Prepared Foods

Michael D. Martin                   41       Senior Vice President
                                             DeQueen, Arkansas Complex

James J. Miner, Ph.D.               67       Senior Vice President 
                                             Technical Services

Michael J. Murray                   37       Senior Vice President
                                             Sales & Marketing, Prepared Foods

Robert N. Palm                      51       Senior Vice President, 
                                             Lufkin, Texas Complex

Mr. L. A. Pilgrim has served as Chairman of the Board and Chief Executive
Officer since the organization of the Company in 1968.  Prior to the
incorporation of the Company, Mr. Pilgrim was a partner in the Company's
predecessor partnership business founded in 1945.

Mr. L. M. Pilgrim serves as President and Chief Operating Officer of the 
Company.  He was elected as Director on March 8,1993 and began employment in 
April 1993 under the title of President of U.S. Operations and Sales & 
Marketing.  From April 1993 to March 1994, the President and Chief Operating
Officer reported to him.  After that time, the Chief Operating Officer title 
and responsibilities were incorporated into his own.  Up to October 1990, Mr. 
Pilgrim was employed by the Company for 12 years in marketing and 9 years in 
operations.  From October 1990 to April 1993, he was President of Integrity 
Management Services, Inc., a consulting firm to the food industry.  He is a 
nephew of Lonnie "Bo" Pilgrim.

Mr. Butler has been employed by the Company since 1969.  He has been a Director
of the Company since 1969, was named Senior Vice President of Finance in 1973,
and became Chief Financial Officer and Vice Chairman of the Board in July 1983.

Mr. Van Hoose has been President of Mexican Operations since April 1993.  He
was previously Senior Vice President, Director General, Mexican Operations
since August 1990.  Mr. Van Hoose was employed by Pilgrim's Pride in September
1988 as Senior Vice President, Texas Processing.  Prior to that, Mr. Van Hoose
was employed by Cargill, Inc., as General Manager of one of its chicken
operations.

Mr. Hendrix has been Executive Vice President, Operations, of the Company since
March 1994.  Prior to that he served as Senior Vice President, NETEX Processing
from August 1992 to March 1994 and as President and Chief of Complex Operations
from September 1988 to March 1992.  He was on leave from the Company from
March 1992 to August 1992.  He was President and Chief Operating Office of
the Company from July 1983 to September 1988.  He began as Senior Vice 
President in September 1981 when Pilgrim's Pride acquired Mountaire 
Corporation of DeQueen, Arkansas, and, prior thereto, he was Vice President of 
Mountaire Corporation.

Mr. Berkenbile was named Senior Vice President, Sales & Marketing, for Retail 
and Fresh Products in July 1994.  Prior to that he was Vice President, Sales &
Marketing, for Retail and Fresh Products since May 1993.  From February 1991 to
April 1993 Mr. Berkenbile was Director Retail Sales & Marketing at Hudson
Foods.  From February 1988 to February 1991, Mr. Berkenbile was Director Plant 
Sales at Pilgrim's Pride, prior thereto, he worked in the processed red meat
industry.

Mr. Cogdill has been Senior Vice President, Corporate Controller, since August
1992.  He was previously Vice President, Corporate Controller since October
1991.  Prior to that he was a Senior Manager with Ernst & Young LLP.  He is a
Certified Public Accountant.

Mr. Gameson has been Senior Vice President of Human Resources since October
1994.  He previously served as Vice President  of Human Resources since August,
1993.  From December 1991 to July 1993, he was employed by Townsends, Inc. and
served as Complex Human Resource, Manager.  Prior to that he was employed by
the Company as Complex Human Resource, Manager, at its Mt. Pleasant, Texas
location.

Mr. Martin has been Senior Vice President, DeQueen, Arkansas Complex Manager,
of the Company since April 1993.  He previously served as Plant Manager at the
Company's Lufkin, Texas operations and Vice President, Processing, at the
Company's Mt. Pleasant, Texas, operations up to April 1993. He has served in 
various other operating management positions in the Arkansas Complex since 
September 1981.  Prior to that he was employed by Mountaire 
Corporation of DeQueen, Arkansas, until it was acquired by the Company in 
September 1981.

Dr. Miner, Ph.D., has been Senior Vice President, Technical Services, since
April 1994.  He has been employed by the Company and its predecessor
partnership since 1966 and previously served as Senior Vice President
responsible for live production and feed nutrition. He has been a Director
since the incorporation of the Company in 1968.

Mr. Murray has been Senior Vice President, Sales & Marketing, for Prepared Foods
since October 1994.  He previously served as Vice President of Sales and
Marketing, Food Service since August 1993.  From 1990 to July 1993, he was
employed by Cargill, Inc.  Prior to that, from March 1987 to 1990 he was
employed by Pilgrim's Pride as a Vice President for sales and marketing 
and prior prior thereto, he was employed by Tyson Foods, Inc.
 
Mr. Palm has been Senior Vice President, Lufkin, Texas, Complex Manager of the
Company, since June 1985 and was previously employed in various operating 
management positions by Plus-Tex Poultry, Inc., a Lufkin, Texas based company
acquired by Pilgrim's Pride in June 1985.


I
tem 2.         Properties

Production and Facilities
  Breeding and Hatching
  The Company supplies all of its domestic chicks by producing its own
hatching eggs from domestic breeder flocks owned by the Company, approximately
38% of which are maintained on 38 Company-operated breeder farms.  The Company
currently owns or contracts for approximately 6.8 million square feet of
breeder housing on approximately 198 breeder farms.  In Mexico, all of the
Company's breeder flocks are maintained on Company-owned farms.

  The Company owns six hatcheries in the United States, located in Nacogdoches
and Pittsburg, Texas, and DeQueen and Nashville, Arkansas, where eggs are
incubated and hatched in a process requiring 21 days.  Once hatched, the day-
old chicks are inspected and vaccinated against common poultry diseases and
transported by Company vehicles to grow-out farms.  The Company's six domestic
hatcheries have an aggregate production capacity of approximately 6.7 million
chicks per week.  In Mexico, the Company owns seven hatcheries, which have an
aggregate production capacity of approximately 3.9 million chicks per week.

  Grow-out
  The Company places its domestically grown chicks on approximately 887 grow-out
farms located in Texas and Arkansas.  These farms provide the Company with
approximately 43 million square feet of growing facilities.  The Company
operates 32 grow-out farms which account for approximately 10% of its total
annual domestic chicken capacity.  The Company also places chicks with farms
owned by affiliates of the Company under grow-out contracts.  The remaining
chicks are placed with independent farms under grow-out contracts.  Under such
grow-out contracts, the farmers provide the facilities, utilities and labor. 
The Company supplies the chicks, the feed and all veterinary and technical
services.  Contract grow-out farmers are paid based on live weight under an
incentive arrangement.  In Mexico, the Company owns approximately 38% of its
grow-out farms and contracts with independent farmers for the balance of its
production.  Arrangements with independent farmers in Mexico are similar to the
Company's arrangements with contractors in the United States.

  Feed Mills
  An important factor in the production of chicken is the rate at which feed
is converted into body weight.  The Company purchases feed ingredients on the
open market.  The primary feed ingredients include corn, milo and soybean meal,
which historically have been the largest component of the Company's total
production cost.  The quality and composition of the feed is critical to the
conversion rate, and accordingly, the Company formulates and produces its own
feed.  Domestically, the Company operates five feed mills located in
Nacogdoches and Pittsburg, Texas and Nashville and Hope, Arkansas.  The Company
currently has annual domestic feed requirements of approximately 1.7 million
tons and the capacity to produce approximately 2.1 million tons.  The Company
owns four feed mills in Mexico which produce all of the requirements of its
Mexican operations.  Mexican feed requirements are approximately .5 million
tons with a capacity to produce approximately 1.1 million tons.  In fiscal
1995, approximately 55% of the grain used was imported from the United States. 
However, this percentage fluctuates based on the availability and cost of local
grain supplies.

  Feed grains are commodities subject to volatile price changes caused by
weather, size of harvest, transportation and storage costs and the agricultural
policies of the United States and foreign governments.  Although the Company
can and sometimes does purchase grain in forward markets, it cannot eliminate
the potential adverse effect of grain price increases.

  Processing
  Once the chickens reach processing weight, they are transported in the
Company's trucks to the Company's processing plants.  These plants utilize
modern, highly automated equipment to process and package the chickens.  The
Company periodically reviews possible application of new processing
technologies in order to enhance productivity and reduce costs.  The Company's
five domestic processing plants, two of which are located in Mt. Pleasant,
Texas, and the remainder of which are located in Dallas and Lufkin, Texas, and
DeQueen, Arkansas, have the capacity, under present U.S.D.A. inspection
procedures, to produce approximately 1 billion pounds of dressed chicken
annually.  The Company's three processing plants located in Mexico, which
perform fewer processing functions than the Company's U.S. facilities, have the
capacity to process approximately 650 million pounds of dressed chicken
annually.  

  Prepared Foods Plant
  The Company's prepared foods plant in Mt. Pleasant, Texas, was constructed
in 1986 and expanded in 1987.  This facility has deboning lines, marination
systems, batter/breading systems, fryers, ovens, both mechanical and cryogenic
freezers, a variety of packaging systems and cold storage.  This plant is
currently operating at the equivalent of two shifts a day for six days a week. 
If necessary, the Company could add additional shifts during the remaining days
of the week.

  Egg Production
  The Company produces eggs at three farms near Pittsburg, Texas.  One farm is
owned by the Company, while two farms are operated under contract by an entity
owned by a major stockholder of the Company.  The eggs are cleaned, sized,
graded and packaged for shipment at processing facilities located on the egg
farms.  The farms have a housing capacity for approximately 2.3 million
producing hens and are currently housing approximately 2.0 million hens.  

  Other Facilities and Information
  The Company operates a rendering plant located in Mt. Pleasant, Texas, that
currently processes by-products from approximately 2.0 million chickens daily
into protein products, which are used in the manufacture of chicken and
livestock feed and pet foods.  The Company operates a feed supply store in
Pittsburg, Texas, from which it sells various bulk and sacked livestock feed
products.  The Company owns an office building in Pittsburg, Texas, which
houses its executive offices, and an office building in Mexico City, which
houses the Company's Mexican marketing offices.  The Company also owns
approximately 16,000 acres of farmland previously used in the Company's non-
poultry farming operations.  The Company is currently in the process of
disposing of such land and related assets.

  Substantially all of the Company's property, plant and equipment is pledged
as collateral on its secured debt.



Item 3. Legal Proceedings

  From time to time the Company is named as a defendant or co-defendant in
lawsuits arising in the course of its business.  The Company does not believe
that such pending lawsuits will have a material adverse impact on the Company.



Item 4. Submission of Matters to a Vote of Security Holders

      NOT APPLICABLE


Part II



Item 5. Market for the Registrant's Common Stock and Related Security Holder
        Matters

  Quarterly Stock Prices and Dividends
  High and low sales prices and dividends were:

             Prices          Prices
              1995            1994         Dividends
Quarter   High     Low    High     Low    1995   1994
  
First   $10 3/8  $9 3/8  $8 1/4  $6 5/8  $.015  $.015
Second    9 3/4   7 3/4   9 1/4   6 5/8   .015   .015
Third     8 3/8   7 1/2   9       6 3/8   .015   .015
Fourth    8 3/4   7 5/8   9 5/8   7 1/4   .015   .015
  

  The Company's stock is traded on the New York Stock Exchange (ticker symbol
CHX).  The Company estimates there were approximately 12,500 holders (including
individual participants in security position listings) of the Company's common
stock as of December 19, 1995.

S E L E C T E D   F I N A N C I A L   D A T A
Pilgrim's Pride Corporation and Subsidiaries
        
                                        Years Ended 
               1995     1994    1993(a)    1992(b)     1991     1990    1989 
                           (in thousands, except per share data)   
OPERATING RESULTS SUMMARY:    
  Net sales  $931,806 $922,609  $887,843   $817,361  $786,651 $720,555 $661,077
  Gross 
   margin      74,144  110,827   106,036(c)  32,802(c) 75,567   74,190   83,356
  Operating 
   income 
   (loss)      24,930   59,698(d) 56,345(d) (13,475)   31,039   33,379   47,014
  Income (loss) 
   before income 
   taxes and 
   extraordinary 
   charge       2,091   42,448    32,838    (33,712)   12,235   20,463   31,027
  Income tax 
   expense 
   (benefit)   10,058   11,390    10,543     (4,048)      (59)   4,826   10,745
  Income (loss) 
   before 
   extraordinary  
   charge      (7,967)  31,058    22,295    (29,664)   12,294   15,637   20,282
  Extraordinary 
   charge - early 
   repayment of 
   debt, net of 
   tax              -        -    (1,286)         -         -        -       -
  Net income 
   (loss)      (7,967)  31,058    21,009    (29,664)   12,294   15,637   20,282 

PER COMMON SHARE DATA:    
  Income (loss) before 
   extraordinary 
   charge     $ (0.29)  $ 1.13   $  0.81    $ (1.24)   $ 0.54   $ 0.69  $  0.90
  Extraordinary 
   charge - early
   repayment of 
   debt             -        -     (0.05)         -         -        -        -
  Net income 
   (loss)       (0.29)    1.13      0.76      (1.24)     0.54     0.69     0.90
  Cash 
   dividends     0.06     0.06      0.03       0.06      0.06     0.06     0.06
  Book value(e)  5.51     5.86      4.80       4.06      4.97     4.49     3.86

BALANCE SHEET SUMMARY:                         
  Working 
   capital   $ 88,395 $ 99,724  $ 72,688   $ 11,227  $ 44,882 $ 54,161 $ 60,313
 Total assets 497,604  438,683   422,846    434,566   428,090  379,694  291,102
  Short-term 
   debt        18,187    4,493    25,643     86,424    44,756   30,351    9,528
  Long-term debt, 
   less current 
   maturities 182,988  152,631   159,554    131,534   175,776  154,277  109,412
  Total 
   stockholders' 
   equity     152,074  161,696   132,293    112,112   112,353  101,414   87,132

KEY INDICATORS (As a percent of sales):                      
  Gross Margin  8.0 %   12.0 %    11.9 %(c) 4.0 %(c)    9.6 %   10.3 %    12.6 %
  Selling, 
   general and
   administrative 
   expenses     5.3 %    5.5 %(d)  5.6 %(c)  5.7 %(c)   5.7 %    5.7 %     5.5 %
                                        (d)
  Operating 
   income 
   (loss)       2.7 %    6.5 %(d)  6.3 %(d)  (1.6)%     3.9 %    4.6 %     7.1 %
  Net interest 
   expense      1.9 %    2.1 %     2.9 %      2.8 %     2.5 %     2.3 %    2.7 %
  Net income 
   (loss)      (0.9)%    3.4 %     2.4 %     (3.6)%     1.6 %     2.2 %    3.1 %
      
(a) 1993 had 53 weeks.
(b) During 1992, the Company changed the fiscal year-end of its Mexican
    subsidiaries from August to September to coincide with that of its
    domestic operations.  1992 operating results included the operations of
    the Mexican subsidiaries for the twelve months ended September 26, 1992. 
    Operating results for the Mexican subsidiaries during the month of
    September, 1991 have been reflected as a direct addition to
    stockholders' equity.
(c) Reflects reclassification of certain expenses from selling, general and
    administrative to cost of sales of $4.2 million and $1.8 million in 1993
    and 1992, respectively.  
  (See Note A to the Consolidated Financial Statements).
(d) Reflects reclassification of foreign exchange (gain) losses from
    selling, general and administrative to a separate component of other
    expenses (income).  (See Note A 
  to the Consolidated Financial Statements).
(e) Amounts are based on end-of-period shares of common stock outstanding.

Item 7. Management's Discussion and Analysis of Results of Operations and
        Financial Condition

GENERAL
The profitability of the chicken industry is affected by market prices of
chicken and feed grains, both of which may fluctuate significantly and exhibit
cyclical characteristics.  In an effort to reduce price volatility and to
generate higher, more consistent profit margins, the Company has concentrated
on the production and marketing of prepared food products, which generally have
higher margins than the Company's other products.  This concentration has
resulted in an increase in sales of prepared food products as a percentage of
total domestic net sales from 28.3% in fiscal 1990 to 36.4% in fiscal 1995. 
Management believes that sales of prepared food products will become a larger
component of its total chicken sales and, accordingly, changes in market prices
for chicken and feed costs should have less impact on profitability.

RESULTS OF OPERATIONS
Fiscal 1995 Compared to Fiscal 1994:
Consolidated net sales were $931.8 million for fiscal 1995, an increase of $9.2 
million, or 1.0%, over fiscal 1994.  The increase in consolidated net sales
resulted from a $36.0 million increase in domestic chicken sales to $671.1
million and a $2.5 million increase in sales of other domestic products to
$101.2 million offset partially by a $29.3 million decrease in Mexican chicken
sales to $159.5 million.  The increase in domestic chicken sales was due
primarily to a 3.6% increase in dressed pounds produced and a 2.0% increase in
the total revenue per dressed pound produced.   The decrease in Mexican chicken
sales resulted from a 21.9% decrease in the total revenue per dressed pound
produced caused primarily by the devaluation of the Mexican peso, offset by an
8.1% increase in dressed pounds produced.  See Impact of Mexican Peso
Devaluation discussed below.

Consolidated cost of sales was $857.7 million in fiscal 1995, an increase of
$45.9 million, or 5.7%, over fiscal 1994.  The increase primarily resulted from
a $39.2 million increase in cost of sales of domestic operations and a $6.7
million increase in the cost of sales from Mexican operations.  

The cost of sales increase in domestic operations of $39.2 million was due
primarily to a 3.6% increase in dressed pounds produced and increased
production of higher margin products in prepared foods, offset partially by a
6.1% decrease in feed ingredient cost.  While average feed costs were lower in
fiscal 1995 than the previous year, subsequent to year end feed costs have
increased substantially due to lower crop yields in the 1995 harvest  season. 
Due to the commodity nature of feed there can be no assurance as to future feed
costs.

The $6.7 million cost of sales increase in Mexican operations was due primarily
to an 8.1% increase in dressed pounds produced offset partially by a 3.6%
decrease in average cost of sales per dressed pound resulting from the
devaluation of the Mexican peso.  See Impact of Peso Devaluation discussed
below.

Gross profit as a percentage of sales decreased to 8.0% in fiscal 1995 from 12%
in fiscal 1994.  The decreased gross profit resulted mainly from the Company's
Mexican operations and was primarily the result of the Mexican peso devaluation
having a greater effect on selling prices than on cost of sales, due primarily
to the dollar based characteristics of grain prices, which is a major component
of cost of goods sold.

Consolidated selling, general and administrative expenses were $49.2 million
for fiscal 1995, a decrease of $1.9 million, or 3.7%, when compared to fiscal
1994.  Consolidated selling, general and administrative expenses as a
percentage of sales decreased in fiscal 1995 to 5.3% from 5.5% in fiscal 1994.
 
Consolidated operating income for fiscal 1995 was $24.9 million compared to
$59.7 million in fiscal 1994.  The decrease was due primarily to lower margins
in Mexican chicken operations which resulted primarily from the effects of the
Mexican peso devaluation as described previously.

Consolidated net interest expense was $17.5 million in fiscal 1995, a decrease
of $1.7 million, or 8.8%, when compared to fiscal 1994.  This decrease was due
to lower average amounts of outstanding debt when compared to fiscal 1994.

Consolidated income tax expense decreased to $10.1 million in fiscal 1995
compared to $11.4 million in fiscal 1994.  The high effective tax rate is due
to the Company having positive taxable income in the United States offset by
losses in Mexico which result in no current tax benefit under current Mexican
tax laws.

Fiscal 1994 Compared to Fiscal 1993:
The Company's accounting cycle resulted in 52 weeks of operations in fiscal
1994 and 53 weeks in fiscal 1993.

Consolidated net sales were $922.6 million for fiscal 1994, an increase of
$34.8  million, or 3.9%, over fiscal 1993.  The increase in consolidated net
sales resulted from a $35.2 million increase in domestic chicken sales to
$635.2 million,  partially offset by a $.4 million decrease in sales of other
domestic products to $98.7 million. Mexican chicken sales remained constant at
$188.7 million.  The increase in domestic chicken sales was primarily due to a
3.9% increase in the total revenue per dressed pound produced and a 1.9%
increase in dressed pounds produced.  The constant Mexican chicken sales
resulted from a 2.4% increase in dressed pounds produced offset by a 2.3%
decrease in the total revenue per dressed pound produced.

Consolidated cost of sales was $811.8 million in fiscal 1994, an increase of
$30.0 million, or 3.8%, over fiscal 1993.  The increase primarily resulted from
a $35.2 million increase in cost of 
sales of domestic operations offset by a $5.2 million decrease in the cost of
sales from Mexican operations.  

The cost of sales increase in domestic operations of $35.2 million was
primarily due to a 5.7% increase in feed ingredient cost and a 1.9% increase in
dressed pounds produced.

The cost of sales decrease in Mexican operations of $5.2 million was primarily
the result of  a decrease in the average cost of sales per dressed pound
produced, offset by a 2.4% increase in dressed pounds produced.  The decrease
in the average cost of sales per dressed pound produced when compared to the
same period in 1993 was due to lower live production costs due to increased
efficiencies.

Gross profit as a percentage of sales increased to 12.0% in fiscal 1994 from
11.9% in fiscal 1993.  The improved gross profit resulted primarily from
increased gross profit in the Company's domestic chicken operations resulting
primarily from increased total revenue per dressed pound.  The increase in
gross profit as a percentage of sales in Mexican chicken operations resulted
from a decrease in the average cost of sales per dressed pound produced,
resulting from reduced live production costs.

Consolidated selling, general and administrative expenses were $51.1 million
for fiscal 1994, an increase of $1.4 million, or 2.9%, when compared to fiscal
1993.  Consolidated selling, general and administrative expenses as a
percentage of sales decreased in fiscal 1994 to 5.5% from 5.6% in fiscal 1993.
 
Consolidated operating income for fiscal 1994 was $59.7 million compared to
$56.3 million in fiscal 1993.  The increase was due primarily to higher margins
in domestic and Mexican chicken operations as described previously.

Consolidated net interest expense was $19.2 million in fiscal 1994, a decrease
of $6.5 million, or 25.5%, when compared to fiscal 1993.  This decrease was due
to a reduction of  fees and expenses incurred for refinancing and lower amounts
of outstanding debt when compared to fiscal 1993.

Liquidity and Capital Resources:
Liquidity in fiscal 1995 remained strong despite operating losses in Mexico
resulting primarily from the Mexican peso devaluation which caused erosion in
most financial ratios.  The Company's working capital at September 30, 1995
decreased to $88.4 million from $99.7 million at October 1, 1994.  The current
ratio at September 30, 1995 decreased to 1.84 to 1 from 2.34 to 1 at October 1,
1994 and the Company's stockholder's equity decreased to $152.1 million at
September 30, 1995 from $161.7 million at October 1, 1994.  The Company's ratio
of total debt to capitalization increased to 56.9% at September 30, 1995 from
49.3% at October 1, 1994.  

The Company maintains a $75 million revolving credit facility with available
unused lines of credit of $51.7 million at December 1, 1995.

Trade accounts and notes receivable were $60.0 million at September 30, 1995, a
$6.8 million increase from October 1, 1994.  This 12.7% increase was due
primarily to increased domestic sales offset partially by the effects of the
Mexican peso devaluation and faster domestic collections experienced in fiscal
1995 when compared to the year ended October 1, 1994.  Allowances for doubtful
accounts, which primarily relate to receivables in Mexico, as a percentage of
trade accounts and notes receivables were 6.7% at September 30, 1995 compared
to 10.0% at October 1, 1994.  This decrease is due primarily to the effects of
the devaluation of the Mexican peso.
 
Inventories were $110.4 million at September 30, 1995, a $9.7 million increase
from October 1, 1994.  This 9.6% increase was primarily due to higher domestic
inventories resulting from increased production offset by lower Mexican
inventories caused by the Mexican peso devaluation.

Accounts payable were $55.7 million at September 30, 1995, a $17.0 million
increase from October 1, 1994, primarily due to higher production levels and
construction-in-progress from October 1, 1994.

Capital expenditures and business acquisitions for fiscal 1995 were $35.2
million and $36.2 million (of which $29.5 million was for the acquisition of
property, plant and equipment), respectively.  Capital expenditures were
primarily incurred to improve efficiencies, reduce costs and for the routine
replacement of equipment.  In fiscal 1995, the Company acquired certain assets
of Union de Queretaro, et al located in Queretaro, Mexico for approximately
$35.3 million.  See Note I to the Consolidated Financial Statements.  The
Company anticipates that it will spend approximately $45 million for capital
expenditures in fiscal year 1996 and expects to finance such expenditures with
available operating cash flow, leases and long-term financing.  Subsequent to
year-end the Company secured a $50 million long-term financing arrangement, to
be collateralized by existing and new property, plant and equipment.  The
Company intends to use this facility to finance the aforementioned capital
expenditures and to refinance certain existing long-term debt.

Cash flows provided by operating activities were $32.7 million, $60.7 million
and $45.0 million in fiscal 1995, 1994 and 1993, respectively.  The change in
cash flows provided by operating activities between the periods resulted
primarily from changes in net income.

Cash provided by (used in) financing activities was $40.2 million, $(30.3)
million and $(40.3) million in fiscal 1995, 1994 and 1993, respectively.  The
cash provided by (used in) financing 
activities primarily reflects debt retirements in fiscal 1994 and 1993 and
proceeds from notes payable and long-term financings in fiscal 1995.

The Company's deferred income taxes have resulted primarily from the Company's
change from the cash method of accounting to the accrual method of accounting
for taxable periods beginning after July 2, 1988.  The Company's deferred
income taxes arising from such change in method of accounting will continue to
be deferred as long as (i) at least 50% of the voting stock and at least 50% of
all other classes of stock of the Company continue to be owned by the Lonnie
"Bo" Pilgrim family and (ii) the Company's net sales from its agricultural
operation in a taxable year equal or exceed the Company's net sales from such
operations in its taxable year ending July 2, 1988.  Failure of the first
requirement will cause all of the deferred taxes attributable to the change in
accounting method to be due.  Failure of the second requirement will cause a
portion of such deferred taxes to be due based upon the amount of the relative
decline in net sales from the agricultural operations.  The family of Lonnie
"Bo" Pilgrim currently owns approximately 65.1% of the stock of the company. 
Management believes that likelihood of the (i) Pilgrim family ownership falling
below 50%, or (ii) gross receipts from agricultural activities falling below
the 1988 level, is remote.

Impact of Mexican Peso Devaluation:
In December 1994, the Mexican government changed its policy of defending the
peso against the U.S. dollar and allowed it to float freely on the currency
markets.  These events resulted in the Mexican peso exchange rate declining
from 3.39 to 1 U.S. dollar at October 1, 1994 to a low of 7.91 at November 15,
1995.  On December 1, 1995 the Mexican peso closed at 7.56 to 1 U.S. dollar. 
No assurance can be given as to the future valuation of the Mexican peso and
its resulting impact on the Company's operation.  Further movement in the
Mexican peso could affect future earnings positively or negatively.

Adjustments resulting from changes in currency exchange rates on net monetary
assets are reflected in the statements of operations.  Classification of the
effects in the statement of operations is dependent upon the nature of the
underlying asset and, in general, exchange rate effects on net monetary assets 
are reflected as "Other expenses (income) - Foreign exchange (gain) loss." 
During fiscal 1995, the peso's devaluation resulted in foreign exchange losses
of $5.6 million on net monetary assets.
 
Other:
In March 1995, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 121, "Accounting for the Impairment of 
Long-Lived Assets and for Long-Lived Assets to be Disposed Of."  SFAS No. 121
establishes accounting standards for the impairment of long-lived assets to be
held and used and for long-lived assets to be disposed of.  SFAS No. 121 is
scheduled to become mandatory for the Company's 1997 fiscal year.  The Company
has not determined the effect of adopting SFAS No. 121.  There will be no cash
flow impact from this accounting change.

Impact of Inflation:
Due to moderate inflation and the Company's rapid inventory turnover rate, the
results of operations have not been adversely affected by inflation during the
past three-year period.



I
tem 8. Financial Statements and Supplementary Data

  The consolidated financial statements together with the report of
independent auditors, and financial statement schedules are included on pages
34 through 51 of this document.  Financial statement schedules other than those
included herein have been omitted because the required information is contained
in the consolidated financial statements or related notes, or such information
is not applicable.



Item 9. Changes in and Disagreements with Accountants on Accounting and
        Financial Disclosure
 
  NOT APPLICABLE



PART III



Item 10. Directors and Executive Officers of Registrant

  Reference is made to "Election of Directors" on pages 3 through 5 of
Registrant's Proxy Statement for its 1995 Annual Meeting of Stockholders, which
section is incorporated herein by reference.

  Reference is made to "Compliance with Section 16(a) of the Exchange Act" on
page 9 of Registrant's Proxy Statement for its 1995 Annual Meeting of
Stockholders, which section is incorporated herein by reference.



Item 11. Executive Compensation



Item 12. Security Ownership of Certain Beneficial Owners and Management


Item 13. Certain Relationships and Related Transactions

  Information responsive to Items 11, 12 and 13 is incorporated by reference
from sections entitled "Security Ownership", "Election of Directors",
"Executive Compensation", and "Certain Transactions" of the Registrant's Proxy
Statement for its 1995 Annual Meeting of Stockholders.

Part IV



Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K

(a) (1) The financial statements listed in the accompanying index to
        financial statements and schedules are filed as part of this
        report.

  (2) The schedules listed in the accompanying index to financial
      statements and schedules are filed as part of this report.

  (3) Exhibits

2.1 Agreement and Plan of Reorganization dated September 15, 1986, by and
    among Pilgrim's Pride Corporation, A Texas corporation; Pilgrim's Pride
    Corporation, a Delaware corporation; and Doris Pilgrim Julian, Aubrey
    Hal Pilgrim, Paulette Pilgrim Rolston, Evanne Pilgrim, Lonnie "Bo"
    Pilgrim, Lonnie Ken Pilgrim, Greta Pilgrim Owens and Patrick Wayne
    Pilgrim (incorporated by reference from Exhibit 2.1 to the Company's
    Registration Statement on Form S-1 (No. 33-8805) effective November 14,
    1986).

3.1 Certificate of Incorporation of the Company (incorporated by reference
    from Exhibit 3.1 of the Company's Registration Statement on Form S-1
    (No. 33-8805) effective November 14, 1986).

3.2 By-Laws of the Company (incorporated by reference from Exhibit 3.2 to
    the Company's Registration Statement on Form S-1 (No. 33-8805) effective
    November 14, 1986).

4.1 Certificate of Incorporation of the Company (incorporated by reference
    from Exhibit 3.1 of the Company's Registration Statement on Form S-1
    (No. 33-8805) effective November 14, 1986).

4.2 By-Laws of the Company (incorporated by reference from Exhibit 3.2 of
    the Company's Registration Statement on Form S-1 (No. 33-8805) effective
    November 14, 1986).

4.3 Indenture dated as of May 1, 1988, between the Company and Mtrust
    Corporation  National Association relating to the Company's 14 1/4%
    Senior Notes Due 1995 (incorporated by reference from Exhibit 4.1 of the
    Company's Registration Statement on Form S-1 (No. 33-21057) effective
    May 2, 1988).



4.4 First Supplemental Indenture dated as of October 4, 1990, between the
    Company and Ameritrust Texas, N.A. supplementing the Indenture dated as
    of May 1, 1988, between the Company and Mtrust Corporation National
    Association relating to the Company's 14 1/4% Senior Notes Due 1995
    (incorporated by reference from Exhibit 4.4 of the Company's Form 8
    filed on July 1, 1992).

4.5 Form of 14 1/4% Senior Note Due 1995 (incorporated by reference from
    Exhibit 4.2 of the Company's Registration Statement on Form S-1 
    (No. 33-21057) effective May 2, 1988).

4.6 Specimen Certificate for shares of Common Stock, Par value $.01 per
    share, of the Company (incorporated by reference from Exhibit 4.6 of the
    Company's Form 8 filed on July 1, 1992).

4.7 Form of Indenture between the Company and Ameritrust Texas National
    Association relating to the Company's 10 7/8% Senior Subordinated Notes
    Due 2003 (incorporated by reference from Exhibit 4.6 of the Company's
    Registration Statement on Form S-1 (No. 33-59626) filed on March 16,
    1993).

4.8 Form of 10 7/8% Senior Subordinated Note Due 2003 (incorporated by
    reference from Exhibit 4.8 of the Company's Registration Statement on
    Form S-1 (No. 33-61160) filed on June 16, 1993).

10.1  Pilgrim Industries, Inc., Profit Sharing Retirement Plan, restated as of
      July 1, 1987 (incorporated by reference from Exhibit 10.1 of the
      Company's Form 8 filed on July 1, 1992).

10.2  Bonus Plan of the Company (incorporated by reference from Exhibit 10.2
      to the Company's Registration Statement on Form S-1 (No. 33-8805)
      effective November 14, 1986).

10.3  Aircraft Lease dated November 15, 1984, by and between L.A. Pilgrim
      d/b/a B.P. Leasing Company and the Company (incorporated by reference
      from Exhibit 10.5 to the Company's Registration Statement on Form S-1
      (No. 33-8805) effective November 14, 1986).

10.4  Broiler Grower Contract dated November 11, 1985, between the Company and
      Lonnie  "Bo" Pilgrim (Farm #30) (incorporated by reference from Exhibit
      10.9 to the Company's Registration Statement on Form S-1 (No. 33-8805)
      effective November 14, 1986).



10.5  Broiler Growing Agreements dated October 28, 1985, between the Company
      and Monty K. Henderson d/b/a Central Farms and Lone Oak Farms
      (incorporated by reference from Exhibit 10.11 to the Company's
      Registration Statement on Form S-1 (No. 33-8805) effective November 14,
      1986).

10.6  Broiler Growing Agreement dated March 27, 1986, between the Company and
      Clifford E. Butler (incorporated by reference from Exhibit 10.12 to the
      Company's Registration Statement on Form S-1 (No. 33-8805) effective
      November 14, 1986).

10.7  Broiler Grower Contract dated July 10, 1990 between the Company and
      James J. Miner d/b/a/ BJM Farms (incorporated by reference from Exhibit
      10.7 of the Company's Form 8 filed on July 1, 1992).

10.8  Commercial Egg Grower Contract dated July 1, 1986, between the Company
      and Pilgrim Poultry, Ltd. (incorporated by reference from exhibit 10.14
      to the Company's Registration Statement on Form S-1 (No. 33-8805)
      effective November 14, 1986).

10.9  Agreement dated November 28, 1978, by and between the Company and
      Pilgrim Poultry, Ltd. (incorporated by reference from Exhibit 10.15 to
      the Company's Registration Statement on Form S-1 (No. 33-8805) effective
      November 14, 1986).

10.10 Agreement between the Company and its Principal Shareholders dated
      October 2, 1974, as amended July 1, 1979 (incorporated by reference from
      Exhibit 10.19 to the Company's Registration Statement on Form S-1 (No.
      33-8805) effective November 14, 1986).

10.11 Note Purchase Agreement dated as of October 1, 1986, by and between the
      Company and Aetna Life Insurance Company with related Collateral Trust
      Indenture, as amended by First Supplemental Indenture dated as of
      November 1, 1986, and by letter dated September 29, 1987, Texas
      Mortgage, Arkansas Mortgage, Guarantee Agreement, as amended by First
      Amendment to Guarantee Agreement dated June 9, 1987, and Cash Pledge
      Agreement (incorporated by reference from Exhibit 10.21 of the Company's
      Registration Statement on Form S-1 (No. 33-21057) effective May 2,
      1988).

10.12 Letter Agreement dated April 26, 1988, by and among Aetna Life Insurance
      Company, The Aetna Casualty and Surety Company, The Connecticut Bank and
      Trust Company and the Company and Letter Agreement dated April 26, 1988,
      by and among Bank of America National Trust and Savings Association, The
      Connecticut Bank and Trust Company and the Company amending Note
      Purchase Agreement dated as of October 1, 1986 (incorporated by
      reference from Exhibit 10.36 of the Company's Registration Statement on
      Form S-1 (No. 33-21057) effective May 2, 1988).

10.13 Note Purchase Agreement dated as of September 21, 1990, by and among the
      Company, Aetna Life Insurance Company and Bank of America National Trust
      and Savings Association (incorporated by reference from Exhibit 10.20 of
      the Company's Form 8 filed on July 1, 1992).

10.14 Amended and Restated Collateral Trust Indenture dated as of September
      21, 1990, by and between the Company and State Street Bank and Trust
      Company of Connecticut, N.A. with related Notes, Modification Agreements
      and First Amendment to Guaranty (incorporated by reference from Exhibit
      10.21 of the Company's Form 8 filed on July 1, 1992).

10.15 Supplemental Indenture and Waiver dated as of December 9, 1991, by and
      between the Company and State Street Bank and Trust Company of
      Connecticut, N.A. with related Notes, Modification Agreements and First
      Amendment to Guaranty, Amended and Restated Collateral Trust Indenture
      dated as of September 20, 1990 (incorporated by reference from Exhibit
      10.24 of the Company's Form 10-K for the year ended September 26, 1992).

10.16 Loan Agreement dated as of August 1, 1988, by and between the Company
      and Angelina and Neches River Authority Industrial Development
      Corporation, with related Reimbursement and Credit Agreement
      (incorporated by reference from Exhibit 10.22 of the Company's Form 8
      filed on July 1, 1992).

10.17 Indenture of Trust dated as of August 1, 1988, related to Loan Agreement
      by and between the Company and Angelina and Neches River Authority
      Industrial Development Corporation, with related Bond, Irrevocable
      Letter of Credit, Deed of Trust, Security Agreement, Assignment of Rents
      and Financing Statement (incorporated by reference from Exhibit 10.23 of
      the Company's Form 8 filed on July 1, 1992).

10.18 Assumption Agreement by and between the Company, Lonnie "Bo" Pilgrim and
      RepublicBank Lufkin, as trustee, dated June 14, 1985 (incorporated by
      reference from Exhibit 10.31 to the Company's Registration Statement on
      Form S-1 (No. 33-8805) effective November 14, 1986).

10.19 Stock Purchase Agreement dated September 15, 1986, among the Company,
      Doris Pilgrim Julian, Aubrey Hal Pilgrim, Paulette Pilgrim Rolston and
      Evanne Pilgrim (incorporated by reference from Exhibit 2.2 to the
      Company's Registration Statement on Form S-1 (No. 33-8805) effective
      November 14, 1986).

10.20 Amendment No. 1 to Stock Purchase Agreement, dated as of October 31,
      1986, among the Company, Doris Pilgrim Julian, Aubrey Hal Pilgrim,
      Paulette Pilgrim Rolston and Evanne Pilgrim (incorporated by reference
      from Exhibit 2.3 to the Company's Registration Statement on Form S-1
      (No. 33-8805) effective November 14, 1986).

10.21 Limited Partnership Interest Purchase Agreement dated September 15,
      1986, by and between the Company and Doris Pilgrim Julian (incorporated
      by reference from Exhibit 2.5 to the Company's Registration Statement on
      Form S-1 (No. 33-8805) effective November 14, 1986).

10.22 Employee Stock Investment Plan of the Company (incorporated by reference
      from Exhibit 10.28 of the Company's Registration Statement on Form S-1
      (No. 33-21057) effective May 2, 1988).

10.23 Promissory Note dated February 1, 1988, by and between the Company and
      John Hancock Mutual Life Insurance Company with related Deed of Trust,
      Assignment of Rents and Security Agreement and Mortgage and Guaranty of
      Note and Mortgage (incorporated by reference from Exhibit 10.29 of the
      Company's Registration Statement on Form S-1 (No. 33-21057) effective
      May 2, 1988).

10.24 Letter from John Hancock Mutual Life Insurance Company dated April 25,
      1988, amending Deed of Trust, Assignment of Rents and Security Agreement
      dated February 1, 1988 (incorporated by reference from Exhibit 10.35 of
      the Company's Registration Statement on Form S-1 (No. 33-21057)
      effective May 2, 1988).

10.25 Promissory Note dated April 25, 1991, by and between the Company and
      John Hancock Mutual Life Insurance Company, with related Modification
      Agreement and Guaranty of Note and Mortgage (incorporated by reference
      from Exhibit 10.31 of the Company's Form 8 filed on July 1, 1992).

10.26 Stock Purchase Agreement dated May 12, 1992, between the Company and
      Archer Daniels Midland Company (incorporated by reference from Exhibit
      10.45 of the Company's Form 10-K for the year ended September 26, 1992).

10.27 Promissory Note dated September 21, 1988, by and between the Company and
      Charles Schreiner Bank, with related Warranty Deed with Vendor's Lien
      and Deed of Trust and Security Agreement (incorporated by reference from
      Exhibit 10.40 of the Company's Form 8 filed on July 1, 1992).

10.28 Promissory Note dated November 1, 1988, by and between the Company and
      The Connecticut Mutual Life Insurance Company, with related Deed of
      Trust (incorporated by reference from Exhibit 10.41 of the Company's
      Form 8 filed on July 1, 1992).

10.29 Promissory Note dated September 20, 1990, by and between the Company and
      Hibernia National Bank of Texas (incorporated by reference from Exhibit
      10.42 of the Company's Form 8 filed on July 1, 1992).

10.30 Loan Agreement dated October 16, 1990, by and among the Company, Lonnie
      "Bo" Pilgrim and North Texas Production Credit Association, with related
      Variable Rate Term Promissory Note and Deed of Trust (incorporated by
      reference from Exhibit 10.43 of the Company's Form 8 filed on July 1,
      1992).

10.31 Secured Credit Agreement dated May 27, 1993, by and among the Company
      and Harris Trust and Savings Bank, and FBS AG Credit, Inc.,
      Internationale Nederlanden Bank, N.V., Boatmen's First National Bank of
      Kansas City, and First Interstate Bank of Texas, N.A. (incorporated by
      reference from Exhibit 10.31 of the Company's Registration Statement on
      Form S-1 (No. 33-61160) filed on June 16, 1993).

10.32 Loan and Security Agreement dated as of June 3, 1993, by and among the
      Company, the banks party thereto and Creditanstalt-Bankverein, as agent
      (incorporated by reference from Exhibit 10.32 of the Company's
      Registration Statement on Form S-1 (No. 33-61160) filed on June 16,
      1993). 

10.33 First Amendment to Secured Credit Agreement dated June 30, 1994 to the
      Secured Credit Agreement dated May 27, 1993, by and among the Company
      and Harris Trust and Savings Bank, and FBS AG Credit, Inc.,
      Internationale Nederlanden Bank N.V., Boatman's First National Bank of
      Kansas City and First Interstate Bank of Texas, N.A.

10.34 Amended and Restated Loan and Security Agreement date July 29, 1994, by
      and among the Company, the banks party thereto and Creditanstalt-
      Bankverein, as agent.

10.35 Supplemental Indenture dated October 2, 1994, by and between the Company
      and State Street Bank and Trust Company of Connecticut, N.A., and
      Guarantee Agreement, as amended by Second Amendment to Guarantee
      Agreement dated October 2, 1994.

10.36 Second Amendment to Secured Credit Agreement dated December 6, 1994 to
      the Secured Credit Agreement dated May 27, 1993, by and among the
      Company and Harris Trust and Savings Bank, and FBS AG Credit, Inc.,
      Internationale Nederlanden Bank N.V., Boatman's First National Bank of
      Kansas City and First Interstate Bank of Texas, N.A.

10.37 Third Amendment to Secured Credit Agreement dated June 30, 1995 to the
      Secured Credit Agreement dated May 27, 1993, by and among the Company
      and Harris Trust and Savings Bank, and FBS AG Credit, Inc.,
      Internationale Nederlanden Bank N.V., Boatman's First National Bank of
      Kansas City and First Interstate Bank of Texas, N.A.

10.38 Second Amended and Restated Loan and Security Agreement dated July 31,
      1995, by and among the Company, the banks party thereto and
      Creditanstalt-Bankverein, as agent.

10.39 Revolving Credit Loan Agreement dated March 27, 1995 by and among the
      Company and Agricultural Production Credit Association.

10.40 First Supplement to Revolving Credit Loan Agreement dated July 6, 1995
      by and among the Company and Agricultural Production Credit Association.

22. Subsidiaries of Registrant.* 

23. Consent of Ernst & Young LLP.*

27. Financial Data Statement.
* Filed herewith

  Pursuant to Item 601(b)(4)(iii)(A) of Regulation S-K promulgated by the
Securities and Exchange Commission, the Company has not filed as exhibits
certain other instruments defining the rights of holders of long-term debt of
the Company which instruments do not pertain to indebtedness in excess of 10%
of the total assets of the Company.  The Company hereby agrees to furnish
copies of such instruments to the Securities and Exchange Commission upon
request.

(b) Reports on Form 8-K

  NOT APPLICABLESIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the issuer has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized on the 20th day of December 1995.

    PILGRIM'S PRIDE CORPORATION



    By: 
    Clifford E. Butler
    Vice Chairman of the Board and 
    Chief Financial Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dated indicated.

  Signature                         Title             Date


                             Chairman of the Board    12/20/95
Lonnie "Bo" Pilgrim          of Directors and Chief 
                             Executive Officer 
                             (Principal Executive
                             Officer)


                             Vice Chairman of the     12/20/95
Clifford E. Butler           Board of Directors, 
                             Chief Financial Officer,
                             Secretary and Treasurer (Principal 
                             Financial and Accounting Officer)


                             President and            12/20/95
Lindy M. "Buddy" Pilgrim     Chief Operating Officer and
                             Director


                             Executive Vice President 12/20/95
Robert L. Hendrix            Operations and 
                             Director


                             Senior Vice President    12/20/95
James J. Miner               Technical Services and
                             Director


                             Vice President and       12/20/95
Lonnie Ken Pilgrim           Director


                             Director                 12/20/95
Charles L. Black


                             Director                 12/20/95
Robert E. Hilgenfeld


                             Director                 12/20/95
Vance C. Miller 


                             Director                 12/20/95
James J. Vetter, Jr.


                             Director                 12/20/95
Donald L. Wass  



REPORT OF INDEPENDENT AUDITORS

Stockholders and Board of Directors
Pilgrim's Pride Corporation

We have audited the accompanying consolidated balance sheets of Pilgrim's Pride
Corporation and subsidiaries as of September 30, 1995 and October 1, 1994, and
the related consolidated statements of income (loss), stockholders' equity, and
cash flows for each of the three years in the period ended September 30, 1995. 
Our audits also included the financial statement schedule listed on the Index
as item 14(a).  These financial statements and schedule are the 
responsibility of the Company's management.  Our responsibility is to express an
opinion on these financial statements and schedule based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards.  Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement.  An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial  statements.  An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation.  We believe that our audits provide a reasonable basis
for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the consolidated financial position of Pilgrim's Pride
Corporation and subsidiaries at September 30, 1995 and October 1, 1994, and the
consolidated results of their operations and their cash flows for each of the
three years in the period ended September 30, 1995 in conformity with generally
accepted accounting principles. Also, in our opinion, the related financial
statement schedule, when considered in relation to the basic financial
statements taken as a whole, presents fairly in all material respects the
information set forth therein.


                                                  ERNST & YOUNG LLP


2121 San Jacinto Street
Dallas, Texas
November 6, 1995




C O N S O L I D A T E D   B A L A N C E   S H E E T S
Pilgrim's Pride Corporation and Subsidiaries

                              

                                             September   October
                                             30, 1995    1, 1994  
                                                (in thousands) 
ASSETS
    
CURRENT ASSETS     
  Cash and cash equivalents                   $ 11,892  $ 11,244
  Trade accounts and other receivables, 
   less allowance for doubtful accounts         60,031    53,264
  Inventories                                  110,404   100,749
  Deferred income taxes                          9,564     6,459
  Prepaid expenses                                 526     1,280
  Other current assets                             953     1,249
    TOTAL CURRENT ASSETS                       193,370   174,245

OTHER ASSETS                                    20,918    20,891

PROPERTY, PLANT AND EQUIPMENT                 
  Land                                          17,637    15,153
  Buildings, machinery and equipment           383,076   332,289
  Autos and trucks                              32,227    27,457
  Construction-in-progress                       9,841     4,853
                                               442,781   379,752
  Less accumulated depreciation                159,465   136,205
                                               283,316   243,547
                                            $  497,604 $ 438,683

LIABILITIES AND STOCKHOLDERS' EQUITY       

CURRENT LIABILITIES       
  Notes payable to banks                    $   13,000 $       -
  Accounts payable                              55,658    38,675
  Accrued expenses                              31,130    31,353
  Current maturities of long-term debt           5,187     4,493
    TOTAL CURRENT LIABILITIES                  104,975    74,521

LONG-TERM DEBT, less current maturities        182,988   152,631

DEFERRED INCOME TAXES                           56,725    49,835

MINORITY INTEREST IN SUBSIDIARY                    842         -

STOCKHOLDERS' EQUITY
  Preferred stock, $.01 par value,
   authorized 5,000,000 shares; none issued          -         -
  Common stock, $.01 par value,
   authorized 45,000,000 shares;      
   27,589,250 issued and outstanding 
   in 1995 and 1994                                276       276
  Additional paid-in capital                    79,763    79,763
  Retained earnings                             72,035    81,657

    TOTAL STOCKHOLDERS' EQUITY                 152,074   161,696

COMMITMENTS AND CONTINGENCIES                        -         -
                                            $  497,604 $ 438,683
See Notes to Consolidated Financial Statements


C O N S O L I D A T E D   S T A T E M E N T S   O F   I N C O M E   ( L O S S )
Pilgrim's Pride Corporation and Subsidiaries

                              
      
                                                 Years Ended       
                                        September  October    October
                                        30, 1995   1, 1994    2, 1993  
                                       (52 weeks) (52 weeks) (53 weeks)     
                                    (in thousands, except per share data)

Net sales                              $ 931,806  $ 922,609  $ 887,843

Costs and expenses:           
   Cost of sales                         857,662   811,782     781,807 
   Selling, general and administrative    49,214    51,129      49,691 
                                         906,876   862,911     831,498 
      OPERATING INCOME                    24,930    59,698      56,345 
Other expenses (income):            
   Interest expense, net                  17,483    19,173      25,719 
   Foreign exchange (gain) loss            5,605      (257)        243 
   Miscellaneous, net                       (249)   (1,666)     (2,455)
                                          22,839    17,250      23,507 
Income before income taxes and 
 extraordinary charge                      2,091    42,448      32,838 
Income tax expense                        10,058    11,390      10,543 
Net income (loss) before  
 extraordinary charge                     (7,967)   31,058      22,295 
Extraordinary charge-early repayment 
 of debt, net of tax                           -         -      (1,286)
           
      NET INCOME (LOSS)                 $ (7,967) $ 31,058    $ 21,009 
           
           
Net income (loss) per common share 
 before extraordinary charge            $  (0.29) $   1.13    $   0.81 
Extraordinary charge per common share          -         -       (0.05)
Net income (loss) per common share      $  (0.29) $   1.13    $   0.76 

See Notes to Consolidated Financial Statements.


C O N S O L I D A T E D   S T A T E M E N T S   O F   S T O C K H O L D E R S '
E Q U I T Y
Pilgrim's Pride Corporation and Subsidiaries

                 

                                   Number         Additional     
                                     of    Common   Paid-in   Retained      
                                   Shares   Stock   Capital   Earnings  Total
                                (dollars in thousands, except per share data)
Balance at September 26, 1992   27,589,250   $276   $79,763   $32,073 $112,112 
                   
  Net income for year                                          21,009   21,009 
  Cash dividends declared ($0.03 per share)                      (828)    (828)
                   
Balance at October 2, 1993      27,589,250    276    79,763    52,254   132,293 
                   
  Net income for year                                          31,058    31,058 
  Cash dividends declared ($0.06 per share)                    (1,655)  (1,655)

Balance at October 1, 1994       27,589,250    276    79,763   81,657   161,696 
  
  Net loss for year                                            (7,967)   (7,967)
  Cash dividends declared ($.06 per share)                     (1,655)   (1,655)
  
Balance at September 30, 1995    27,589,250   $276   $79,763  $72,035  $152,074


See Notes to Consolidated Financial Statements.
    


C O N S O L I D A T E D   S T A T E M E N T S   O F   C A S H   F L O W S
Pilgrim's Pride Corporation and Subsidiaries

                            

                                                    Years Ended
                                        September     October       October
                                         30, 1995     1, 1994       2, 1993 
                                        (52 weeks)   (52 weeks)    (53 weeks) 
                                                   (in thousands)
Cash Flows From Operating Activities:          
Net income (loss)                       $  (7,967) $   31,058   $   21,009    
Adjustments to reconcile net income (loss) to cash 
  provided by operating activities:          
  Depreciation and amortization            26,127      25,177       26,034 
  Gain on property disposals                 (263)       (608)      (2,187)
  Provision for doubtful accounts           1,133       2,666        2,124 
  Deferred income taxes                     3,785       6,720        5,028 
  Extraordinary charge                          -           -        1,904 

Changes in operating assets and liabilities:                               
  Accounts and other receivables           (3,370)       3,412      (6,555)
  Inventories                              (4,336)      (8,955)     (2,366)
  Prepaid expenses                          1,066         (459)      4,175 
  Accounts payable and accrued expenses    15,249        1,742      (4,168)
  Other                                     1,288          (89)        (28)
Net Cash Flows Provided by 
  Operating Activities                     32,712       60,664      44,970

Investing Activities:                        
  Acquisitions of property, plant 
    and equipment                         (35,194)     (25,547)    (15,201)
    Business acquisitions - property, 
      plant and equipment                 (29,519)           -           - 
                          - other net 
                            assets         (6,659)           -           - 
  Proceeds from property disposal             541        2,103       2,977 
  Other, net                                 (758)        (128)        713 
Net Cash Used in Investing Activities     (71,589)     (23,572)    (11,511)

Financing Activities:           
  Proceeds from notes payable to banks     15,000        7,000      28,419 
  Repayments on notes payable to banks     (2,000)     (19,000)    (81,398)
  Proceeds from long-term debt             45,030           31     126,468 
  Payments on long-term debt              (16,202)     (16,253)   (106,302)
  Cost of refinancing debt                      -            -      (5,510)
  Extraordinary charge, cash items              -            -      (1,188)
  Cash dividends paid                      (1,655)      (2,069)       (828)
Cash Provided by (Used in) Financing 
  Activities                               40,173      (30,291)    (40,339)

Effect of exchange rate changes on 
  cash and cash equivalents                  (648)         (83)       (144)
Increase (decrease) in cash and cash 
  equivalents                                 648        6,718      (7,024)
Cash and cash equivalents at beginning 
  of year                                  11,244        4,526      11,550 
Cash and cash equivalents at end 
  of year                               $  11,892    $  11,244    $  4,526 

Supplemental disclosure information:            
  Cash paid during the year for:                                      
    Interest (net of amount 
      capitalized)                      $ 16,764     $  19,572    $  23,015 
    Income taxes                        $  5,128     $   7,108    $   3,688 

See Notes to Consolidated Financial Statements.


N O T E S   T O   C O N S O L I D A T E D    F I N A N C I A L   
S T A T E M E N T S
Pilgrim's Pride Corporation and Subsidiaries


NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Principles of Consolidation:  The consolidated financial statements include the
accounts of Pilgrim's Pride Corporation and its wholly owned subsidiaries (the
"Company").  Significant intercompany accounts and transactions have been
eliminated.  

The financial statements of the Company's Mexican subsidiaries are remeasured
as if the U.S. dollar were the functional currency.  Accordingly, assets and
liabilities of the Mexican subsidiaries are translated at end-of-period
exchange rates, except for non-monetary assets which are translated at
equivalent dollar costs at dates of acquisition using historical rates. 
Operations are translated at average exchange rates in effect during the
period.  Foreign exchange (gains) losses are separately stated as components of
"Other expenses (income)" in the Consolidated Statement of Income (Loss).  The
amounts for 1994 and 1993 were previously classified as components of "Costs
and expenses - Selling, general and administrative" in the Consolidated
Statement of Income (Loss), but have been reclassified to conform with the 1995
classification.

During the fourth quarter of fiscal 1994 the Company reclassified certain
expenses of its Mexican subsidiaries to conform to the classification in the
United States.  The effect of this change was to decrease selling, general and
administrative expense and increase cost of sales  by $4.2 million in 1993.

Cash Equivalents:  The Company considers highly liquid investments with a matu-
rity of three months or less when purchased to be cash equivalents.

Accounts Receivable:  The Company does not believe it has significant
concentrations of credit risk in its accounts receivable, which are generally
unsecured.  Credit evaluations are performed on all significant customers and
updated as circumstances dictate. Allowances for doubtful accounts were $4.3
million and $5.9 million in 1995 and 1994, respectively.

Inventories:  Live chicken inventories are stated at the lower of cost or
market and hens at the lower of cost, less accumulated amortization, or market. 
The costs associated with hens are accumulated up to the production stage and
amortized over the productive lives using the straight-line method.  Finished
chicken products, feed, eggs and other inventories are stated at the lower of
cost (first-in, first-out method) or market.  Occasionally, the Company hedges
a portion of its purchases of major feed ingredients using futures contracts to
minimize the risk of adverse price fluctuations.  Gains and losses on the hedge
transactions are deferred and recognized as a component of cost of sales when
products are sold.

Property, Plant and Equipment:  Property, plant and equipment is stated at
cost.  For financial reporting purposes, depreciation is computed using the
straight-line method over the estimated useful lives of these assets. 
Depreciation expense was $24.8 million, $23.7 million and $23.4 million in
1995, 1994 and 1993, respectively.

Net Income (Loss) per Common Share:  Net income (loss) per share is based on
the weighted average shares of common stock outstanding during the year.  The
weighted average number of shares outstanding was 27,589,250 in all periods.

NOTE B - INVENTORIES
Inventories consist of the following:

                         September 30,   October 1,
                             1995           1994  
                               (in thousands)

Live chickens and hens    $  55,353     $  47,743
Feed, eggs and other         32,087        22,529
Finished chicken products    22,964        30,477
                          $ 110,404     $ 100,749

NOTE C - NOTES  PAYABLE AND LONG-TERM DEBT
The Company maintains a $75 million credit facility with various banks
providing short-term lines of credit at interest rates of approximately one and
one-eighth percent above LIBOR and, at September 30, 1995, availability under
these lines totaled $49.5 million.  Inventories and trade accounts receivable
of the Company are pledged as collateral on this facility.  The fair value of
the Company's long-term debt was estimated using quoted market prices, where 
available.  For long-term debt not actively traded, fair values were estimated
using discounted cash flow analysis using current market rates for similar
types of borrowings.  For certain debt instruments recently  issued or
modified, including the credit facility,  the Company believes that their
carrying amounts approximate fair value at September 30, 1995 and October 1,
1994.

The table below sets forth maturities on long-term debt during the next five
years.



                        Year   Amount  
                       (in thousands) 

                       1996      7,187
                       1997     10,913
                       1998     11,656
                       1999     11,704
                       2000     25,512

During 1993, the Company retired certain debt prior to their scheduled
maturities.  These repayments resulted in an extraordinary charge of $1.3
million, net of $.6 million tax benefit.  

The Company is required, by certain provisions of its debt agreements, to
maintain minimum levels of working capital and net worth, to limit dividends to
a maximum of $1.7 million per year, to maintain various fixed charge, leverage,
current and debt-to-equity ratios, and to limit annual capital expenditures. 

Total interest during 1995, 1994 and 1993 was $19.1 million, $20.1 million and
$26.4 million, respectively.  Interest related to new construction capitalized
in 1995, 1994 and 1993 was $.6 million, $.5 million and $.2 million,
respectively.

<PAGE>

Long-term debt and the related fair values consist of the following:

                                         September 30, 1995  October 1, 1994   
                                           Carrying   Fair   Carrying   Fair
                                            Amounts   Value   Amounts   Value   
                                                      (in thousands)
Senior subordinated notes due August 1, 2003, 
  interest at 10 % (effective rate of 11 %) 
  payable in semi-annual installments, less 
  discount of $1,181,000 and $1,330,000 in 
  1995 and 1994, respectively               $ 98,819 $ 96,219 $ 98,670 $ 96,824

Notes payable to bank, interest at LIBOR plus 
  1.8% and in 1995 and 1994, respectively, with
  principal payments of  $867,000 and $950,500
  in quarterly installments including interest 
  in fiscal year 1996 and thereafter, respectively, 
  plus one final balloon payment at maturity on 
  June 1, 2000                                30,233   30,233   15,400   15,400

Notes payable to an agricultural lender at a rate
  approximating LIBOR plus 1.65%, payable in 
  equal monthly installments including interest 
  through April 1, 2003                       29,119   29,119        -        - 

Senior secured debt payable to an insurance 
  company at 10.49%, payable in equal annual 
  installments beginning October 5, 1996 through 
  September 21, 2002                          22,000   23,930   22,000   23,293

Senior secured debt payable to an insurance 
  company, interest at 9.55%, payable in equal annual 
  installments through October 1, 1998         4,440    4,712    4,440    4,458

Other notes payable                            3,564    3,745   16,614   17,050
                                             188,175  187,958  157,124  157,492
Less current maturities                        5,187             4,493  
                                            $182,988          $152,631

Substantially all of the Company's property, plant and equipment is pledged as
collateral on its long-term debt.

NOTE D - INCOME TAXES
Income (loss) before income taxes after allocation of certain expenses to
foreign operations for 1995, 1994 and 1993 was $29.9 million, $33.9 million and 
$30.8 million, respectively, for domestic operations, and $(27.8) million, $8.6
million and $2.0 million, respectively, for foreign operations.  Provisions
(benefits) for income taxes are based on pretax financial statement income.

The components of income tax expense (benefit) are set forth below:

                                      Years Ended      
                       September 30,  October 1,  October 2,  
                           1995          1994        1993  
                                    (in thousands) 
Current:           
  Federal                $   5,215   $    4,573   $  2,993 
  Foreign                      638          423      2,775 
  Other                        420         (326)      (253)
                             6,273        4,670      5,515 
Deferred:            
Reinstatement 
  of deferred taxes
  through utilization
  of tax credits and                 
  net operating losses       3,542        6,589       6,210 
Accelerated tax
  depreciation                 215        1,002       1,130 
Effect of U.S. tax
  rate change on 
  temporary differences          -            -       1,000 
Expenses deductible in a
  different year for tax 
  and financial reporting 
  purposes                     411         (580)     (1,782)
Reversal of deferred 
  foreign income taxes 
  upon Mexican tax law 
  and restructuring changes      -            -      (1,110)
Other, net                    (383)        (291)       (420)
                             3,785        6,720       5,028 
                         $  10,058    $  11,390   $  10,543 

The following is a reconciliation between the statutory U.S. federal income tax
rate and the Company's effective income tax rate.

                                     Years Ended      
                       September 30,  October 1,    October 2,
                           1995          1994          1993      
Federal income 
  tax rate                  35.0%        35.0%         34.8%
State tax rate, net         40.1          2.3           2.2   
Effect of Mexican loss
  being non-deductible
  in U.S.                  411.1            -             -   
Difference in U.S. 
  statutory tax rate and 
  Mexican effective 
  tax rate                     -        (10.7)         (2.5)  
Reversal of deferred 
  foreign income taxes 
  upon Mexican law and 
  restructuring changes        -            -          (3.4)  
Effect of U.S. tax rate 
  change on temporary 
  differences                  -            -           3.0   
Benefit of (prior) current 
  year losses not 
  recognized                   -            -          (5.3)  
Other, net                  (5.2)         0.2           3.3   
                           481.0%        26.8%         32.1%

Effective October 3, 1993, the Company adopted the provisions of FAS Statement
No. 109, "Accounting for Income Taxes."  As permitted under the new rules,
prior years' financial statements have not been restated.  The cumulative
effect of adopting FAS Statement No. 109 as of October 3, 1993 and the impact
of the adoption on the reported net income amounts for 1994 was not material.

Deferred income taxes reflect the net tax effects of temporary differences
between the carrying amounts of assets and liabilities for financial reporting
purposes and the amounts used for income tax purposes.  Significant components
of the Company's deferred tax liabilities and assets are as follows:

                                          Years Ended 
                                       September  October
                                        30, 1995  1, 1994 
                                         (in thousands)
Deferred tax liabilities: 
  Tax over book depreciation            $ 24,221 $ 24,006
  Prior use of cash accounting            33,572   33,290
  Other                                      965      516
    Total deferred tax liabilities        58,758   57,812

Deferred tax assets:
  AMT credit carryforward                  2,972    6,629
  General business credit carryforward     1,459    1,344
  Expenses deductible in different years   7,166    6,463
    Total deferred tax asset              11,597   14,436
      Net deferred tax liabilities      $ 47,161 $ 43,376


Pursuant to a restructuring of activities completed by the Company's Mexican
subsidiaries on January 1, 1993, approximately $1.1 million of deferred taxes
previously provided on earnings of the Company's nonagricultural Mexican
subsidiaries was reversed as a credit to income tax expense in fiscal 1993. 
This restructuring, along with further restructuring of activities completed on
January 1, 1994, allowed previously nonagricultural Mexican operations to be
combined with existing agricultural operations and, as such, qualify for
taxability as agricultural operations, which are currently not subject to taxes
in Mexico.  The current provision for foreign income taxes in 1995 is the
result of an asset based minimum tax.  The Company has not provided any U.S.
deferred federal income taxes on the undistributed earnings of its Mexican
subsidiaries based upon its determination that such earnings will be
indefinitely reinvested.  As of September 30, 1995, the cumulative
undistributed earnings of these subsidiaries were approximately $27.9 million. 
If such earnings were not considered indefinitely reinvested, deferred federal
and foreign income taxes would have been provided, after consideration of
estimated foreign tax credits.  (Included in this amount would be foreign taxes
resulting from earnings of the Mexican agricultural subsidiaries which would be
due upon distribution of such earnings to the U.S.)  However, determination of
the amount of deferred federal and foreign income taxes is not practicable.

As of September 30, 1995, approximately $3.0 million of alternative minimum tax
credits and $1.5 million of targeted jobs credits were available to offset
future taxable income.  The targeted jobs credits expire in years ending in
2001 through 2010.  All credits have been reflected in the financial statements
as a reduction of deferred taxes.  As these credits are utilized for tax
purposes, deferred taxes will be reinstated.

NOTE E - SAVINGS PLAN
The Company maintains a Section 401(k) Salary Deferral Plan (the "Plan"). 
Under the Plan, eligible domestic employees may voluntarily contribute a
percentage of their compensation.  The Plan provides for a contribution of up
to four percent of compensation subject to an overall Company contribution
limit of five percent of income before taxes.

Under the plan outlined above, the Company's expenses were $1.9 million, $2.6
million and $1.1 million in 1995, 1994 and 1993, respectively.

NOTE F - RELATED PARTY TRANSACTIONS
The major stockholder of the Company owns an egg laying and a chicken growing
operation.  Transactions with related entities are summarized as follows:

                 Years Ended      
                                   September 30,  October 1, October 2, 
                                       1995         1994        1993 
                                              (in thousands)
Contract egg grower fees 
  to major stockholder                 $ 4,760     $ 5,137     $ 4,739
Chick, feed and other 
  sales to major stockholder            12,478       9,373       8,298
Live chicken purchases 
  from major stockholder                12,721       9,346       8,275
Purchases of feed
  ingredients from 
  Archer Daniels Midland 
  Company                               44,250      56,499      37,757

The Company leases an airplane from its major stockholder under an operating
lease agreement.  The terms of the lease agreement require monthly payments of
$33,000 plus operating expenses.  Lease expense was $396,000 for each of the
years 1995, 1994 and 1993.  Operating expenses were $149,000 , $213,000 and
$108,000 in 1995, 1994 and 1993, respectively.

Expenses incurred for the guarantee of certain debt by stockholders were
$623,000, $526,000 and $1,192,000 in 1995, 1994 and 1993, respectively.  

NOTE G - COMMITMENTS AND CONTINGENCIES
The Consolidated Statements of Income (Loss) included rental expense for
operating leases of approximately $9.8 million, $10.1 million and  $9.3 million
in 1995, 1994 and 1993, respectively.  The Company's future minimum lease
commitments under noncancelable operating leases are as follows:

                Year   Amount  
                (in thousands)

               1996     7,924
               1997     6,022
               1998     5,446
               1999     4,559
               2000     3,767
            Thereafter  6,834

At September 30, 1995, the Company had $12.5 million letters of credit
outstanding relating to normal business transactions.

The Company is subject to various legal proceedings and claims which arise in
the ordinary course of its business.  In the opinion of management, the amount
of ultimate liability with respect to these actions will not materially affect
the financial position or results of operations of the Company.

NOTE H - BUSINESS SEGMENTS
The Company operates in a single business segment as a producer of agricultural
products and conducts separate operations in the United States and Mexico.

Interarea sales, which are not material, are accounted for at prices comparable
to normal trade  customer  sales.   Identifiable  assets  by geographic area
are those assets which are used in the Company's operation in each area.

Information about the Company's operations in these geographic areas is as
follows:

                                      Years Ended        
                         September 30,  October 1,   October 2,
                             1995          1994         1993  
                                     (in thousands)
Sales to unaffiliated
  customers: 
    United States          $772,315      $733,865      $699,089
    Mexico                  159,491       188,744       188,754
                           $931,806      $922,609      $887,843
Operating income (loss):          
    United States          $ 41,923      $ 46,421      $ 46,471                 
    Mexico                  (16,993)       13,277         9,874
                           $ 24,930      $ 59,698      $ 56,345
Identifiable assets:        
    United States          $328,489      $302,911      $288,761
    Mexico                  169,115       135,772       134,085
                           $497,604      $438,683      $422,846

NOTE I -ACQUISITIONS AND INVESTMENTS
On July 5, 1995, the Company acquired certain assets of Union de Queretaro, et
al, a group of five chicken companies located near Queretaro, Mexico for
approximately $35.3 million.  These assets were integrated with the Company's
existing Mexican operation, headquartered in Queretaro, Mexico, which is the
second largest chicken operation in Mexico.  The acquisition has been accounted
for as a purchase, and the results of operations for this acquisition have been
included in the Company's consolidated results of operations since the
acquisition date.  Pro forma operating results are not presented as they would
not differ materially from actual results reported in 1995 and 1994.NOTE J -

QUARTERLY RESULTS - (Unaudited)

                                  Year Ended September 30, 1995               
                          First     Second    Third    Fourth    Fiscal    
                          Quarter   Quarter   Quarter  Quarter    Year
                               (in thousands, except per share data)
Net sales                $227,000  $216,830  $230,297  $257,679  $931,806 
Gross profit               20,765     7,577    23,826    21,976    74,144 
Operating income (loss)     8,742    (4,662)   11,843     9,007    24,930 
Net income (loss)             556   (16,304)    6,143     1,638    (7,967)
Per share:
   Net income (loss)         0.02     (0.59)     0.22      0.06     (0.29)
   Cash dividends           0.015     0.015     0.015     0.015      0.06 
   Market price:
      High                 10 3/8     9 3/4     8 3/8     8 3/4    10 3/8 
      Low                   9 3/8     7 3/4     7 1/2     7 5/8     7 1/2     


                                    Year Ended October 1, 1994                
                          First    Second     Third     Fourth    Fiscal
                         Quarter   Quarter    Quarter   Quarter    Year
                              (in thousands, except per share data)
Net sales                $221,851  $223,167  $238,302  $239,289  $922,609
Gross profit (a)           29,354    24,684    28,675    28,114   110,827
Operating income (b)       16,402    12,614    15,095    15,587    59,698
Net income                  8,421     7,920     7,196     7,521    31,058
Per share:
   Net income                0.31      0.29      0.26      0.27      1.13
   Cash dividends           0.015     0.015     0.015     0.015     0.060
   Market price:
      High                  8 1/4     9 1/4     9         9 5/8     9 5/8
      Low                   6 5/8     6 5/8     6 3/8     7 1/4     6 3/8

(a) In the fourth quarter of fiscal 1994, the Company reclassified certain
    expenses previously reflected in selling, general and administrative
    expenses as cost of sales.  Conforming changes have been made and
    reflected in the first three quarters of fiscal 1994 presented above. 
    (See Note A)
(b) In fiscal year 1995, foreign exchange (gain) losses, previously
    reflected as components of selling, general and administrative expenses,
    have been separately stated in other expenses (income).  Conforming
    changes have been made and reflected in the four quarters of fiscal 1994
    presented above.  (See Note A)

PILGRIM'S PRIDE CORPORATION AND SUBSIDIARIES

SCHEDULE II  -  VALUATION AND QUALIFYING ACCOUNTS

Col. A  Col. B Col. C  Col. D Col. E
    ADDITIONS    


DESCRIPTION  Balance at Charges to  Changes to Other Deductions- Balance at End 
               Beginning Costs and  Accounts-Described of Period
         
Year ended September 30, 1995:
  Reserves and allowances deducted
  from asset accounts:
    Allowance for 
      doubtful accounts $5,906,000 $1,333,000    $-- $2,759,000(1)  $4,280,000
         
Year ended October 1, 1994:
  Reserves and allowances deducted
  from asset accounts:
    Allowance for 
      doubtful accounts $3,238,000 $2,666,000    $-- $   (2,000)(2) $5,906,000
         
Year ended October 2, 1993:
  Reserves and allowances deducted
  from asset accounts:
    Allowance for 
      doubtful accounts $1,146,000 $2,124,000(2) $-- $   32,000 (2) $3,238,000

(1) The decrease in the 1995 reserve account is primarily due to the
    devaluation of the peso.

(2) Uncollectible accounts written off, net of receivables.


EXHIBIT 22-SUBSIDIARIES OF REGISTRANT


 1. AVICOLA PILGRIM'S PRIDE DE MEXICO, S.A. DE C.V.
 2. ALIMENTOS BLANCEADOS PILGRIM'S PRIDE S.A. DE C.V.
 3. AVICOLA PILGRIM'S PRIDE, S.A. DE C.V.
 4. AVICOLA SAN MIGUEL, S.A. DE C.V.
 5. AVICOLA Y GANADERA COLIAH, S.A. DE C.V.
 6. AVICOLA Y GRANADERA DEL BAJIO, S.A. DE C.V.
 7. AVINDUSTRIA E INVESTIGACION, S.A. DE C.V.
 8. AVIPECUARIA IXTA, S.A. DE C.V.
 9. AVIPECURIA VALVACO, S.A. DE C.V.
10. AVIPRODUCTORA, S.A. DE C.V.
11. COMPANIA INCUBADORA AVICOLA PILGRIM'S PRIDE, S.A. DE C.V.
12. CIA. INCUBADORA HIDALGO, S.A. DE C.V.
13. INMOBILIARIA AVICOLA PILGRIM'S PRIDE, S. DE R.L. DE C.V.
14. PILGRIM'S PRIDE, S.A. DE C.V.
15. PRODUCTORA Y DISTRIBUIDORA DE ALIMENTOS, S.A. DE. C.V.
16. AVICOLA Y GANADERA DEL CENTRO
17. GALLINA PESADA S.A. DE C.V.


EXHIBIT 23 - CONSENT OF INDEPENDENT AUDITORS

We consent to the incorporation by reference in the Registration Statement
(Form S-8 No. 3-12043) of Pilgrim's Pride Corporation of our report dated
November 6, 1995, with respect to the consolidated financial statements and
schedules of Pilgrim's Pride  Corporation included in this Annual Report (Form
10-K) for the year ended September 30, 1995.

                                                  Ernst & Young LLP

2121 San Jacinto
Dallas, Texas 75201
December 20, 1995





Pilgrim's Pride Corporation
Third Amendment to Secured Credit Agreement

Harris Trust and Savings Bank
Chicago, Illinois

FBS Ag Credit, Inc.
Denver, Colorado

Internationale Nederlanden (U.S) Capital Corporation, formerly known
        as Internationale Nederlanden Bank N. V. ("ING Bank")
New York, New York

Boatmen's First National Bank of Kansas City
Kansas City, Missouri

First Interstate Bank of Texas, N.A.
Dallas, Texas
Ladies and Gentlemen:
        Reference is hereby made to that certain Secured Credit
Agreement dated as of May 27, 1993, as amended (the "Credit Agreement")
among the undersigned, Pilgrim's Pride Corporation, a Delaware
corporation (the "Company"), you (the "Banks") and Harris Trust and
Savings Bank, as agent for the Banks (the "Agent").  All defined terms
used herein shall have the same meanings as in the Credit Agreement
unless otherwise defined herein.
        The Banks extend a $75,000,000 revolving credit facility to
the Company on the terms and conditions set forth in the Credit
Agreement.  The Company, the Agent and the Banks now wish to amend the
Credit Agreement to extend the Termination Date of the Credit
Agreement, to permit the Company to make an acquisition, and to amend
various financial covenants and other provisions of
 the Credit
Agreement, all on the terms and conditions and in the manner set forth
in this Amendment.
1.      Amendments.
        Upon satisfaction of all of the conditions precedent set forth
in Section 2 hereof, the Credit Agreement shall be amended as follows:
             1.1. Section 1.1(a) of the Credit Agreement shall be
amended by replacing the date "May 31, 1997" appearing therein with
the date "May 31, 1998".
             1.2. Section 1.5 of the Credit Agreement shall be amended
to read as follows:  "Section 1.5.  Intentionally Omitted."
             1.3. Section 1.7 of the Credit Agreement shall be amended
to read as follows:
                       .c2."Section 1.7.   Reimbursement Obligation;.  The
Company is obligated, and hereby unconditionally agrees, to pay in
immediately available funds to the Agent for the account of Harris and
the Banks who are participating in L/Cs pursuant to Section 1.9 hereof
the face amount of each draft drawn and presented under an L/C issued
by Harris hereunder not later than 11:00 a.m. (Chicago Time) on the
date such draft is presented for payment to Harris (the obligation of
the Company under this Section 1.7 with respect to any L/C is a
"Reimbursement Obligation").  If at any time the Company fails to pay
any Reimbursement Obligation when due, the Company shall be deemed to
have automatically requested a Domestic Rate Loan from the Banks
hereunder, as of the maturity date of such Reimbursement Obligation,
the proceeds of which Loan shall be used to repay such Reimbursement
Obligation. Such Loan shall only be made if no Potential Default or
Event of Default shall exist and upon approval by all of the Banks,
and shall be subject to availability under the Revolving Credit.  If
such Loan is not made by the Banks for any reason, the unpaid amount
of such Reimbursement Obligation shall be due and payable to the Agent
for the pro rata benefit of the Banks upon demand and shall bear
interest at the rate of interest specified in Section 1.3(d) hereof."
             1.4. The second sentence of Section 1.8(a) of the Credit
Agreement shall be amended to read as follows:
"Each such notice shall specify the date of the Revolving Credit Loan
requested (which shall be a Business Day in the case of Domestic Rate
Loans and CD Rate Loans and a Banking Day in the case of a Eurodollar
Loan), the amount of such Revolving Credit Loan, whether the Revolving
Credit Loan is to be made available by means of a Domestic Rate Loan,
CD Rate Loan or Eurodollar Loan and, with respect to Fixed Rate Loans,
the Interest Period applicable thereto; provided, that in no event
shall the principal amount of any requested Revolving Credit Loan plus
the aggregate principal or face amount, as appropriate, of all
Revolving Credit Loans, L/Cs, and unpaid Reimbursement Obligations
outstanding hereunder exceed the amounts specified in Section 1.1
hereof."
             1.5. Section 1.9 of the Credit Agreement shall be amended
to read as follows:
                       "Section 1.9.  Participation in L/Cs.  Each of the 
Banks will acquire a risk participation for its own account, without recourse 
to or representation or warranty from Harris, in each L/C upon the
issuance thereof ratably in accordance with its Commitment Percentage. 
In the event any Reimbursement Obligation is not immediately paid by
the Company pursuant to Section 1.7 hereof, each Bank will pay to
Harris funds in an amount equal to such Bank's ratable share of the
unpaid amount of such Reimbursement Obligation (based upon its
proportionate share relative to its percentage of the Revolving Credit
(as set forth in Section 1.1 hereof)).  At the election of all of the
Banks, such funding by the Banks of the unpaid Reimbursement
Obligations shall be treated as additional Revolving Credit Loans to
the Company hereunder rather than a purchase of participations by the
Banks in the related L/Cs held by Harris.  The availability of funds
to the Company under the Revolving Credit shall be reduced in an
amount equal to any such L/C.  The obligation of the Banks to Harris
under this Section 1.9 shall be absolute and unconditional and shall
not be affected or impaired by any Event of Default or Potential
Default which may then be continuing hereunder.  Harris shall notify
each Bank by telephone of its proportionate share relative to its
percentage of the total Banks' Revolving Credit Commitments set forth
in Section 1.1 hereof (a "Commitment Percentage") of such unpaid
Reimbursement Obligation.  If such notice has been given to each Bank
by 12:00 Noon, Chicago time, each Bank agrees to pay Harris in
immediately available and freely transferable funds on the same
Business Day.  If such notice is received after 12:00 noon, Chicago
time, each Bank agrees to pay Harris in immediately available and
freely transferable funds no later than the following Business Day. 
Funds shall be so made available at the account designated by Harris
in such notice to the Banks.  Upon the election by the Banks to treat
such funding as additional Revolving Credit Loans hereunder and
payment by each Bank, such Loans shall bear interest in accordance
with Section 1.3(a) hereof.  Harris shall share with each Bank on a
pro rata basis relative to its Commitment Percentage a portion of each
payment of a Reimbursement Obligation (whether of principal or
interest) and any L/C Fee (but not any L/C Issuance Fee) payable by
the Company.  Any such amount shall be promptly remitted to the Banks
when and as received by Harris from the Company."

<PAGE>
             1.6. Sections 3.4 and 3.5 of the Credit Agreement shall be
amended to read as follows:
                       ".c2.Section 3.4.   Mandatory Prepayments - Borrowing
Base.  The Company shall not permit the sum of the principal amount of
all Loans plus the amount available for drawing under all L/Cs and the
aggregate principal amount of all unpaid Reimbursement Obligations at
any time outstanding to exceed the lesser of (i) the sum of the Banks'
Revolving Credit Commitments or (ii) the Borrowing Base as determined
on the basis of the most recent Borrowing Base Certificate.  In
addition to the Company's obligations to pay any outstanding
Reimbursement Obligations as set forth in Section 1.7 hereof, the
Company will make such payments on any outstanding Loans and
Reimbursement Obligations (and, if any L/Cs are then outstanding,
deposit an amount equal to the aggregate amount available for drawing
under all L/Cs into an interest bearing account with the Agent which
shall be held as additional collateral security for such L/Cs) which
are necessary to cure any such excess within three Business Days after
the occurrence thereof.  Any amount prepaid under the Revolving Credit
may, subject to the terms and conditions of this Agreement, be
borrowed, prepaid and borrowed again.  
                       Section 3.5.   Place and Application of Payments.  All
payments of principal and interest made by the Company in respect of
the Notes and Reimbursement Obligations and all fees payable by the
Company hereunder, shall be made to the Agent at its office at 111
West Monroe Street, Chicago, Illinois  60690 and in immediately
available funds, prior to 12:00 noon on the date of such payment.  All
such payments shall be made without setoff or counterclaim and without
reduction for, and free from, any and all present and future levies,
imposts, duties, fees, charges, deductions withholdings, restrictions
or conditions of any nature imposed by any government or any political
subdivision or taxing authority thereof.  Unless the Banks otherwise
agree, any payments received after 12:00 noon Chicago time shall be
deemed received on the following Business Day.  The Agent shall remit
to each Bank its proportionate share of each payment of principal,
interest and facility fees, and L/C fees received by the Agent by 3:00
P.M. Chicago time on the same day of its receipt if received by the
Agent by 12:00 noon, Chicago time, and its proportionate share of each
such payment received by the Agent after 12:00 noon on the Business
Day following its receipt by the Agent.  In the event the Agent does
not remit any amount to any Bank when required by the preceding
sentence, the Agent shall pay to such Bank interest on such amount
until paid at a rate per annum equal to the Fed Funds Rate.  The
Company hereby authorizes the Agent to automatically debit its account
with Harris for any principal, interest and fees when due under the
Notes, any L/C Agreement or this Agreement and to transfer the amount
so debited from such account to the Agent for application as herein
provided.  All proceeds of Collateral shall be applied in the manner
specified in the Security Agreement."
             1.7. The Credit Agreement shall be amended by adding the
following provision after Section 3.5 of the Credit Agreement or
Section 3.6 of the Credit Agreement.
                       "3.6.     Acquisition Fee.  Upon the completion of the 
Queretaro Acquisition, the Company shall pay the Agent for the account of the
Banks a non-refundable fee in an amount equal to one-half of one
percent (0.5%) of the Revolving Credit Commitments (determined without
regard to any usage thereunder)."
             1.8. Section 4.8 of the Credit Agreement shall be amended
to read as follows:
                       "4.8.     "Applicable Margin" shall mean, with respect 
to each type of Loan described in Column A below, the rate of interest per
annum shown in Columns B, C, D and E below for the range of Leverage
Ratio specified for each Column:

      A                   B           C               D             E
                            
Leverage Ratio        <0.45 to 1  >.45 to 1 and  >0.5 to 1 and  >.60 to 1
                                  <0.5 to 1      <.60 to 1      and <.70 to 1
                            
Eurodollar Loans       0.75%        1.125%         1.375%         1.75%
Domestic Rate Loans    0.0%         0.125%         0.375%         0.75%
CD Rate Loans          0.875%       1.25%          1.50%          1.875%

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 column E above."
             1.9. Section 4.38 of the Credit Agreement shall be amended
by inserting the word "and" after the semi-colon at the end of
subsection (e) thereof, by replacing the phrase "; and" appearing at
the end of subsection (f) thereof with a period, and by deleting
subsection (g) thereof.
            1.10. Sections 4.10 and 4.11 of the Credit Agreement shall
be amended to read as follows:
                  "4.10.  Intentionally Omitted.
                   4.11.  Intentionally Omitted."
            1.11. Section 4.70 of the Credit Agreement shall be amended
by deleting the phrase ", the B/A Agreement" appearing therein.
            1.12. The Credit Agreement shall be amended by adding the
following provisions after Section 4.106 of the Credit Agreement as
Section 4.107 of the Credit Agreement.
"4.107.  Queretaro Acquisition" shall mean the acquisition of all or
substantially all of the capital stock or assets of Union de
Queretaro, a group of companies organized in the state of Queretaro,
Mexico, by the Company."
            1.13. Section 4.101(b) of the Credit Agreement shall be
amended to read as follows:
"(b) With respect to Eligible Inventory consisting of live broiler
chickens, a price per pound equal to 75% of (i) the price quoted on
the Los Angeles Majority Market on the date of calculation minus (ii)
$0.085, rounded up to the nearest 1/4 cent;".
            1.14. The introductory sentence to Section 6 of the Credit
Agreement shall be amended by deleting the phrase " or to create any
B/A" appearing therein.
            1.15. Section 6.1 of the Credit Agreement shall be amended
by deleting the phrase "and B/As" appearing therein.
            1.16. Section 6.3 of the Credit Agreement shall be amended
to read as follows:
             ".c2.Section 6.3.  Each Extension of Credit;.  As of the time
of the making of each Loan and the issuance of each L/C hereunder
(including the initial Loan or L/C, as the case may be):
                       (a)  each of the representations and warranties set 
forth in Section 5 hereof shall be and remain true and correct as of said
time as if made at said time, except that (i) the representations and
warranties made under Section 5.3 shall be deemed to refer to the most
recent financial statements furnished to the Banks pursuant to Section
7.4 hereof and (ii) with respect to the Company's Subsidiaries in
Mexico the representations and warranties made under Section 5.13(d)
shall be deemed to refer only to material strikes, work stoppages,
unfair labor practice claims or other material labor disputes;
                       (b)  the Company shall be in full compliance with all 
of the terms and conditions hereof, and no Potential Default or Event of
Default shall have occurred and be continuing; and
                       (c)  after giving effect to the requested extension of
credit and to each Loan that has been made and L/C issued hereunder,
the aggregate principal amount of all Loans, the amount available for
drawing under all L/Cs and the aggregate principal amount of all
Reimbursement Obligations then outstanding shall not exceed the lesser
of (i) the sum of the Banks' Revolving Credit Commitments then in
effect and (ii) the Borrowing Base as determined on the basis of the
most recent Borrowing Base Certificate, except as otherwise agreed by
the Company and all of the Banks;
and the request by the Company for any Loan or L/C pursuant hereto
shall be and constitute a warranty to the foregoing effects."
            1.17. The introductory phrase to Section 7 of the Credit
Agreement shall be amended by replacing the phrase ", L/C or B/A"
appearing therein with the phrase "or L/C".
            1.18. Section 7.4(d) of the Credit Agreement shall be
amended by deleting the phrase ", accompanied by a warehouse receipt
issued by the Warehouseman covering no less than all of the Inventory
shown on such Borrowing Base Certificate" appearing at the end
thereof.
            1.19. Section 7.6 of the Credit Agreement shall be amended
to read as follows:
                       .c2."Section 7.6.  Consolidation and Merger;.  The 
Company will not, and will not permit any Subsidiary to, consolidate with or 
merge into any Person, or permit any other Person to merge into it, or
acquire (in a transaction analogous in purpose or effect to a
consolidation or merger) all or substantially all the Property of the
other Person, or acquire substantially as an entirety the business of
any other Person, without the prior written consent of the Required
Banks; provided, however, that if no Potential Default or Event of
Default shall have occurred and be continuing the Company may (a)
acquire all or substantially all the Property of the other Person, or
acquire substantially as an entirety the business of any other Person
if the aggregate fair market value of all consideration paid or
payable by the Company in all such acquisitions made in any Fiscal
Year does not exceed $10,000,000, and (b) consummate the Queretaro
Acquisition on or before December 31, 1995 for an aggregate
consideration (including the fair market value of any Property
transferred by the Company and the aggregate amount of all liabilities
assumed by the Company) payable by the Company of up to $30,000,000."
            1.20. Section 7.8 of the Credit Agreement shall be amended
to read as follows:
                       .c2."Section 7.8.  Leverage Ratio;.  The Company will 
not permit the ratio of its Leverage Ratio at any time during each period
specified below to exceed the ratio specified below for such period:
                            (a)  during Fiscal Year 1995, 0.65 to 1; 
                            (b)  during Fiscal Year 1996, 0.625 to 1; 
                            (c)  during Fiscal Year 1997, 0.60 to 1; and
                            (d)  during each Fiscal Year thereafter, 0.575 
                                 to 1."
            1.21. Sections 7.10 of the Credit Agreement shall be amended
to read as follows:
             ".c2.Section 7.10.  Current Ratio;.  The Company will maintain
at all times and measured as of the last day of each monthly fiscal
accounting period a Current Ratio of not less than (a) from and after
the date the Queretaro Acquisition is completed, 1.25 to 1, and (b)
prior to the completion of the Queretaro Acquisition, (i) 1.50 to 1
during Fiscal Year 1995, (ii) 1.30 to 1 during Fiscal Year 1996 and
Fiscal Year 1997, and (iii) 1.35 to 1 during Fiscal Year 1998."
            1.22. Sections 7.13 and 7.14 of the Credit Agreement shall
be amended to read as follows:
             .c2."Section 7.13.  Minimum Net Working Capital;.  The Company
will maintain Net Working Capital at all times during each period
specified below (measured as of the last day of each monthly fiscal
accounting period) in an amount not less than the amount specified
below for each period:
                       (a)  Prior to the date the Queretaro Acquisition is
completed:
                             (i) during Fiscal Year 1995, $65,000,000;
                            (ii) during Fiscal Year 1996, $45,000,000;
                           (iii) during Fiscal Year 1997, $48,000,000; and
                            (iv) at all times thereafter, $53,000,000; and
                       (b)  from and after the date the Queretaro Acquisition is
Completed:
                      (i)     during Fiscal Year 1995 and Fiscal Year 1996,
                              $40,000,000;
                            (ii) during Fiscal Year 1997, $45,000,000; and
                           (iii) at all times thereafter, $50,000,000."
             .c2.Section 7.14.  Capital Expenditures;.  The Company will
not, and will not permit any Subsidiary to, make or commit to make any
capital expenditures (as defined and classified in accordance with
generally accepted accounting principles consistently applied;)
provided, however, that if no Event of Default or Potential Default
shall exist before and after giving effect thereto, the Company and
its Subsidiaries may make capital expenditures (a) during Fiscal Year
1994, in an amount not to exceed an amount equal to 115% of the
Company's depreciation and amortization charges for Fiscal Year 1993,
(b) during Fiscal Year 1995, (i) $50,700,000 if the Queretaro
Acquisition is not completed, and (ii) $77,700,000 if the Queretaro
Acquisition is completed, and (c) during each Fiscal Year thereafter,
in an aggregate amount in each Fiscal Year commencing with Fiscal Year
1996 not to exceed the sum of (i) an amount equal to 115% of the
Company's depreciation and amortization charges for the preceding
Fiscal Year and (ii) the amount, if any, by which such capital
expenditures made by the Company in the immediately preceding Fiscal
Year was less than the maximum amount of capital expenditures the
Company was permitted to make under this Section 7.14 during such
Fiscal Year, determined without regard to any carryover amount from
any prior Fiscal Year, but not to exceed $5,000,000 in any Fiscal
Year."
            1.23. Section 7.17(l) of the Credit Agreement shall be
amended by replacing the phrase "any date of determination" appearing
therein with the phrase "the last day of such Fiscal Year".
            1.24. Section 7.18(g) of the Credit Agreement shall be
amended to read as follows:  
                       "(g) loans, investments (excluding retained earnings) 
and advances by the Company to its Subsidiaries located in Mexico in an
aggregate outstanding amount not to exceed (i) $140,000,000 if the
Queretaro Acquisition is completed and (ii) $105,000,000 if the
Queretaro Acquisition is not completed at any time, provided, however,
that the Company may make loans, investments (excluding retained
earnings) and advances to its Subsidiaries located in Mexico in an
aggregate amount equal to the aggregate amount of any capital
withdrawn from its Mexican Subsidiaries after the date hereof but not
to exceed an aggregate amount of $25,000,000 in any Fiscal Year of the
Company, provided further that any such investments (excluding
retained earnings), loans and advances shall not cause the aggregate
outstanding amount of all such loans, investments (excluding retained
earnings) and advances to exceed (i) $140,000,000 if the Queretaro
Acquisition is completed and (ii) $105,000,000 if the Queretaro
Acquisition is not completed at any time;"
            1.25. Section 8.1(a) of the Credit Agreement shall be
amended by replacing the number "2.4" appearing in line 3 thereof with
the number "3.4".
            1.26. Section 8.4 of the Credit Agreement shall be amended
to read as follows:
                       ".c2.Section 8.4.  L/Cs.  Promptly following the 
acceleration of the maturity of the Notes pursuant to Section 8.2 or 8.3 
hereof, the Company shall immediately pay to the Agent for the benefit of the
Banks the full aggregate amount of all outstanding L/Cs.  The Agent
shall hold all such funds and proceeds thereof as additional
collateral security for the obligations of the Company to the Banks
under the Loan Documents.  The amount paid under any of the L/Cs for
which the Company has not reimbursed the Banks shall bear interest
from the date of such payment at the default rate of interest
specified in Section 1.3(c)(i) hereof."
            1.27. Section 9.3 of the Credit Agreement shall be amended
by replacing the number "2.3" appearing in the next to last line
thereof with the number "3.3".
            1.28. All references in the Borrowing Base Certificate to
the "Arkansas live market" shall be deemed references to the price
determined in accordance with Section 4.101(b) of the Credit Agreement
as amended hereby.
2.      Conditions Precedent.
        The effectiveness of the Amendment is subject to the
satisfaction of all of the following conditions precedent:
             2.1. The Company and each of the 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. Mr. and Mrs. Lonnie A. Pilgrim shall have executed and
delivered to the Banks the Guarantors' Consent in the form set forth
below.
             2.3. Each of the representations and warranties set forth
in Section 5 of the Credit Agreement shall be true and correct.
             2.4. The Company 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.
             2.5. All legal matters incident to the execution and
delivery hereof and the instruments and documents contemplated hereby
shall be satisfactory to the Banks.
             2.6. Harris shall have received a written consent from
CoBank with respect to this Amendment in the form set forth below.
             2.7. The Agent shall have received (in sufficient
counterparts for distribution to each of the Banks) all of the
following in a form satisfactory to the Agent, the Banks and their
respective counsel:
                   (a) copies (executed or certified as may be appropriate)
of all legal documents or proceedings taken in connection with the
execution and delivery of this Amendment, and the other instruments
and documents contemplated hereby; and
                   (b) Opinion of counsel to the Company substantially in a
form as set forth in Exhibit A hereto and satisfactory to the Agent,
the Banks and their respective counsel.
             2.8. The Agent shall have received for the ratable benefit
of the Banks an amendment fee in an amount equal to one-eighth of one
percent (0.125%) of the maximum amount of the Revolving Credit.
Section 3.           Representations And Warranties.
           Section 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 Company is 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.
4.      Miscellaneous.
             4.1. The Company has heretofore executed and delivered to
the Agent that certain Security Agreement Re:  Accounts Receivable,
Farm Products and Inventory dated as of May 27, 1993 (the "Security
Agreement") and the Company hereby agrees that the Security Agreement
shall secure all of the Company's indebtedness, obligations and
liabilities to the Agent 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 or the Notes,
any reference to the Credit Agreement or Notes being sufficient to
refer to the Credit Agreement or the Notes as amended hereby.
             4.3. The Company agrees to pay all out-of-pocket costs and
expenses incurred by the Agent and Banks in connection with the
preparation, execution and delivery of this Amendment and the
documents and transactions contemplated hereby, including the fees and
expenses of Messrs. Chapman and Cutler.
             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 5.5(b) hereof and to the extent that the Federal
laws of the United States of America may otherwise apply.
              (b) Notwithstanding anything in Section 5.5(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.

<PAGE>
        Dated as of June 30, 1995.
Pilgrim's Pride Corporation
By      Lonnie Bo Pilgrim
        Its Chief Executive Officer
        Accepted and Agreed to as of the day and year last above
written.

Harris Trust And Savings Bank individually and as Agent
By      Carl Blackham
        Its Vice President

FBS Ag Credit, Inc.
By      Douglas Hoffner
        Its Vice President

Internationale Nederlanden (U.S.) Capital Corporation, formerly known
                                as Internationale Nederlanden Bank N. V.
By      Daniel W. Lamprecht
        Its Vice President

Boatmen's First National Bank of Kansas City
By      Randy Anders
        Its Vice President

First Interstate Bank of Texas, N.A.
By      Ken Taylor
        Its Banking Officer


<PAGE>
CoBank's Consent
The undersigned National Bank for Cooperatives hereby consents
to the execution and delivery by Harris Trust and Savings Bank of the
above and foregoing Amendment.
Dated as of June 30, 1995.
                        
                        CoBank ACB, formerly known as 
                        National Bank for Cooperatives
                        
                        
                        By             Dennis Blick
                                       Its vice President
                                    

<PAGE>
Guarantors' Consent
The undersigned, Lonnie A. Pilgrim and Patty R. Pilgrim, have
executed and delivered a Guaranty Agreement dated as of May 27, 1993
(the "Guaranty") to the Banks.  As an additional inducement to and in
consideration of the Banks' acceptance of the foregoing Amendment, the
undersigned hereby agree with the Banks as follows:
               1.     Each of the undersigned consents to the execution of
     the foregoing Amendment by the Company and acknowledges that this
     consent is not required under the terms of the Guaranty and that the
     execution hereof by the undersigned shall not be construed to require
     the Banks to obtain the undersigneds' consent to any future amendment,
     modification or waiver of any term of the Credit Agreement except as
     otherwise provided in said Guaranty.  Each of the undersigned hereby
     agrees that the Guaranty shall apply to all indebtedness, obligations
     and liabilities of the Company to the Banks, the Agent and under the
     Credit Agreement, as amended pursuant to the foregoing Amendment. 
     Each of the undersigned 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 foregoing Amendment, unless otherwise expressly defined herein.
     Dated as of June 30, 1995.
                        
                                    
                                     Lonnie A. Pilgrim
                                    
                                     Patty R. Pilgrim




Pilgrim's Pride Corporation

Second Amendment to Secured Credit Agreement and Waiver
        

Harris Trust and Savings Bank
Chicago, Illinois

FBS Ag Credit, Inc.
Denver, Colorado

Internationale Nederlanden (U.S) Capital Corporation, formerly known
        as Internationale Nederlanden Bank N. V. ("ING Bank")
New York, New York

Boatmen's First National Bank of Kansas City
Kansas City, Missouri

First Interstate Bank of Texas, N.A.
Dallas, Texas
Ladies and Gentlemen:

        Reference is hereby made to that certain Secured Credit
Agreement dated as of May 27, 1993 (the "Credit Agreement") among the
undersigned, Pilgrim's Pride Corporation, a Delaware corporation (the
"Company"), you (the "Banks") and Harris Trust and Savings Bank, as
agent for the Banks (the "Agent").  All defined terms used herein
shall
have the same meanings as in the Credit Agreement unless otherwise
defined herein.
        The Banks extend a $75,000,000 revolving credit facility to
the Company on the terms and conditions set forth in the Credit
Agreement.  The Company, the Agent and the Banks now wish to amend the
Credit Agreement to permit the Company to pay certain dividends on its
capital stock, all on the terms and conditions and in the manner set
forth in this Amendment.
1.      Amendments.
        Upon satisfaction
 of all of the conditions precedent set forth
in Section 3 hereof, the Credit Agreement shall be amended as follows:
             1.1. Section 7.9(c) of the Credit Agreement shall be
amended to read as follows:

                       "(c) from the last day of Fiscal Year 1995 and
at all times
during each Fiscal Year thereafter, an amount in any Fiscal Year equal
to the minimum amount required to be maintained during the preceding
Fiscal Year plus an amount equal to 75% of the Company's Net Income
(but not less than zero) during such Fiscal Year, if the Company's
Leverage Ratio for such Fiscal Year is equal to or greater than 0.5 to
1, or 50% of the Company's Net Income (but not less than zero) if the
Company's Leverage Ratio for such Fiscal Year is less than 0.5 to 1."
             1.2. Section 7.15 of the Credit Agreement shall be
amended
to read as follows:
          ".c2.Section 7.15.  Dividends and Certain Other Restricted
Payments;.  The Company will not (a) declare or pay any dividends or
make any distribution on any class of its capital stock (other than
dividends payable solely in its capital stock) or (b) directly or
indirectly purchase, redeem or otherwise acquire or retire any of its
capital stock (except out of the proceeds of, or in exchange for, a
substantially concurrent issue and sale of capital stock) or (c) make
any other distributions with respect to its capital stock; provided,
however, that if no Potential Default or Event of Default shall exist
before and after giving effect thereto, the Company may pay (i)
dividends in an aggregate amount not to exceed $1,700,000 in any
Fiscal Year, and (ii) dividends permitted under Section 7.15(i) during
the immediately preceding Fiscal Year that were declared but not paid
in the immediately preceding Fiscal Year."
2.           Waiver.
        Upon satisfaction of the conditions precedent set forth in
Section 3 hereof:
             2.1. The Banks hereby waive non-compliance by the Company
with Section 7.15 of the Credit Agreement resulting from a payment of
dividends on the Company's capital stock in the amount of $413,839.33
on September 30, 1994.
             2.2. The waiver contained in Section 3.1 of this
Amendment
is limited to matters set forth in that Section, and the Company
agrees that it remains obligated to comply with the terms of the
Credit Agreement and the other Loan Documents, including Section 7.15
of the Credit Agreement, and that the Banks shall not be obligated in
the future to waive any provision of the Credit Agreement or the other
Loan Documents.
3.      Conditions Precedent.
        The effectiveness of the Amendment is subject to the
satisfaction of all of the following conditions precedent:
             3.1. The Company and each of the Banks shall have
executed
this Amendment (such execution may be in several counterparts and the
several parties hereto may execute on separate counterparts).
             3.2. Mr. and Mrs. Lonnie A. Pilgrim shall have executed
and
delivered to the Banks the Guarantors' Consent in the form set forth
below.
             3.3. Each of the representations and warranties set forth
in Section 5 of the Credit Agreement shall be true and correct.
             3.4. The Company 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.
             3.5. All legal matters incident to the execution and
delivery hereof and the instruments and documents contemplated hereby
shall be satisfactory to the Banks.
             3.6. Harris shall have received a written consent from
CoBank with respect to this Amendment.
Section 4.           Representations And Warranties.
           Section 4.1. 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 Company is 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.
5.      Miscellaneous.
             5.1. The Company has heretofore executed and delivered to
the Agent that certain Security Agreement Re:  Accounts Receivable,
Farm Products and Inventory dated as of May 27, 1993 (the "Security
Agreement") and the Company hereby agrees that the Security Agreement
shall secure all of the Company's indebtedness, obligations and
liabilities to the Agent 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.
             5.2. 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 or the Notes,
any reference to the Credit Agreement or Notes being sufficient to
refer to the Credit Agreement or the Notes as amended hereby.
             5.3. The Company agrees to pay all out-of-pocket costs
and
expenses incurred by the Agent and Banks in connection with the
preparation, execution and delivery of this Amendment and the
documents and transactions contemplated hereby, including the fees and
expenses of Messrs. Chapman and Cutler.
             5.4. 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.
             5.5. (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 5.5(b) hereof and to the extent that the Federal
laws of the United States of America may otherwise apply.
              (b) Notwithstanding anything in Section 5.5(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.
        Dated as of December 6, 1994.
Pilgrim's Pride Corporation

By      Lonnie Bo Pilgrim
        Its Chief Executive Officer

Accepted and Agreed to as of the day and year last above written.

Harris Trust And Savings Bank individually and as Agent
By Carl Blackham
   Its Vice President

FBS Ag Credit, Inc.
By Douglas Hoffner
   Its Vice President

Internationale Nederlanden (U.S.) Capital Corporation, formerly known
                                            as Internationale
Nederlanden Bank N. V.
By Daniel W. Lamprecht
   Its Vice President

Boatmen's First National Bank of Kansas City
By Randy Anders
   Its Vice President

First Interstate Bank of Texas, N.A.
By Ken Taylor
   Its Banking Officer

Guarantors' Consent
The undersigned, Lonnie A. Pilgrim and Patty R. Pilgrim, have
executed and delivered a Guaranty
Agreement dated as of May 27, 1993 (the "Guaranty") to the Banks.  As
an additional inducement to and in consideration of the Banks'
acceptance of the foregoing Amendment, the undersigned hereby agree with the
Banks as follows:
                 1.     Each of the
undersigned consents to the execution of the foregoing Amendment by the
Company and acknowledges that this consent is not required under the
terms of the Guaranty and that the execution hereof by the
undersigned shall not be construed to require the Banks to obtain the
undersigneds' consent to any future amendment, modification or waiver of 
any term of the Credit Agreement except as otherwise provided in said
Guaranty.  Each of the undersigned hereby agrees that the Guaranty shall
apply to all indebtedness, obligations and liabilities of the Company to
the Banks, the Agent and under the Credit Agreement, as amended
pursuant to the foregoing Amendment. Each of the undersigned 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 foregoing Amendment, unless otherwise expressly defined herein.

                                       Dated as of December 6, 1994.

                                    
                                     Lonnie A. Pilgrim
                                    
                                     Patty R. Pilgrim






SECOND AMENDED AND RESTATED
LOAN AND SECURITY AGREEMENT

Dated as of July 31, 1995,

between


PILGRIM'S PRIDE CORPORATION,
as Borrower,

THE BANKS PARTY HERETO, and

CREDITANSTALT-BANKVEREIN,
as Agent

SECOND AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT


             THIS SECOND AMENDED AND RESTATED LOAN AND
SECURITY AGREEMENT (the "Agreement") is made and entered into the as
of the 31st day of July, 1995, by and among PILGRIM'S PRIDE
CORPORATION, a Delaware corporation (hereinafter referred to as
"Borrower"), each of the Banks signatory hereto (hereinafter referred
to individually as a "Bank" and collectively as the "Banks"), and
CREDITANSTALT-BANKVEREIN, as agent for the Banks (in such capacity,
together with its successors and assigns in such capacity, hereinafter
referred to as the "Agent");

W I T N E S S E T H:


            WHEREAS, Borrower, the Banks and the Agent are
parties to that certain Loan and Security Agreement, dated as of June
3, 1993 (the "Original Loan Agreement"), which provided for a term
loan (the "Original Facility") in the original principal amount of
Twenty-Eight Million Dollars ($28,000,000.00);

            WHEREAS, by that certain Amended and Restated Loan
and Security Agreement dated July 29, 1994 (the "Amended and Restated
Loan Agreement"), the Borrower,
 the Banks and the Agent amended and
restated the Original Loan Agreement (a) to continue the Original
Facility at its then current outstanding balance of $21,700,000.00;
(b) to make a standby/term loan (the "Existing Standby/Term Facility")
to borrower to be utilized on or before June 20, 1995 (the "Conversion
Date"); and (c) to make certain other changes as more fully set forth
herein;

            WHEREAS, by letter agreement of the parties dated
June 19, 1995, the Amended and Restated Loan Agreement was amended to
extend the Conversion Date to September 20, 1995;

            WHEREAS, John Hancock Mutual Life Insurance
Company, a Massachusetts corporation ("Hancock") or its assignee has
heretofore released its Lien on the Mortgaged Property, evidenced by
(i) that certain promissory note dated February 1, 1988, executed by
the Borrower and payable to Hancock's order in the original principal
amount of $20,000,000, secured by that certain Deed of Trust, Mortgage
and Security Agreement dated February 1, 1988, executed by the
Borrower for the benefit of Hancock, and recorded in Volume 182, Page
315, aforesaid Records, amended by instruments recorded in Volume 656,
page 163, aforesaid Records and Volume 698, page 77, assigned to
Agriculture Production Credit Association ("APCA") by instrument
recorded at file number 2798, aforesaid Records, and (ii) that certain
promissory note dated April 25, 1991, executed by the Borrower and
payable to Hancock's order in the original principal amount of
$5,000,000 (collectively the "Hancock Indebtedness"), secured by that
certain Deed of Trust, Assignment of Rents and Security Agreement
dated April 25, 1991, executed by the Borrower for the benefit of
Hancock, and recorded in Volume 656, Page 168, Deed of Trust Records,
Titus County, Texas, amended by instrument recorded in Volume 698,
page 77, aforesaid Records, assigned to APCA by instrument recorded at
file number 2798, aforesaid Records.

            WHEREAS, the Borrower, the Banks and the Agent
wish to further amend the Amended and Restated Loan Agreement (a) to
continue the Original Facility at its current outstanding balance of
$15,400,000.00; (b) to continue the Existing Standby/Term Facility at
its current outstanding balance of $10,000,000.00; (c) to make an
additional standby/term loan to Borrower to be utilized on or before
June 20, 1996; and (d) to make certain other changes as more fully set
forth herein;

            WHEREAS, for the sake of convenience, Borrower,
the Banks and the Agent desire to restate in its entirety the Amended
and Restated Loan Agreement; and

            WHEREAS, this Agreement represents a continuation
of the Existing Facility and the Existing Standby/Term Facility, as
amended hereby, and not a replacement of the Existing Facility or the
Existing Standby/Term Facility;

            NOW, THEREFORE, in consideration of the foregoing
premises, to induce the Banks to extend the financing provided for
herein, and for other good and valuable consideration, the sufficiency
and receipt of all of which are acknowledged by Borrower, Borrower,
the Banks and Agent agree as follows:


1.    DEFINITIONS, TERMS AND REFERENCES

       a.   Certain Definitions.  When used herein, the
          following terms shall have the following meanings:

     "Affiliate" shall mean, as to any Person, any other Person
which, directly or indirectly, owns or controls, on an aggregate
basis, including all beneficial ownership and ownership or control as
a trustee, guardian or other fiduciary, at least ten percent (10%) of
the outstanding shares of capital stock having ordinary voting power
to elect a majority of the board of directors (irrespective of
whether, at the time, stock of any other class or classes of such
corporation shall have or might have voting power by reason of the
happening of any contingency) of such Person; or which controls, is
controlled by or is under common control with such Person.  For the
purposes of this definition, "control" means the possession, directly
or indirectly, of the power to direct or cause the direction of
management and policies, whether through the ownership of voting
securities, by contract or otherwise.

     "Agreement" shall mean this Second Amended and Restated Loan
and Security Agreement, as amended or supplemented from time to time. 

     "Applicable Law" shall mean all provisions of statutes, rules,
regulations and orders of any Federal, state, municipal or other
governmental department, commission, board, bureau, agency or
instrumentality or any court, in each case, whether of the United
States or foreign, applicable to a Person, and all orders and decrees
of all courts and arbitrators in proceedings or actions in which the
Person in question is a party.

     "Assignee" shall mean any bank or other entity to which a Bank
assigns all or any part of any Loan pursuant to Section 13.4(c) and
"Assignees" shall mean, collectively, all banks and other entities to
which any Bank assigns all or any part of any Loan pursuant to Section
13.4(c) hereof.

     "Bankruptcy Code" shall mean the Bankruptcy Reform Act of
1978, as may be amended from time to time.

     "Base Rate" shall mean an interest rate per annum, fluctuating
daily, equal to the higher of (a) the rate announced by Creditanstalt
from time to time at its principal office in New York, New York, as
its prime rate for domestic (United States) commercial loans in effect
on such day; and (b) the Federal Funds Rate in effect on such day plus
one-half percent (1/2%).  (Such Base Rate is not necessarily intended
to be the lowest rate of interest charged by Creditanstalt in
connection with extensions of credit.)  Each change in the Base Rate
shall result in a corresponding change in the interest rate hereunder
with respect to a Base Rate Loan and such change shall be effective on
the effective date of such change in the Base Rate.

     "Base Rate Loan" shall mean a Loan bearing interest at a rate
based on the Base Rate.

     "Business Day" shall mean any day for dealings by and between
banks in U.S. dollar deposits in the interbank Eurodollar market in
New York City, New York, and London, England, other than a Saturday,
Sunday or any day which shall be in London, England or New York City,
New York or Atlanta, Georgia, a legal holiday or a day on which
banking institutions are authorized by law to close.

     "Capital Lease" shall mean, as to any Person, any lease of (or
other agreement conveying the right to use) real and/or personal
property which is required to be classified and accounted for as a
capital lease on a balance sheet of such Person under GAAP (including
Statement of Financial Accounting Standards No. 13 of the Financial
Accounting Standards Board).

     "Closing Date" shall mean the date that this Agreement has
been signed by Borrower, the Banks and the Agent and has become
effective in accordance with Section 11 hereof.

     "Code" shall mean the Internal Revenue Code of 1986, as
amended, and the rules and regulations promulgated thereunder from
time to time.

     "Collateral" shall mean the property of Borrower described in
Section 4.1, or any part thereof, as the context shall require, in
which Agent has, or is to have, a Lien pursuant thereto, as security
for payment of the Obligations.

     "Continue", "Continuation" and "Continued" shall refer to the
continuation pursuant to Section 3.4 hereof as a Eurodollar Loan from
one Interest Period to the next Interest Period.

     "Convert", "Conversion" and "Converted" shall refer to a
conversion pursuant to Section 3.4 hereof of a Base Rate Loan into a
Eurodollar Loan or of a Eurodollar Loan into a Base Rate Loan.

     "Creditanstalt" shall mean Creditanstalt-Bankverein, an
Austrian banking corporation, and its successors and assigns.

     "Current Assets" of any Person shall mean the aggregate amount
of assets of such Person which in accordance with GAAP may be property
classified as current assets after deducting adequate reserves where
proper.

     "Current Liabilities" shall mean all items (including taxes
accrued as estimated) which in accordance with GAAP may be properly
classified as current liabilities, including in any event all current
portions of the amounts outstanding from time to time under this
Agreement, but excluding any current liability under the Working
Capital Credit Agreement.

     "Current Ratio" shall mean the ratio of Current Assets to
Current Liabilities of the Borrower and its Subsidiaries.

     "Deed of Trust" shall mean the Deed of Trust, Assignment of
Rents and Security Agreement dated June __, 1993, filed for record
June 3, 1993, recorded in Volume 775, page 1, Titus County, Texas Deed
Records, executed by Borrower, conveying the Mortgaged Property to
secure the repayment of the Loans and performance of the Obligations,
and all amendments thereto, recorded or to be recorded in the Titus
County, Texas Deed Records.

     "Default" shall mean the occurrence of any event or condition
which, after satisfaction of any requirement for the giving of notice
or the lapse of time, or both, would become an Event of Default.

     "Default Rate" shall mean (a) with respect to the unpaid
portion of any Loan, an interest rate per annum equal to two percent
(2%) above the interest rate set forth for such Loan in Section 3.1(a)
hereof or (b) with respect to any portion of the Obligations other
than Loans, two percent (2%) above the rate set forth in Section
3.1(a)(ii) hereof.

     "Equipment" shall mean all of Borrower's equipment, as such
term is defined in Section 9-109(2) of the UCC, now or hereafter
located on or based at the Land, whether now owned or existing or
hereafter acquired or manufactured and whether or not subsequently
removed from the Land, including, but not limited to, all equipment
described in or covered by that certain Appraisal of Broiler
Processing and Related Facilities in Mt. Pleasant, Texas, dated as of
April 30, 1993, prepared for Borrower by Bob G. Derryberry, ARA, ASA,
together with any and all accessories, accessions, parts and
appurtenances thereto, replacements thereof and substitutions
therefor.

     "ERISA" shall mean the Employee Retirement Income Security Act
of 1974, as amended from time to time, and all rules and regulations
from time to time promulgated thereunder.

     "ERISA Affiliate" shall mean each trade or business (whether
or not incorporated) which, together with Borrower, is treated as a
single employer under Section 414(b), (c), (m) or (o) of the Code.

     "Eurodollar Loan" shall mean a Loan bearing interest at a rate
based on a Quoted Rate.

     "Event of Default" shall mean any of the events or conditions
described in Article 9 hereof.

     "Facility B Term Loans" shall mean, collectively, the loans
made pursuant to Section 2.1(c) hereof, and "Facility B Term Loan"
shall mean any loan made pursuant to Section 2.1(c) hereof.

     "Facility B Term Note" or "Facility B Term Notes" shall have
the meanings given to such terms in Section 2.1(c) hereof.

     "Federal Funds Rate" shall mean, for any day, the overnight
federal funds rate in New York City, as published for such day (or, if
such day is not a Business Day, for the next preceding Business Day)
in the Federal Reserve Statistical Release H.15 (519) or any successor
publication, or if such rate is not so published for any day which is
a Business Day, the average of the quotations for such day on
overnight federal funds transactions in New York City received by
Agent from three federal funds brokers of recognized standing selected
by Agent.

     "Fiscal Year" shall mean, for any year, the 52 or 53 week
period ending on the Saturday closest to September 30 of such year,
regardless of whether such Saturday occurs in September or October of
such year.

     "Fixed Charge Coverage Ratio" shall mean, for any fiscal
period, the ratio of (a) the sum of (i) net income before income taxes
for such fiscal period plus (ii) interest expense for such fiscal
period plus (iii) depreciation and amortization for financial
reporting purposes for such fiscal period plus (iv) the aggregate
amount payable during such fiscal period under Operating Leases to (b)
the sum of (i) interest expense for such fiscal period plus (ii)
current maturities for long term debt plus (iii) the aggregate amount
payable during such fiscal period under Operating Leases, in each case
calculated for Borrower and its Subsidiaries on a consolidated basis
in accordance with GAAP.

     "Funded Debt" shall mean, collectively, (a) the aggregate
principal amount of Indebtedness for borrowed money which would, in
accordance with GAAP, be classified as long-term debt, together with
the current maturities thereof; (b) all Indebtedness outstanding under
any revolving credit, line of credit or similar agreement providing
for borrowings (and any extensions or renewals thereof),
notwithstanding that any such Indebtedness is created within one year
of the expiration of such agreement; (c) the principal component of
obligations under Capital Lease; and (d) any other Indebtedness
bearing interest or carrying a similar payment requirement (including
any Indebtedness issued at a discount to its face amount), calculated
in all case for Borrower and its Subsidiaries on a consolidated basis
in accordance with GAAP.

     "GAAP" shall mean generally accepted accounting principles
consistently applied and maintained throughout the period indicated
and consistent with the prior financial practice of Borrower and any
of its predecessors, as reflected in the financial information
referred to in Section 5.11 hereof.

     "Indebtedness" shall mean, as applied to any Person at any
time, (a) all indebtedness, obligations or other liabilities of such
Person (i) for borrowed money or evidenced by debt securities,
debentures, acceptances, notes or other similar instruments, and any
accrued interest, fees and charges relating thereto; (ii) under profit
payment agreements or similar agreement; (iii) with respect to letters
of credit issued for such Person's account; (iv) to pay the deferred
purchase price of property or services, except unsecured accounts
payable and accrued expenses arising in the ordinary course of
business; or (v) in respect of Capital Leases; (b) all indebtedness,
obligations or other liabilities of such Person or others secured by a
Lien on any property of such Person, whether or not such indebtedness,
obligations or liabilities are assumed by such Person, all as of such
time; (c) all indebtedness, obligations or other liabilities of such
Person in respect of any foreign exchange contract, interest rate
protection agreement, interest rate future, interest rate option,
interest rate swap, interest rate cap or other interest rate hedge
arrangement, net of liabilities owed to such Person by the
counterparties thereon; (d) all preferred stock subject (upon the
occurrence of any contingency or otherwise) to mandatory redemption;
(e) Indebtedness of others guaranteed by such Person.

     "Intangible Assets" shall mean license agreements, trademarks,
trade names, patents, capitalized research and development,
proprietary products (the results of past research and development
treated as long term assets and excluded from Inventory) and goodwill
(all determined on a consolidated basis in accordance with GAAP).

     "Interest Period" shall mean, in connection with any
Eurodollar Loan, the period beginning on the date such Eurodollar Loan
is made and continuing for one, two, three or six months as selected
by Borrower in its notice of Conversion or Continuation. 
Notwithstanding the foregoing, however, (a) any applicable Interest
Period which would otherwise end on a day which is not a Business Day
shall be extended to the next succeeding Business Day unless such
Business Day falls in another calendar month, in which case such
Interest Period shall end on the immediately preceding Business Day,
(b) with respect to Eurodollar Loans, any applicable Interest Period
which begins on a day for which there is no numerically corresponding
day in the calendar month during which such Interest Period is to end
shall (subject to clause (a) above) end on the last day of such
calendar month, and (c) no Interest Period shall extend beyond any
date as would interfere with the repayment obligations of Borrower
hereunder.

     "Land" shall mean the real estate or interest therein
described in Exhibit "A" attached hereto and incorporated herein by
this reference, all fixtures or other improvements situated thereon
and all rights, titles and interests appurtenant thereto.

     "Leases" shall mean any and all leases, subleases, licenses,
concessions or other agreements (written or oral, now or hereafter in
effect), whether an Operating Lease or a Capital Lease, which grant a
possessory interest in and to, together with and all security and
other deposits made in connection therewith and all other agreements,
such as architect's contracts, engineer's contracts, utility
contracts, maintenance agreements and service contracts, which in any
way relate to the design, use, occupancy, operation, maintenance,
enjoyment or ownership of the Equipment or the Mortgaged Property.

     "Leverage Ratio" shall mean, on any date, the ratio of (a)
Funded Debt, as of such date, to (b) the sum of (i) Net Worth as of
such date, and (ii) Funded Debt, as of such date, in each case
computed for the Borrower and its Subsidiaries on a consolidated basis
in accordance with GAAP.

     "Lien" means any mortgage, deed of trust, deed to secure debt,
pledge, hypothecation, assignment for security, security interest,
encumbrance, lien or charge of any kind, whether voluntarily incurred
or arising by operation of law, by statute, by contract, or otherwise,
affecting any property, including any agreement to grant any of the
foregoing, any conditional sale or other title retention agreement,
any lease in the nature of a security interest, and/or the filing of
or agreement to give any financing statement (other than a precaution-
ary financing statement with respect to a lease that is not in the na-
ture of a security interest) under the UCC or comparable law of any
jurisdiction with respect to any property.

     "Loan" shall mean either a Term Loan, a Standby/Term Loan or a
Facility B Term Loan, and "Loans" shall mean, collectively, all Term
Loans, Standby/Term Loans and Facility B Term Loans.  Loans may be
either Eurodollar Loans or Base Rate Loans, each of which is a "type"
of Loan.

     "Loan Documents" shall mean this Agreement, the Deed of Trust,
the Second Deed of Trust, the Third Deed of Trust, the Notes, any
financing statements covering portions of the Collateral and any and
all other instruments, documents, and agreements now or hereafter
executed and/or delivered by Borrower or its Subsidiaries in
connection herewith, or any one, more, or all of the foregoing, as the
context shall require, and "Loan Document" shall mean any one of the
Loan Documents.

     "Loan Percentage" shall mean, as to each Bank, that amount,
expressed as a percentage, equal to the ratio of the outstanding
principal amount of such Bank's Loans to the aggregate outstanding
principal amount of the Loans, provided that the Loan Percentage of
each Bank shall be increased or decreased, as appropriate, to reflect
any assignments made pursuant to Sections 13.4, 13.4(c) hereof.

     "Majority Banks" shall mean, at any time, Banks holding at
least sixty-seven percent (67%) of the aggregate outstanding principal
amount of the Loans.

     "Material Adverse Effect" shall mean any event or condition
which, alone or when taken with other events or conditions occurring
or existing concurrently therewith (a) has or is reasonably expected
to have a material adverse effect on the business, operations,
condition (financial or otherwise), assets, liabilities, properties or
prospects of Borrower or any of its Subsidiaries or of the industry in
which Borrower operates; (b) has or is reasonably expected to have any
material adverse effect whatsoever on the validity or enforceability
of this Agreement, the Deed of Trust, the Second Deed of Trust, the
Third Deed of Trust or any other Loan Document; (c) materially impairs
or is reasonably expected to materially impair either the ability of
Borrower to pay and perform the Obligations; (d) materially impairs or
is reasonably expected to materially impair the ability of the Banks
to enforce their rights and remedies under this Agreement and the Loan
Documents; or (e) has or is reasonably expected to have any material
adverse effect on the Collateral, the Liens of the Banks in the
Collateral or the priority of such Liens.

     "Maturity Date" shall mean June 30, 2000.

     "Mortgaged Property" shall mean the Land, Leases, Equipment
and all other property (real, personal or mixed) which is conveyed by
the Deed of Trust, the Second Deed of Trust, the Third Deed of Trust
or any other Loan Document in which a Lien is therein created and all
other property (real, personal or mixed) on which a Lien is placed or
granted to secure the repayment or the performance of the Obligations.

     "MPPAA" shall mean the Multiemployer Pension Plan Amendments
Act of 1980, amending Title IV of ERISA.

     "Multiemployer Plan" shall have the same meaning as set forth
in Section 4001(a)(3) of ERISA.

     "Net Worth" shall mean the excess of Borrower's total assets
over Total Liabilities, excluding, however, from the definition of
assets the amount of (a) any write-up in the book value of any asset
resulting from a revaluation thereof subsequent to the later to occur
of        (1) the Closing Date and  the date Borrower acquired such
              asset; (b) treasury stock; (c) receivables from
              Affiliates of Borrower; and (d) unamortized original
              issue debt discount, all determined on a consolidated
              basis for Borrower and its Subsidiaries in accordance
              with GAAP.

     "Notes" shall mean, collectively, the Term Notes, the
Standby/Term Notes and the Facility B Term Notes.

     "Obligations" shall mean the Loans and any and all other
indebtedness, liabilities and obligations of Borrower and its
Subsidiaries, or any of them, to any Bank of every kind and nature
(including, without limitation, interest, charges, expenses,
attorneys' fees and other sums chargeable to Borrower by Agent or any
Bank and future advances made to or for the benefit of Borrower),
arising under this Agreement, the Deed of Trust, the Second Deed of
Trust, the Third Deed of Trust or the other Loan Documents, whether
direct or indirect, absolute or contingent, primary or secondary, due
or to become due, now existing or hereafter acquired.

     "Operating Leases" shall mean all leases of (or other
agreements, conveying the right to use) real and/or personal property
(other than short term leases which are cancelable at any time by the
lessee) which are not required to be classified and accounted for as
capital leases on a balance sheet under GAAP (including Statement of
Financial Accounting Standards No. 13 of the Financial Accounting
Standards Board) and "Operating Lease" shall mean any one of the
Operating Leases.

     "Participant" shall mean any bank or other entity to which a
Bank sells a participating interest in any Loan or Loans pursuant to
Section 13.4(b) hereof and "Participants" shall mean, collectively,
all banks or other entities to which any Bank sells a participating
interest in any Loan or Loans pursuant to Section 13.4(b) hereof.

     "PBGC" shall mean the Pension Benefit Guaranty Corporation
established under ERISA.

     "Permitted Liens" shall mean:  (a) Liens existing on the date
hereof with respect to the Mortgaged Property and which the Agent and
the Banks permit to be listed on Schedule B of the Title Insurance;
(b) Liens in favor of Agent; (c) the interest of lessors under
Operating Leases permitted hereunder; (d) Liens for (i) property taxes
not delinquent, (ii) taxes not yet due, (iii) pledges or deposits made
under Workmen's Compensation, Unemployment Insurance, Social Security
and similar legislation, or in connection with appeal or surety bonds
incident to litigation, or to secure statutory obligations, and
(iv) mechanics' and materialmen's Liens with respect to liabilities
which are not yet due or which are being contested in good faith and
not listed on Schedule B of the Title Insurance; and (e) purchase
money Liens on Equipment; provided, however, that (i) such Lien is
created within 120 days of the acquisition of such Equipment;
(ii) such Lien attaches only to the specific items of Equipment so
acquired; (iii) such Lien secures only the Indebtedness incurred to
acquire such Equipment; and (iv) the aggregate principal amount of
Indebtedness secured by such Liens does not exceed $10,000,000 at any
one time outstanding.

     "Person" shall mean and include any individual, sole
proprietorship, partnership, joint venture, trust, unincorporated
organization, association, corporation, institution, entity, party or
government (whether national, federal, state, county, city, municipal,
or otherwise, including, without limitation, any instrumentality,
division, agency, body or department thereof).

     "Plan" shall mean any employee benefit plan, program,
arrangement, practice or contract, maintained by or on behalf of the
Borrower or an ERISA Affiliate, which provides benefits or
compensation to or on behalf of employees or former employees, whether
formal or informal, whether or not written, including but not limited
to the following types of plans:

     (i)    Executive Arrangements - any bonus, incentive
  compensation, stock option, deferred compensation, commission,
  severance, "golden parachute," "rabbi trust," or other
  executive compensation plan, program, contract, arrangement or
  practice ("Executive Arrangements");

     (ii) ERISA Plans - any "employee benefit plan", except
  any Multiemployer Plan, as defined in Section 3(3) of ERISA,
  whether maintained by or for a single employee or by or for
  multiple employees, including, but not limited to, any defined
  benefit pension plan, profit sharing plan, money purchase
  plan, savings or thrift plan, stock bonus plan, employee stock
  ownership plan,  or any plan, fund, program, arrangement or
  practice providing for medical (including post-retirement
  medical), hospitalization, accident, sickness, disability, or
  life insurance benefits ("ERISA Plans");

     (iii)  Other Employee Fringe Benefits - any stock
  purchase, vacation, scholarship, day care, prepaid legal
  services, severance pay or other fringe benefit plan, program,
  arrangement, contract or practice ("Fringe Benefit Plans");
  and

     (iv) Multiemployer Plan - any Multiemployer Plan.

     "Quoted Rate" shall mean, when used with respect to an
Interest Period for a Eurodollar Loan, the quotient of (i) the offered
rate quoted by Agent in the interbank Eurodollar market in New York
City, New York or London, England on or about 11:00 a.m. (New York or
London time, as the case may be) two Business Days prior to such
Interest Period for U.S. dollar deposits of an aggregate amount
approximately comparable to the Eurodollar Loan to which the quoted
rate is to be applicable and for a period comparable to such Interest
Period, divided by (ii) one minus the Reserve Percentage.  For
purposes of this definition, (a) "Reserve Percentage" shall mean with
respect to any Interest Period, the percentage which is in effect on
the first day of such Interest Period under Regulation D as the
maximum reserve requirement for member banks of the Federal Reserve
System in New York City with deposits comparable in amount to those of
Agent against Eurocurrency Liabilities.  (The Quoted Rate for the
applicable period shall be adjusted automatically on and as of the
effective date of any change in the applicable Reserve Percentage); 
and (b) "Eurocurrency Liabilities" has the meaning assigned to that
term in Regulation D, as in effect from time to time.

     "Regulation D" shall mean Regulation D of the Board of
Governors of the Federal Reserve System, as it may be amended from
time to time.

     "Regulatory Change" shall mean, with respect to any Bank, the
adoption on or after the date hereof of any applicable federal, state,
or foreign law, rule or regulation or any change after such date in
any such federal, state or foreign law, rule or regulation (including,
without limitation, Regulation D), or any adoption or change in the
interpretation or administration thereof by any court, governmental
authority, central bank or comparable agency or monetary authority
charged with the interpretation or administration thereof, or
compliance by such Bank with any request or directive made after such
date (whether or not having the force of law) of any such court,
authority, central bank or comparable agency or monetary authority.

     "Reportable Event" shall have the meaning set forth in Section
4043 of ERISA.

     "Second Deed of Trust" shall mean the Deed of Trust,
Assignment of Rents and Security Agreement dated July 29, 1994,
recorded in Volume 853, Page 75 Titus County, Texas Records, executed
by Borrower conveying a second Lien security interest in the Mortgaged
Property to secure repayment of the Standby/Term Loans and performance
of certain of the Obligations, and all amendments thereto, recorded or
to be recorded in the Titus County, Texas Deed Records.

     "Standby/Term Loans" shall mean, collectively, the loans made
pursuant to Section 2.1(b) hereof, and "Standby/Term Loan" shall mean
any loan made pursuant to Section 2.1(b) hereof.

     "Standby/Term Note" or "Standby/Term Notes" shall have the
meanings given to such terms in Section 2.1(b) hereof.

     "Subordinated Notes" shall mean the $100,000,000 Pilgrim's
Pride Corporation Senior Subordinated Notes Due 2003, issued under the
Subordinated Notes Indenture.

     "Subordinated Notes Indenture" shall mean that certain
Indenture dated as of June 3, 1993, between Borrower, as Issuer, and
Texas Commerce Bank, National Association, successor to Ameritrust
Texas National Association, as Trustee providing for the issuance of
Borrower's Senior Subordinated Notes Due 2003, in an aggregate
principal amount not to exceed $100,000,000.

     "Subsidiary" shall mean, as to any Person, any other Person,
of which more than fifty percent (50%) of the outstanding shares of
capital stock or other ownership interest having ordinary voting power
to elect a majority of the board of directors of such corporation or
similar governing body of such other Person (irrespective of whether
or not at the time stock or other ownership interests of any other
class or classes of such other Person shall have or might have voting
power by reason of the happening of any contingency) is at the time
directly or indirectly owned or controlled by such Person or by one or
more "Subsidiaries" of such Person.

     "Tangible Net Worth" shall mean the Net Worth minus the amount
of all Intangible Assets of the Borrower and its Subsidiaries,
determined on a consolidated basis in accordance with GAAP.

     "Term Loans" shall mean, collectively, the loans made pursuant
to Section 2.1(a) hereof and "Term Loan" shall mean any loan made
pursuant to Section 2.1(a) hereof.

     "Term Note" and "Term Notes" shall have the meanings given to
such terms in Section 2.1(a) hereof.

     "Third Deed of Trust" shall mean the Deed of Trust, Assignment
of Rents and Security Agreement of even date herewith, executed by
Borrower conveying a third Lien security interest in the Mortgaged
Property to secure repayment of the Facility B Term Loans and
performance of certain of the Obligations, and all amendments thereto,
recorded or to be recorded in the Titus County, Texas Deed Records.

     "Title Company" shall mean the issuer of the Title Insurance.

     "Title Insurance" shall mean the mortgagee's policy(ies) of
title insurance, all in form and substance satisfactory to the Agent
and Banks and containing no exceptions (printed or otherwise) which
are unacceptable to the Agent and Banks, in the full amount(s),
securing such interest(s) and issued by a title company (or, if the
Agent or the Banks so require, by several title companies on a re-insured or 
co-insured basis, at the Agent or the Banks' option)
acceptable to the Agent and Banks.

     "Total Liabilities" shall mean all obligations, indebtedness
or other liabilities of any kind or nature, fixed or contingent, due
or not due, which, in accordance with GAAP, would be classified as a
liability on the balance sheet of Borrower.

     "Transferee" shall mean any Participant or Assignee under this
Agreement and "Transferees" shall mean all Participants and Assignees
under this Agreement.

     "UCC" shall mean the Uniform Commercial Code as in effect in
the State of New York. 

     "Working Capital Credit Agreement" shall mean that certain
Secured Credit Agreement, dated as of May 27, 1993, among the
Borrower, Harris Trust and Savings Bank, individually and as Agent,
and the other banks party thereto, as hereafter amended, modified or
supplemented from time to time, together with any agreement governing
Indebtedness incurred to refinance in its entirety the Indebtedness
and commitments then outstanding or permitted to be outstanding under
such Working Capital Credit Agreement.

       b.   Use of Defined Terms.  All terms defined in this
          Agreement and the Exhibits hereto shall have the same
          defined meanings when used in any other Loan Document,
          unless the context shall require otherwise.

       c.   Accounting Terms; Calculations.  All accounting
          terms not specifically defined herein shall have the
          meanings generally attributed to such terms under
          GAAP.  Calculations hereunder shall be made and
          financial data required hereby shall be prepared, both
          as to classification of items and as to amounts, in
          accordance with GAAP, consistently applied (except as
          otherwise specifically required herein).

       d.   Other Terms.  All other terms used in this
          Agreement which are not specifically defined herein
          but which are defined in the UCC shall have the
          meanings set forth therein.

       e.   Terminology.  All personal pronouns used in this
          Agreement, whether used in the masculine, feminine or
          neuter gender, shall include all other genders; the
          singular shall include the plural, and the plural
          shall include the singular.  Titles of Articles and
          Sections in this Agreement are for convenience only,
          and neither limit nor amplify the provisions of this
          Agreement, and all references in this Agreement to
          Articles, Sections, Subsections, paragraphs, clauses,
          subclauses, Exhibits or Schedules shall refer to the
          corresponding Article, Section, Subsection, paragraph,
          clause, subclause of, Exhibit or Schedule attached to,
          this Agreement, unless specific reference is made to
          the articles, sections or other subdivisions of,
          Exhibits or Schedules to, another document or
          instrument.

       f.   Exhibits.  All Exhibits and Schedules attached
          hereto are by reference made a part hereof.


2.    THE LOANS

       a.   Loans.

     i.     Term Loans.

       (1)  The Banks have heretofore made "Term Loans" under,
            and as such term is defined in, the Original Loan
            Agreement, to Borrower in the aggregate original
            principal amount of Twenty-Eight Million Dollars
            ($28,000,000.00), continued as the "Term Loans" under
            the Amended and Restated Loan Agreement.  Borrower
            acknowledges and agrees that the Term Loans
            outstanding on the date hereof under the Amended and
            Restated Loan Agreement shall be Term Loans under this
            Agreement and are hereinafter referred to individually
            as a "Term Loan" and collectively as the "Term
            Loans").  Contemporaneously with the execution with
            this Agreement, Borrower has executed amended and
            restated term notes in the aggregate amount of
            $15,400,000.00, the current aggregate outstanding
            principal balance of the Term Loans, substantially in
            the form of Exhibit B attached hereto, payable to each
            Bank in the principal face amount of such Bank's Loan
            Percentage of the Term Loans (together with any and
            all amendments, modifications and supplements thereto,
            and any renewals, replacements or extensions thereof
            (including, but not limited to, pursuant to Sections
            13.4 and 13.4(e) hereof), in whole or in part,
            individually a "Term Note" and, collectively, the
            "Term Notes").

       (2)  The aggregate principal amount of the Term Loans
            shall be repaid in twenty (20) quarterly installments
            of principal, payable on March 31, June 30, September
            30 and December 31 of each year, commencing September
            30, 1995, with the first nineteen (10) such quarterly
            installments being in the amount of Seven Hundred
            Thousand and No/100 Dollars ($700,000) each and with
            the twentieth (20th) and final such quarterly
            installment being in an amount equal to the
            then-outstanding aggregate principal amount of the
            Term Loans, together with all accrued but unpaid
            interest thereon.

     ii.    Standby/Term Loans.

       (1)  The Banks have heretofore agreed to make
            "Standby/Term Loans" up to the aggregate principal
            amount of Ten Million Dollars  ($10,000,000.00) under,
            and as such term is defined in, the Amended and
            Restated Loan Agreement, to Borrower as requested by
            Borrower in accordance with the provisions of Section
            2.3 thereof, from time to time on and after the date
            thereof and up to, but not including, September 20,
            1995.  Borrower acknowledges that the current
            aggregate outstanding principal balance of the
            Standby/Term Loans is $10,000,000.00, the maximum
            amount of the Commitment (as defined in the Amended
            and Restated Loan Agreement) which is hereby reduced
            to zero of the date hereof rather than on September
            20, 1995 by agreement of the parties hereto.  Borrower
            acknowledges and agrees that the Standby/Term Loans
            outstanding on the date hereof under the Amended and
            Restated Loan Agreement shall be Standby/Term Loans
            under this Agreement and are hereinafter referred to
            individually as a "Standby/Term Loan" and collectively
            as the "Standby/Term Loans"). Contemporaneously with
            the execution with this Agreement, Borrower has
            executed amended and restated standby/term notes in
            the aggregate amount of $10,000,000.00, the current
            aggregate outstanding principal balance of the
            Standby/Term Loans, substantially in the form of
            Exhibit C-1 attached hereto, payable to each Bank in
            the principal face amount of such Bank's Loan
            Percentage of the Standby/Term Loans, (together with
            any and all amendments, modifications and supplements
            thereto, and any renewals, replacements or extensions
            thereof (including, but not limited to, pursuant to
            Sections 13.4 and 13.4(e) hereof), in whole or in
            part, individually a "Standby/Term Note" and
            collectively the "Standby/Term Notes").  Standby/Term
            Loans, once borrowed and repaid, may not be
            reborrowed.

       (2)  The aggregate principal amount of the Standby/Term
            Loans shall be repaid in twenty (20) quarterly
            installments of principal, payable on March 31, June
            30, September 30 and December 31 of each year,
            commencing September 30, 1995, with the first nineteen
            (19) such installments each being in an amount equal
            to One Hundred Sixty-Seven Thousand and No/100 Dollars
            ($167,000.00) and the final such quarterly installment
            being in an amount equal to the then-outstanding
            unpaid aggregate principal amount of the Standby/Term
            Loans, together with all accrued but unpaid interest
            thereon.

     iii.   Facility B Term Loans.

       (1)  Subject to the terms and conditions hereof and
            provided there exists no Default or Event of Default,
            each Bank severally agrees to make on the Closing Date
            loans (each a "Facility B Term Loan" and collectively
            the "Facility B Term Loans"), as requested by Borrower
            in accordance with the provisions of Section 2.3
            hereof, to Borrower in an aggregate amount of Five
            Million and No 100 Dollars ($5,000,000.00). The
            Facility B Term Loans made by each Bank shall be
            evidenced by a promissory note, substantially in the
            form of Exhibit C-2 attached hereto, payable to such
            Bank in the principal face amount of such Bank's Loan
            Percentage of the Facility B Term Loans (together with
            any and all amendments, modifications and supplements
            thereto, and any renewals, replacements or extensions
            thereof (including, but not limited to, pursuant to
            Sections 13.4 and 13.4(e) hereof), in whole or in
            part, individually a "Facility B Term Note" and
            collectively the "Facility B Term Notes").  Facility B
            Term Loans, once borrowed and repaid, may not be
            reborrowed.

       (2)  The aggregate principal amount of the Facility B
            Term Loans shall be repayable in sixteen (16)
            quarterly installments of principal, payable on March
            31, June 30, September 30 and December 31 of each
            year, commencing September 30, 1996, with the first
            fifteen (15) such installments each being in an amount
            equal to Eighty Three Thousand Five Hundred and No/100
            Dollars ($83,500.00) and the final such quarterly
            installment being in an amount equal to the then-outstanding 
            unpaid aggregate principal amount of the
            Facility B Term Loans, together with all accrued but
            unpaid interest thereon.

       b.   Borrowing Procedures. Borrower shall give the
          Agent notice of Borrower's request for the funding of
          the Loans in accordance with Section 2.8 hereof.  Not
          later than 11:00 a.m (New York time), on the date
          specified for each borrowing hereunder, each Bank
          shall make available to the Agent the amount of the
          Loan to be made by such Bank, in immediately available
          funds at an account with Creditanstalt designated by
          the Agent.  The Agent shall, subject to the terms and
          conditions of this Agreement, not later than 1:00 p.m.
          (New York time) on the Business Day specified for such
          borrowing, make such amount available to Borrower at
          the Agent's office in New York, New York.

       c.   Loan Account; Statements of Account.  The Banks
          will maintain one or more loan accounts for Borrower
          to which such Bank will charge all amounts advanced to
          or for the benefit of Borrower hereunder or under any
          of the other Loan Documents and to which such Bank
          will credit all amounts collected under each such
          credit facility from or on behalf of such Borrower. 
          The Banks will account to Borrower periodically with a
          statement of charges and payments made pursuant to
          this Agreement, and each such account statement shall
          be deemed final, binding and conclusive, absent
          manifest error, unless such Bank is notified by
          Borrower in writing to the contrary within thirty (30)
          days of the date of each account statement.  Any such
          notice shall only be deemed an objection to those
          items specifically objected to therein.  The unpaid
          principal amount of the Loans, the unpaid interest
          accrued thereon, the interest rate or rates applicable
          to such unpaid principal amount, and the accrued and
          unpaid fees, premiums and other amounts due hereunder
          shall at all times be ascertained from the records of
          the Banks and such records shall constitute prima
          facie evidence of the amounts so due and payable.

       d.   Use of Proceeds.  The proceeds of the Loans shall
          be used for  Borrower's general working capital needs; 
          expenditures incurred under any Capital Leases; 
          acquisitions permitted by Section 7.3 hereof; and  in
          the case of any proceeds of the Standby/Term Loans to
          repay the Indebtedness under the Subordinated Notes
          Indenture.  No portion of the proceeds of any Loan may
          be used to "purchase" or "carry" any "margin stock,"
          as such terms are defined in Regulations G, T, U or X
          of the Board of Governors of the Federal Reserve
          System, or to extend credit for the purpose of
          purchasing or carrying margin stocks.

       e.   Several Obligations of the Banks; Remedies
          Independent.  The failure of any Bank to make any Loan
          to be made by it on the date specified therefor shall
          not relieve any other Bank of its obligation to make
          its Loan on such date, but neither any Bank nor the
          Agent shall be responsible for the failure of any
          other Bank to make a Loan to be made by such other
          Bank.  The amounts payable by the Borrower at any time
          hereunder and under the Notes to each Bank shall be a
          separate and independent debt and each Bank shall be
          entitled to protect and enforce its rights arising out
          of this Agreement and the Notes, and it shall not be
          necessary for any other Bank or the Agent to consent
          to, or be joined as an additional party in, any
          proceeding for such purposes.

       f.   Payments.  

     i.     Each payment by the Borrower to Agent pursuant to any
          of the Notes shall be made prior to 1:00 p.m. (New York
          time) on the date due and shall be made without set-off or
          counterclaim to the Agent at the address set forth in
          Section 13.8 below or at such other place or places as
          Agent may designate from time to time in writing to
          Borrower and in such amounts as may be necessary in order
          that all such payments (after withholding for or on
          account of any present or future taxes, levies, imposts,
          duties or other similar charges of whatsoever nature
          imposed on any Bank by any government or any political
          subdivision or taxing authority thereof, other than any
          tax on or measured by the net income of any such Bank
          pursuant to the income tax laws of the jurisdiction where
          such Bank's principal or lending office is located) shall
          not be less than the amounts otherwise specified to be
          paid under the Notes.  Each such payment shall be in
          lawful currency of the United States of America and in
          immediately available funds.  If the due date of any
          payment hereunder or under any of the Notes would
          otherwise fall on a day which is not a Business Day, then
          such payment shall be due on the next succeeding Business
          Day and interest shall be payable on the principal amount
          of such payment for the period of such extension.

     ii.    Except to the extent otherwise provided herein:   the
          funding of the Loans by the Banks under Section 2.1 hereof
          shall be made by the relevant Banks pro rata according to
          their respective Loan Percentages;  the Conversion and
          Continuation of Loans of a particular type shall be made
          pro rata among the relevant Banks according to their Loan
          Percentage of the Loans and the then current Interest
          Period for each Eurodollar Loan shall be coterminous; and 
          each payment or prepayment of principal of Loans and each
          payment of interest by Borrower shall be made for the
          account of relevant Banks prorata in accordance with their
          Loan Percentage.

       g.   Prepayment.

     i.     Upon written notice to the Agent in accordance with
          Section 2.8, Borrower may, at its option, prepay the
          Loans, in whole or in part, in integral multiples of
          $100,000, on the date specified in such notice, without
          premium or penalty.

     ii.    All prepayments shall be applied first to the
          aggregate outstanding principal amount of the Term Loans,
          so long as any Term Loans are outstanding, and then to the
          Standby/Term Loans, so long as any Standby/Term Loans are
          outstanding and then to the Facility B Term Loans.

     iii.   All prepayments of the Loans shall be applied to
          the principal installments thereof in the inverse
          order of their maturities.

     iv.    Borrower may not prepay any Loan which is a Eurodollar
          Loan prior to the last day of the Interest Period
          applicable to such Eurodollar Loan unless Borrower pays to
          the Bank, concurrently with such prepayment, all amounts
          payable to the Bank pursuant to Sections 3.6 and 3.7
          hereof.

       h.   Certain Notices. All notices given by Borrower to
          the Agent of Conversions, Continuations or prepayments
          of Loans hereunder and the request by Borrower for the
          funding of the Loans shall either be oral, with prompt
          written confirmation by telecopy, or in writing, with
          such written confirmation or writing, in the case of a
          Conversion or Continuation, to be substantially in the
          form of Exhibit D attached hereto; shall be
          irrevocable; shall be effective only if received by
          Agent prior to 10:00 a.m. (New York time):  not later
          than the date such Loan is to be Converted or
          Continued as a Base Rate Loan;  three (3) Business
          Days prior to the date such Loan is to be Converted or
          Continued as a Eurodollar Loan;  fifteen (15) days
          prior to any such prepayment, in the case of a
          prepayment of any Loans; or  four (4) Business Days
          prior to the date any Loans are to be funded.  Each
          such notice to prepay any Loans shall specify the
          Loans to be prepaid, the amount of the Loans to be
          prepaid and the date of such prepayment.  Each such
          notice of Conversion or Continuation shall specify:  
          the amount of such Conversion or Continuation (which
          shall be an integral multiple of $100,000 and, if a
          Eurodollar Loan, shall be in a minimum principal
          amount of $1,000,000);  whether such Loan will be
          Converted or Continued as a Eurodollar Loan or as a
          Base Rate Loan;  the date such Loan is to be Converted
          or Continued (which shall be a Business Day and, if
          such Loan is to Convert or Continue a Eurodollar Loan
          then outstanding, shall not be prior to the then
          current Interest Period for such outstanding Loan);
          and  if such Loan is a Eurodollar Loan, the duration
          of the Interest Period with respect thereto.  The
          request for the funding of the Loans and each request
          for a Conversion or Continuation of a Loan or for any
          other financial accommodation by Borrower pursuant to
          this Agreement or the other Loan Documents shall
          constitute (x) an automatic warranty and
          representation by Borrower to each Bank that there
          does not then exist a Default or Event of Default or
          any event or condition which, with the making of such
          Loan, would constitute a Default or Event of Default
          and (y) an affirmation that as of the date of said
          request all of the representations and warranties of
          Borrower contained in this Agreement and the other
          Loan Documents are true and correct in all material
          respects, both before and after giving effect to the
          application of the proceeds of the Loans.  If on the
          last day of the Interest Period of any Eurodollar Loan
          hereunder, Agent has not received a notice hereunder
          to Convert, Continue or prepay such Loan, Borrower
          shall be deemed to have submitted a notice to convert
          such Loan to a Base Rate Loan, if such Loan was a
          Eurodollar Loan, or to continue such Loan as a Base
          Rate Loan, if such Loan was a Base Rate Loan.


3.     INTEREST

       a.   Interest.  Borrower, the Banks and the Agent agree
          that, effective as of July 31, 1995, the following
          shall apply:

     i.     Subject to modification pursuant to Subsection (b)
          below and Section 10.1 hereof, the average daily
          outstanding principal amount of the Loans and all other
          sums payable by Borrower hereunder shall bear interest
          from July 31, 1995 until paid in full at the following
          rates:

       (1)    the outstanding principal amount of each
            Eurodollar Loan shall bear interest at a fixed rate of
            interest per annum equal to the Quoted Rate for the
            then-current Interest Period for such Loan plus one
            and eight-tenths percent (1.8%), calculated daily on
            the basis of a 360-day year and actual days elapsed;

       (2)    the outstanding principal amount of each Base Rate
            Loan and all other sums payable by Borrower hereunder
            shall bear interest at a fluctuating rate per annum
            equal to the Base Rate plus one-fourth percent (1/4%),
            calculated daily on the basis of a 360-day year and
            actual days elapsed; and

       (3)    the outstanding principal amount of any payment on
            any Loan or other Obligations which is not paid in
            full when due, together with accrued and unpaid
            interest thereon (to the extent permitted by law),
            shall bear interest at the Default Rate.

     ii.    Accrued interest shall be payable  in the case of Base
          Rate Loans, monthly on the first day of each month
          hereafter for the previous month, commencing with the
          first such day following the date hereof;  in the case of
          a Eurodollar Loan, on the last day of each Interest Period
          provided, however, that if any Interest Period in respect
          of a Eurodollar Loan is longer than three (3) months, such
          interest prior to maturity shall be paid on the last
          Business Day of each three (3) month interval within such
          Interest Period as well as on the last day of such
          Interest Period;  in the case of any Loan, upon the
          payment or prepayment thereof;  in the case of any other
          sum payable hereunder as set forth elsewhere in this
          Agreement or, if not so set forth, on demand; and  in the
          case of interest payable at the Default Rate, on demand.

       b.   Interest Period.  The Interest Period for any
          Eurodollar Loan shall commence on the date such Loan
          is made as specified in the notice of Conversion or
          Continuation applicable thereto and shall continue for
          a period of one (1), two (2), three (3) or six (6)
          months, in the case of a Eurodollar Loan, as specified
          in the notice of Conversion or Continuation for such
          Eurodollar Loan.  If Borrower fails to specify the
          duration of the Interest Period for any Eurodollar
          Loan in the notice of Conversion or Continuation
          therefor, such Loan shall instead be Converted to, or
          Continued as, as the case may be, a Base Rate Loan.

       c.   Limitations on Interest Periods.   Borrower may
          not select any Interest Period which extends beyond
          the first day of any succeeding calendar quarter,
          unless, giving effect to such Loan, the aggregate
          outstanding principal amount of Eurodollar Loans
          having Interest Periods extending beyond the first day
          of each such calendar quarter is not greater than the
          aggregate principal amount of the Loans scheduled to
          be outstanding immediately following such first day of
          the calendar quarter.  Borrower shall not have in
          effect at any given time during the term of this
          Agreement more than three (3) different interest rates
          for Loans (whether Base Rate Loans or Eurodollar
          Loans).

       d.   Conversions and Continuations.     Borrower shall have
          the right, from time to time, to Convert Loans of one
          type to Loans of the other type and to Continue Loans
          of one type as Loans of the same type provided that
          Eurodollar Loans may not be Converted to Base Rate
          Loans prior to the end of the Interest Period
          applicable thereto.

       e.   Illegality.   Notwithstanding any other provision
          of this Agreement to the contrary, in the event that
          it shall become unlawful for any Bank to obtain funds
          in the London interbank market or for such Bank to
          maintain a Eurodollar Loan, then such Bank shall
          promptly notify Borrower whereupon  the right of
          Borrower to request any Eurodollar Loan shall
          thereupon terminate and  any Eurodollar Loan then
          outstanding shall commence to bear interest at the
          rate applicable to Base Rate Loans on the last day of
          the then applicable Interest Period or at such earlier
          time as may be required by law.

       f.   Increased Costs and Reduced Return.   

     i.     If any Regulatory Change shall:

       (1)    subject any Bank to any tax, duty or other charge
            with respect to any Eurodollar Loan, or shall change
            the basis of taxation of payments to such Bank of the
            principal of or interest on any Eurodollar Loan
            (except for changes in the rate of tax on the overall
            net income of such Bank imposed by the jurisdiction in
            which such Bank's principal office is located); or

       (2)    impose, modify or deem applicable any reserve,
            special deposit or similar requirement (including,
            without limitation, any such requirement imposed by
            the Board of Governors of the Federal Reserve System)
            against assets of, deposits with or for the account
            of, or credit extended by, any Bank; or

       (3)     impose on any Bank or on the London interbank
            market any other condition or expense with respect to
            this Agreement, the Notes or their making, issuance or
            maintenance of any Eurodollar Loan;

and the result of any such Regulatory Change is, in such Bank's
reasonable judgment, to increase the costs which such Bank determines
are attributable to its making or maintaining any Loan, or its
obligation to make available any Loan, or to reduce the amount of any
sum received or receivable by such Bank under this Agreement or the
Notes with respect to any Loan, then, within ten (10) days after
demand by such Bank, Borrower shall pay to such Bank such additional
amount or amounts as will compensate such Bank for such increased cost
or reduction.

     ii.    In addition to any amounts payable pursuant to
          subsection (a) above, if any Bank shall have determined
          that the applicability of any law, rule, regulation or
          guideline adopted pursuant to or arising out of the July
          1988 report of the Basle Committee on Banking Regulations
          and Supervisory Practices entitled "International
          Convergence of Capital Measurement and Capital Standards,"
          or the adoption after the date hereof of any other law,
          rule, regulation or guideline regarding capital adequacy,
          or any change in any of the foregoing or in the
          enforcement or interpretation or administration of any of
          the foregoing by any court or any governmental authority,
          central bank or comparable agency charged with the
          enforcement or interpretation or administration thereof,
          or compliance by such Bank (or any lending office of such
          Bank) or such Bank's holding company with any request or
          directive regarding capital adequacy (whether or not
          having the force of law) of any such authority, central
          bank or comparable agency, has or would have the effect of
          reducing the rate of return on such Bank's capital or on
          the capital of such Bank's holding company, if any, as a
          consequence of its making or maintaining any Loan or its
          obligations under this Agreement to a level below that
          which such Bank or such Bank's holding company could have
          achieved but for such applicability, adoption, change or
          compliance (taking into consideration such Bank's policies
          and the policies of such Bank's holding company with
          respect to capital adequacy) by an amount deemed by such
          Bank to be material, then, upon demand by such Bank, the
          Borrower shall pay to such Bank from time to time such
          additional amount or amounts as will compensate such Bank
          or such Bank's holding company for any such reduction
          suffered.  Each demand for compensation pursuant to this
          paragraph (b) shall be accompanied by a certificate of
          such Bank in reasonable detail setting forth the
          computation of such compensation (including the reason
          therefor), which certificate shall be conclusive, absent
          manifest error.

       g.   Indemnity.   Borrower hereby indemnifies and
          agrees to hold harmless the Agent and each Bank from
          and against any and all losses or expenses which it
          may sustain or incur as a consequence of failure by
          Borrower to consummate any notice of funding,
          prepayment, Conversion or Continuation made by
          Borrower, including, without limitation, any such loss
          or expense arising from interest or fees payable by
          any Bank to lenders of funds obtained by it in order
          to maintain any Eurodollar Loan.  Borrower hereby
          further indemnifies and agrees to hold harmless the
          Agent and each Bank from and against any and all
          losses or expenses which it may sustain or incur as a
          consequence of prepayment of any Eurodollar Loan on
          other than the last day of the Interest Period for
          such Loan (including, without limitation, any
          prepayment pursuant to Sections 2.7 and 3.5 hereof). 
          Borrower's obligations under this Section shall
          survive the termination of this Agreement and the
          repayment of the Obligations.

       h.   Notice of Amounts Payable to Banks.  If any Bank
          shall seek payment of any amounts from Borrower
          pursuant to Section 3.6 hereof it shall notify
          Borrower of the amount payable by Borrower to such
          Bank thereunder.  A certificate of such Bank seeking
          payment pursuant to Section 3.6 hereof, setting forth
          in reasonable detail the factual basis for and the
          computation of the amounts specified, shall be
          conclusive, absent manifest error, as to the amounts
          owed.  Borrower's obligations under this Section shall
          survive the termination of this Agreement and the
          repayment of the Obligations.

       i.   Inability to Determine Quoted Rate.   In the event
          that Agent determines (which determination shall be
          conclusive absent manifest error) that, by reason of
          circumstances affecting the London interbank market,
          quotation of interest rates for the relevant deposits
          referred to in the definition of the "Quoted Rate"
          herein are not being provided in the relevant amounts
          or for the relevant maturities for the purpose of
          determining rates of interest for a Eurodollar Loan,
          Agent will give notice of such determination to
          Borrower and at least one day prior to the date
          specified in such notice of Conversion or Continuation
          for such Loan to be made.  If any such notice is
          given, no Bank shall have any obligation to make
          available, maintain, Convert or Continue Eurodollar
          Loans.  Until the earlier of the date any such notice
          has been withdrawn by Agent or the date when Agent and
          Borrower have mutually agreed upon an alternate method
          of determining the rates of interest payable on a
          Eurodollar Loan, as the case may be, Borrower shall
          not have the right to have or maintain any Eurodollar
          Loan.

       j.   Interest Savings Clause.   It is expressly
          stipulated and agreed to be the intent of Borrower,
          the Agent and the Banks at all times to comply with
          applicable law governing the maximum rate or amount of
          interest payable on the Indebtedness (or applicable
          United States federal law to the extent that it
          permits any Bank to contract for, charge, take,
          reserve or receive a greater amount of interest).  If
          the applicable law is ever judicially interpreted so
          as to render usurious any amount called for under this
          Agreement, the Notes or under any of the other Loan
          Documents, or contracted for, charged, taken, reserved
          or received with respect to the Obligations, or if
          Agent's exercise of the option to accelerate the
          maturity of the Notes or if any prepayment by Borrower
          results in Borrower having paid any interest in excess
          of that permitted by applicable law, then it is
          Borrower's, the Agent's and the Banks' express intent
          that all excess amounts theretofore collected by the
          Agent and/or the Banks be credited on the principal
          balance of the Notes (or, if the Notes and all other
          Obligations have been or would thereby be paid in
          full, refunded to Borrower), and the provisions of the
          Notes and the other Loan Documents immediately be
          deemed reformed and the amounts thereafter collectible
          hereunder and thereunder reduced, without the
          necessity of the execution of any new documents, so as
          to comply with the applicable law, but so as to permit
          the recovery of the fullest amount otherwise called
          for hereunder or thereunder, not exceeding the highest
          lawful amount of interest on the Obligations.  All
          sums paid or agreed to be paid to the Agent and/or the
          Banks for the use, forbearance or detention of the
          Obligations shall, to the extent permitted by
          applicable law, be amortized, prorated, allocated and
          spread throughout the full term of the Notes until
          payment in full so that the rate or amount of interest
          on account of the Obligations does not exceed the
          usury ceiling from time to time in effect and
          applicable to the Notes for so long as the Obligations
          are outstanding.  Notwithstanding anything to the
          contrary contained herein or in any of the other Loan
          Documents, it is not the intention of the Agent or any
          Bank to accelerate the maturity or demand payment of
          any interest that has not accrued at the time of such
          acceleration or to collect unearned interest at the
          time of such acceleration.


4.    SECURITY INTEREST - COLLATERAL

       a.   Security Interest.  As security for the
          Obligations, Borrower hereby grants to Agent, for the
          benefit of the Banks, a continuing Lien on and
          security interest in and to the following described
          property, whether now owned or existing or hereafter
          acquired or arising or in which Borrower now has or
          hereafter acquires any rights (sometimes herein
          collectively referred to as "Collateral"):

     i.     Leases;

     ii.    Equipment;

     iii.   all books and records (including, without
          limitation, computer programs, print-outs and other
          computer materials and records) of Borrower pertaining
          to any of the foregoing; and

     iv.    all accessions to, substitutions for and all
          replacements, products and proceeds of the foregoing,
          including, without limitation, proceeds of insurance
          policies insuring the Collateral.

       b.   Mortgaged Property.  As additional security for
          the Obligations, Borrower has heretofore granted to
          Agent, for the benefit of the Banks, a first (except
          for prior liens expressly permitted thereby) priority
          lien on and security interest in the Mortgaged
          Property, evidenced by the Deed of Trust, and a second
          (except for prior Liens expressly permitted thereby)
          priority Lien on and security interest in the
          Mortgaged Property, evidenced by the Second Deed of
          Trust, and Borrower has of even date herewith granted
          to Agent, for the benefit of the Banks, a third
          (except for prior Liens expressly permitted thereby)
          priority Lien on and security interest in the
          Mortgaged Property, evidenced by the Third Deed of
          Trust, recorded or to be recorded in the Titus County,
          Texas Deed Records.

       c.   Perfection of Liens.  Until the payment and
          satisfaction in full of all Obligations, Agent's Liens
          in the Collateral and all products and proceeds
          thereof, shall continue in full force and effect. 
          Borrower shall perform any and all steps requested by
          Agent or the Majority Banks to perfect, maintain and
          protect Agent's Liens in the Collateral including,
          without limitation, executing and filing financing or
          continuation statements, or amendments thereof, in
          form and substance satisfactory to Agent.  Agent may
          file one or more financing statements disclosing
          Agent's Liens under this Agreement without Borrower's
          signature appearing thereon and Borrower shall pay the
          costs of, or incidental to, any recording or filing of
          any financing statements concerning the Collateral. 
          Borrower agrees that a carbon, photographic,
          photostatic, or other reproduction of this Agreement
          or of a financing statement is sufficient as a
          financing statement.

       d.   Right to Inspect.  Agent and each Bank (or any
          person or persons designated by it), in its sole
          discretion, shall have the right to call at the
          Mortgaged Property or any place of business or
          property location of Borrower at any reasonable time,
          and, without hindrance or delay, to inspect the
          Collateral and to inspect, review, check and make
          extracts from Borrower's books, records, journals,
          orders, receipts and any correspondence and other data
          relating to the Collateral, to Borrower's business or
          to any other transactions between the parties hereto
          and to discuss any of the foregoing with any of
          Borrower's employees, officers and directors and with
          its independent accountants.


5.    REPRESENTATIONS AND WARRANTIES

  In order to induce the Banks to enter into this Agreement and to
make Loans hereunder, Borrower hereby makes the following
representations and warranties to the Agent and the Banks which shall
be true and correct on the date hereof and shall continue to be true
and correct at the time of the making of any Loan and until the Loans
have been repaid in full:

       a.   Corporate Existence and Qualification.  Each of
          Borrower and its Subsidiaries is a corporation duly
          organized, validly existing and in good standing under
          the laws of its jurisdiction of incorporation. 
          Borrower is duly qualified as a foreign corporation in
          good standing in the State of Texas and in each other
          state wherein the conduct of its business or the
          ownership of its property requires such qualification
          and each Subsidiary is duly qualified as a foreign
          corporation in good standing in each state wherein the
          conduct of its business or the ownership of its
          property requires such qualification.

       b.   Chief Executive Office; Collateral Locations.
          Borrower's and each Subsidiary's principal place of
          business, chief executive office and office where it
          keeps all of its books and records is located at 110
          South Texas Street, Pittsburg, Texas 75686, and except
          as set forth on Schedule 5.2 attached hereto neither
          Borrower nor any of its respective predecessors has
          had any other chief executive office or principal
          place of business outside the State of Texas during
          the preceding four (4) months.  Schedule 5.2 attached
          hereto and incorporated herein by reference sets forth
          a true, correct and complete list of all places of
          business and all locations at which Collateral is
          located.

       c.   Corporate Authority.  Borrower has the corporate
          power and authority to execute, deliver and perform
          under this Agreement and the Loan Documents to which
          it is a party, and to borrow hereunder, and has taken
          all necessary and appropriate corporate action to
          authorize the execution, delivery and performance of
          this Agreement and such Loan Documents.

       d.   No Consents; Validity and Binding Effect.  The
          execution, delivery and performance of this Agreement,
          the Deed of Trust, the Second Deed of Trust, the Third
          Deed of Trust and the other Loan Documents are not in
          contravention of any provisions of law or any
          agreement or indenture by which Borrower is bound or
          of the Articles of Incorporation or By-laws of
          Borrower or any of its Subsidiaries and do not require
          the consent or approval of any governmental body,
          agency, authority or other Person which has not been
          obtained and a copy thereof furnished to Agent.  This
          Agreement and the other Loan Documents to which
          Borrower is a party constitute the valid and legally
          binding obligations of Borrower, enforceable against
          Borrower in accordance with their respective terms.

       e.   No Material Litigation.  Except as set forth on
          Schedule 5.5 hereof, there are no proceedings pending
          or threatened before any court or  administrative
          agency which might have a Material Adverse Effect.

       f.   Corporate Organization.  The Articles of
          Incorporation and By-laws of Borrower and each of its
          Subsidiaries are in full force and effect under the
          laws of their respective states of incorporation and
          all amendments to said Articles of Incorporation and
          By-laws have been duly and properly made under and in
          accordance with all applicable laws.

       g.   Solvency.  Giving effect to the execution and
          delivery of the Loan Documents and the consummation of
          the transactions contemplated hereby, including, but
          not limited to, the making and/or continuing, as the
          case may be, of the Loans hereunder, the issuance of
          the Subordinated Notes and the making of the initial
          loans under the Working Capital Credit Agreement,
          Borrower (a) has capital sufficient to carry on its
          business and transactions and all business and
          transactions in which it is about to engage, (b) is
          able to pay its debts as they mature and (c) owns
          property whose fair saleable value is greater than the
          amount required to pay its debts.

       h.   Adequacy of Intangible Assets.  Borrower and its
          Subsidiaries possess all Intangible Assets reasonably
          necessary to continue to conduct their respective
          businesses as heretofore conducted by them.

       i.   Taxes.  Borrower and each of its Subsidiaries has
          filed all federal, state, local and foreign tax
          returns, reports and estimates which are required to
          be filed, and all taxes (including penalties and
          interest, if any) shown on such returns, reports and
          estimates which are due and not yet delinquent or
          which are otherwise due and payable have been fully
          paid.  Such tax returns properly and correctly reflect
          the income and taxes of Borrower and its Subsidiaries
          for the periods covered thereby except for such
          amounts which in the aggregate are immaterial.

       j.   ERISA.  Except as disclosed on Schedule 5.10
          attached hereto and incorporated herein by reference:

     i.     Identification of Plans.  Neither the Borrower, any of
          its Subsidiaries nor any ERISA Affiliate maintains or
          contributes to, or has maintained or contributed to, any
          Plan or Multiemployer Plan that is subject to regulation
          by Title IV of ERISA;

     ii.    Compliance.  Each Plan has at all times been
          maintained, by its terms and in operation, in accordance
          with all applicable laws, except for such noncompliance
          (when taken as a whole) that will not have a Material
          Adverse Effect on Borrower or any of its Subsidiaries;

     iii.   Liabilities.  Neither the Borrower, any of its
          Subsidiaries nor any ERISA Affiliate is currently or
          to the best knowledge of Borrower or any ERISA
          Affiliate will become subject to any liability
          (including withdrawal liability), tax or penalty
          whatsoever to any person whomsoever with respect to
          any Plan including, but not limited to, any tax,
          penalty or liability arising under Title I or Title IV
          of ERISA or Chapter 43 of the Code;

     iv.    Funding.  The Borrower, its Subsidiaries and each
          ERISA Affiliate have made full and timely payment of  all
          amounts  required to be contributed under the terms of
          each Plan and applicable law and  all material amounts
          required to be paid as expenses of each Plan.  No Plan has
          any "amount of unfunded benefit liabilities" (as defined
          in Section 4001(a)(18) of ERISA); and

     v.     Insolvency; Reorganization.  No Plan is insolvent
          (within the meaning of Section 4245 of ERISA) or in
          reorganization (within the meaning of Section 4241 of
          ERISA).

       k.   Financial Information.

     (a)  The consolidated financial statements of Borrower and its
Subsidiaries for fiscal year ended October 1, 1994 disclosed in the
Borrower's Form 10-K certified by Ernst & Young, and the consolidated
interim financial statements of Borrower and its Subsidiaries for the
six-month period ended April 1, 1995, each consisting of a
consolidated balance sheet, consolidated statement of income (loss),
consolidated statement of changes in stockholders equity and
consolidated statement of cash flows, copies of which have been
delivered by Borrower to each Bank, are true and correct in all
material respects and contain no material misstatement or omission,
and fairly present the consolidated financial position, assets and
liabilities of Borrower and its Subsidiaries as of the date thereof
and the consolidated results of operations of Borrower and its
Subsidiaries for the period then ended, and as of the date thereof
there are no liabilities of Borrower or any of its Subsidiaries, fixed
or contingent, which are material that are not reflected in such
financial statements.

     (b)  Since the date of the financial statements referred to in
subsection (a), there has been no material adverse change in the
assets, liabilities, financial position or results of operations of
Borrower or any of its Subsidiaries, and neither Borrower nor any of
its Subsidiaries has (i) incurred any obligation or liability, fixed
or contingent, which would have a Material Adverse Effect, (ii)
incurred any Indebtedness or obligations under Capital Leases, other
than the Obligations, and trade payables and other liabilities arising
in the ordinary course of the Borrower's or such Subsidiary's
business, or (iii) guaranteed the obligations of any other Person.

       l.   Title to Assets.  Borrower has good and marketable
          title to and ownership of the Collateral, including,
          but not limited to, the Mortgaged Property, and
          Borrower and its Subsidiaries have good and marketable
          title to and ownership of all of their other assets,
          free and clear of all Liens except for Permitted Liens
          or as otherwise expressly permitted by this Agreement.

       m.   Violations of Law.  Neither Borrower nor any of
          its Subsidiaries is in violation of any applicable
          statute, regulation or ordinance of any governmental
          entity, or of any agency thereof, which violation
          could have a Material Adverse Effect.

       n.   No Default.  Neither Borrower nor any of its
          Subsidiaries is in default with respect to (a) any
          note, indenture, loan agreement, mortgage, lease, deed
          or other similar agreement relating to Indebtedness to
          which Borrower or such Subsidiary is a party or by
          which Borrower or such Subsidiary is bound or (b) any
          other instrument, document or agreement to which
          Borrower or such Subsidiary is a party or by which
          Borrower or such Subsidiary or any of their respective
          properties are bound, which other instrument, document
          or agreement is material to the operations or
          condition, financial or otherwise, of Borrower or such
          Subsidiary.

       o.   Corporate and Trade or Fictitious Names.  During
          the five (5) years immediately preceding the date of
          this Agreement, neither Borrower nor any of its
          Subsidiaries nor any of their respective predecessors
          has been known as or used any corporate, trade or
          fictitious name other than its current corporate name
          and except as disclosed on Schedule 5.15 hereto.

       p.   Equipment.  The Equipment is and shall remain in
          good condition, normal wear and tear excepted, meets
          all standards imposed by any governmental agency, or
          department or division thereof having regulatory
          authority over such material and its use and is
          currently usable in the normal course of Borrower's
          business.

       q.   Investments.  Except as set forth in Schedule 5.17
          hereof, Borrower has no Subsidiaries and has no
          interest in any partnership or joint venture with, or
          any investment in, any Person.

       r.   Trade Relations.  There exists no actual or, to
          the best of Borrower's knowledge, threatened
          termination, cancellation or limitation of, or any
          modification or change in, the business relationship
          of Borrower with any material supplier or with any
          company whose contracts with Borrower individually or
          in the aggregate are material to the operations of
          Borrower; after the consummation of the transactions
          contemplated by this Agreement, the Subordinated Notes
          Indenture and the Working Capital Credit Agreement, to
          the best knowledge of Borrower, all such companies and
          suppliers will continue a business relationship with
          Borrower on a basis materially no less favorable to
          Borrower than that heretofore conducted; and there
          exists no condition or  state of facts or
          circumstances which would have a Material Adverse
          Effect on Borrower or prevent Borrower from conducting
          its business after the consummation of the
          transactions contemplated by this Agreement in
          essentially the same manner in which it has heretofore
          been conducted by Borrower.

       s.   Broker's or Finder's Fees.  No broker's or
          finder's fees or commissions have been incurred or
          will be payable by Borrower or any of its
          Subsidiaries, or any of its predecessors, to any
          Person in connection with the transactions
          contemplated by this Agreement.  Notwithstanding the
          foregoing, Borrower acknowledges that MONY Capital
          Markets, Inc. has been paid that certain broker's
          commission contemplated in the Original Loan
          Agreement.

       t.   Security Interest.  This Agreement creates a valid
          security interest in the Collateral securing payment
          of the Obligations, subject only to Permitted Liens,
          and all filings and other actions necessary or
          desirable to perfect and protect such security
          interest have been taken, and, Agent has a valid and
          perfected first priority security interest in the
          Collateral, subject only to Permitted Liens.

       u.   Regulatory Matters.  Borrower is not subject to
          regulation under the Investment Company Act of 1940,
          as amended, the Public Utility Holding Company Act of
          1935, as amended, the Federal Power Act, the
          Interstate Commerce Act or any other federal or state
          statue or regulation which materially limits its
          ability to incur indebtedness or its ability to
          consummate the transactions contemplated hereby.

       v.   Disclosure.  Neither this Agreement nor any other
          instrument, document, agreement, financial statement
          or certificate furnished to the Agent or any of the
          Banks by or on behalf of Borrower in connection with
          this Agreement or the Working Capital Credit Agreement
          contains an untrue statement of a material fact or
          omits to state any material fact necessary to make the
          statements therein, in light of the circumstances
          under which they were made, not misleading or omits to
          state any fact which, insofar as Borrower can now
          foresee, may in the future materially and adversely
          affect the condition (financial or otherwise),
          business, operations or properties of Borrower and its
          Subsidiaries which has not been set forth in this
          Agreement or in an instrument, document, agreement,
          financial statement or certificate furnished to the
          Agent and the Banks in connection herewith.

     i.     Registration Statement. Borrower has heretofore
          furnished to the Agent and each Bank a true, correct and
          complete copy, including all amendments thereto, of the
          Registration Statement, on Form S-1, in respect to the
          Subordinated Notes and all other materials filed with the
          Securities and Exchange Commission in connection with the
          issuance of the Subordinated Notes.  No portion of the
          Registration Statement, the prospectus relating thereto,
          nor any other written material filed with the Securities
          and Exchange Commission with respect thereto, relating to
          the Borrower or its Subsidiaries or their respective
          businesses, does or will contain any statement which is
          false or misleading with respect to any material fact, or
          does or will omit to state a material fact necessary in
          order to make the statements therein not false or
          misleading, or otherwise violate any state or federal
          securities laws.

6.    AFFIRMATIVE COVENANTS

  Borrower covenants to the Agent and the Banks that from and after
the date hereof, and until the satisfaction in full of the
Obligations, it will and it shall cause each of its Subsidiaries to,
unless the Majority Banks otherwise consent in writing:

       a.   Records Respecting Collateral.  Keep all records
          with respect to the Collateral at its office set forth
          in Section 5.2 hereof and not remove such records from
          such address without the prior written consent of the
          Majority Banks.

       b.   Reporting Requirements.  Furnish or cause to be
          furnished to the Agent and each Bank:

     i.     As soon as practicable, and in any event within 45
          days after the end of each fiscal quarter, consolidated
          interim unaudited financial statements, including a
          balance sheet, income statement and statement of cash
          flow, for the quarter and year-to-date period then ended,
          prepared in accordance with GAAP, consistent with the past
          practice or Borrower and its Subsidiaries, and certified
          as to truth and accuracy thereof by the chief financial
          officer of Borrower;

     ii.    As soon as available, and in any event within 90 days
          after the end of each fiscal year, consolidated audited
          annual financial statements, including a consolidated
          balance sheet, consolidated statement of income,
          consolidated statement of shareholders' equity and
          consolidated statement of cash flow for the fiscal year
          then ended, prepared in accordance with GAAP, in
          comparative form and accompanied by the unqualified
          opinion of a nationally recognized firm of independent
          certified public accountants regularly retained by
          Borrower and its Subsidiaries and acceptable to the
          Majority Banks;

     iii.   Together with the annual financial statements
          referred to in clause (b) above, a statement from such
          independent certified public accountants that, in
          making their examination of such financial statements,
          they obtained no knowledge of any Default or Event of
          Default or, in lieu thereof, a statement specifying
          the nature and period of existence of any such Default
          or Event of Default disclosed by their examination;

     iv.    Together with the annual or interim financial
          statements referred to in clauses (a) and (b) above, a
          certificate of the chief financial officer of Borrower
          certifying that, to the best of his knowledge, no Default
          or Event of Default has occurred and is continuing or, if
          a Default or Event of Default has occurred and is
          continuing, a statement as to the nature thereof and the
          action which is proposed to be taken with respect thereto;
          

     v.     Promptly after the sending or filing thereof, as the
          case may be, copies of any definitive proxy statements,
          financial statements or reports which Borrower or any
          Subsidiary sends to its shareholders and copies of any
          regular periodic and special reports or registration
          statements which Borrower or any Subsidiary files with the
          Securities and Exchange Commission (or any governmental
          agency substituted therefor), including, but not limited
          to, all Form 10-K and Form 10-Q reports, or any report or
          registration statement which Borrower or any Subsidiary
          files with any national securities exchange;

     vi.    At least fifteen (15) Business Days prior to the time
          any consent by the Majority Banks will be necessary,
          Borrower and any Subsidiary shall furnish to the Agent and
          the Banks all pertinent information regarding any proposed
          acquisition by Borrower or any Subsidiary to which the
          consent of the Majority Banks is required hereunder which
          is reasonably necessary or appropriate to permit the Banks
          to evaluate such acquisitions in a manner consistent with
          prudent banking standards;

     vii.   Together with the annual and, if requested by the
          Agent, interim financial statements referred to in
          clauses (a) and (b) above, a certificate of the chief
          financial officer of Borrower certifying as to  the
          items of Equipment subject to purchase money Liens
          permitted by clause (e) of the definition of
          "Permitted Liens" and  the principal amount of
          Indebtedness secured by each such Lien; and

     viii.    Such other information respecting the condition or
            operations, financial or otherwise, of Borrower and
            its Subsidiaries as the Agent or the Banks may from
            time to time reasonably request.

       c.   Tax Returns.  File all federal, state and local
          tax returns and other reports that Borrower and its
          Subsidiaries are required by law to file, maintain
          adequate reserves for the payment of all taxes,
          assessments, governmental charges and levies imposed
          upon them, their respective incomes, or their
          respective profits, or upon any property belonging to
          them, and pay and discharge all such taxes,
          assessments, governmental charges and levies prior to
          the date on which penalties attach thereto.

       d.   Compliance With Laws.  Comply with all laws,
          statutes, rules, regulations and ordinances of any
          governmental entity, or of any agency thereof,
          applicable to Borrower or any Subsidiary, a violation
          of which, in any respect, might have a Material
          Adverse Effect, including, without  limitation, any
          such laws, statutes, rules, regulations or ordinances
          regarding the collection, payment, and deposit of
          employees' income, unemployment, and Social Security
          taxes and with respect to pension liabilities.

       e.   ERISA.

     i.     At all times make prompt payment of contributions
          required to meet the minimum funding standards set forth
          in Section 302 and 305 of ERISA with respect to each Plan
          and otherwise comply with ERISA and all rules and
          regulations promulgated thereunder in all material
          respects;

     ii.    Promptly after the occurrence thereof with respect to
          any Plan, or any trust established thereunder, notify the
          Agent and the Banks of (i) a "reportable event" described
          in Section 4043 of ERISA and the regulations issued from
          time to time thereunder (other than a "reportable event"
          not subject to the provisions for 30-day notice to the
          PBGC under such regulations), or (ii) any other event
          which could subject the Borrower, any of its Subsidiaries
          or any ERISA Affiliate to any tax, penalty or liability
          under Title I or Title IV of ERISA or Chapter 43 of the
          Code which, in the aggregate, would have a Material
          Adverse Effect on the Borrower, any of its Subsidiaries or
          upon their respective financial condition, assets,
          business operations, liabilities or property;

     iii.   At the same time and in the same manner as such
          notice must be provided to the PBGC, or to a Plan
          participant, beneficiary or alternative payee, give
          the Agent and the Banks any notice required under
          Section 101(d), 302(f)(4), 303, 307, 4041(b)(1)(A) or
          4041(c)(1)(A) or ERISA or under Section 401(a)(29) or
          412 of the Code with respect to any Plan;

     iv.    Furnish to the Agent or any Bank, promptly upon the
          request of the Agent or such Bank, (i) true and complete
          copies of any and all documents, government reports and
          determination or opinion letters for any Plan; and (ii) a
          current statement of withdrawal liability, if any, for
          each Multiemployer Plan; and

     v.     Furnish to the Agent or any Bank, promptly upon the
          request of the Agent or such Bank therefor, such
          additional information concerning any Plan that relates to
          the ability of Borrower to make any payments hereunder, as
          may be reasonably requested.

       f.   Books and Records.  Keep adequate records and
          books of account with respect to its business
          activities in which proper entries are made in
          accordance with GAAP reflecting all its financial
          transactions.

       g.   Notifications to the Agent and the Banks.  Notify
          the Agent and the Banks by telephone within ten (10)
          Business Days (with each such notice to be confirmed
          in writing within twelve (12) Business Days following
          such telephone notice):   upon Borrower's learning
          thereof, of any litigation affecting Borrower or any
          of its Subsidiaries claiming damages of $5,000,000 or
          more, individually or when aggregated with other
          litigation pending against Borrower or any of its
          Subsidiaries, whether or not covered by insurance, and
          of the threat or institution of any suit or
          administrative proceeding against Borrower or any of
          its Subsidiaries which may have a Material Adverse
          Effect on Borrower or any of its Subsidiaries, or
          Agent's Lien in the Collateral or the Mortgaged
          Property, and establish such reasonable reserves with
          respect thereto as the Majority Banks may request; 
          upon learning thereof, of any Default or Event of
          Default hereunder;  upon occurrence thereof, of any
          change to the operations, financial condition or
          business of Borrower or any of its Subsidiaries which
          would have a Material Adverse Effect;  upon the
          occurrence thereof, of any amendment or modification
          of the Working Capital Credit Agreement; and  upon the
          occurrence thereof, of Borrower's or any Subsidiary's
          default under (i) any note, indenture, loan agreement,
          mortgage, lease, deed or other similar agreement
          relating to any indebtedness of Borrower or any of its
          Subsidiaries or (ii) any other instrument, document or
          agreement material to the operations or condition,
          financial or otherwise, of Borrower or any of its
          Subsidiaries to which Borrower or any of its
          Subsidiaries is a party or by which Borrower or any of
          its Subsidiaries or any of their respective property
          is bound.

       h.   Insurance.

     i.     Keep all of the Collateral, whether now owned or
          hereafter acquired, insured by insurance companies (i)
          reasonably acceptable to the Majority Banks or having an A
          or better rating according to Best's Insurance Reports;
          Property-Casualty and (ii) licensed to do business in the
          State of Texas against loss or damage by fire or other
          risk usually insured against under extended coverage
          endorsement and theft, burglary, and pilferage, together
          with such other hazards as the Majority Banks may from
          time to time reasonably request, in amounts reasonably
          satisfactory to the Majority Banks and naming Agent as
          loss payee thereon pursuant to a lender's loss payee
          clause satisfactory to the Majority Banks;

     ii.    Keep all of its property other than the Collateral and
          the Mortgaged Property, whether now owned or hereafter
          acquired, insured by insurance companies (i) reasonably
          acceptable to the Majority Banks or having an A or better
          rating according to Best's Insurance Reports; Property-Casualty 
          and (ii) licensed to do business in the State of
          Texas and in all jurisdictions in which such Borrower does
          business against such risks and in such amounts as are
          customarily maintained by others in similar businesses;

     iii.   Maintain at all times liability insurance coverage
          against such risks and in such amounts as are
          customarily maintained by others in similar
          businesses, such insurance to be carried by insurance
          companies (i) reasonably acceptable to the Majority
          Banks or having an A or better rating according to
          Best's Insurance Reports; Property-Casualty and (ii)
          licensed to do business in the State of Texas and in
          all jurisdictions in which such Borrower does
          business; and

     iv.    Deliver certificates of insurance for such policy or
          policies to Agent, containing endorsements, in form
          satisfactory to the Majority Banks, providing that the
          insurance shall not be cancelable, except upon thirty (30)
          days' prior written notice to Agent.

       i.   Preservation of Corporate Existence.  Except as
          permitted by Section 7.4 hereof, preserve and maintain
          its corporate existence, rights, franchises and
          privileges in the jurisdiction of its incorporation.

       j.   Equipment.  Keep and maintain the Equipment in
          good operating condition, reasonable wear and tear
          excepted, shall repair and make all necessary
          replacements thereof so that the operating efficiency
          thereof shall at all times be maintained and preserved
          and, shall not permit any item of Equipment to become
          a fixture to real estate or accession to other
          personal property unless Agent has a first priority
          Lien on or in such real estate or other personal
          property.  Borrower shall, immediately on demand
          therefor by Agent, deliver to Agent any and all
          evidence of ownership of any of the Equipment
          (including, without limitation, certificates of title
          and applications for title, together with any
          necessary applications to have Agent's lien noted
          thereon, in the case of vehicles).

       k.   Additional Collateral.  Intentionally deleted.


7.    NEGATIVE COVENANTS

  Borrower covenants with the Agent and the Banks that from and
after the date hereof and until the termination of this Agreement and
the payment and satisfaction in full of the Obligations, it will not,
and it will not permit its Subsidiaries to, without the prior written
consent of the Majority Banks:

       a.   No Encumbrances.  Create, assume, or suffer to
          exist any Lien of any kind in any of the Collateral or
          the Mortgaged Property except for  Permitted Liens and 
          a Lien on the Equipment and the Mortgaged Property,
          expressly subordinated to the Lien in favor of the
          Agent, in favor of the agent under the Working Capital
          Credit Agreement (the "Working Capital Agent"), as
          security for the Obligations under the Working Capital
          Credit Agreement; provided, however, that concurrently
          with the granting of such Lien in favor of the Working
          Capital Agent, Borrower grants to the Agent, as
          security for the Obligations, a Lien, subordinate only
          to the Lien of the Working Capital Agent, in the
          current assets of Borrower as provided for in Section
          6.11 hereof.

       b.   Asset Sales.

     i.     Sell, lease or dispose of any of the Collateral or any
          interest therein except for the sale of Equipment no
          longer used or useful in the business of Borrower or any
          Subsidiary having  an aggregate value not in excess of
          $1,000,000 during any Fiscal Year or  an aggregate value
          not in excess of $5,000,000 during any Fiscal Year;
          provided that any Equipment sold, leased or otherwise
          disposed of pursuant to this clause (ii) is replaced
          within 90 days after such sale, trade-in or other
          disposition by replacement Equipment which is in good
          operating condition and which has a value and utility at
          least equal to that of the Equipment sold, traded in or
          disposed of and the Agent receives, for the benefit of the
          Banks, a valid perfected first Lien with respect to such
          replacement Equipment, subject only to Permitted Liens; or

     ii.    Sell, lease or otherwise transfer any of its assets
          other than the Collateral except:   in the ordinary course
          of business;  as permitted by Section 7.9;  transfers to
          the Borrower or a Subsidiary;  worn or obsolete property;
          or  any other sale or transfer of assets, which, together
          with all other assets sold or transferred during the
          preceding 12 month period (other than in accordance with
          the preceding clauses (i), (ii), (iii) or (iv)), does not
          exceed 15% of the Borrower's total consolidated tangible
          assets as computed at the time of such sale or transfer.

       c.   Loans and Investments.  Make or retain any loan or
          investment (whether through the purchase of stock,
          obligations or otherwise) in or make any loan or
          advance to, any other Person, whether by acquisition
          of stock indebtedness, other obligations or security
          or by loan, advance, capital contribution, or
          otherwise ("Restricted Investments") other than:

     i.     investments in certificates of deposit having a
          maturity of one year or less issued by any United States
          commercial bank having capital and surplus of not less
          than $50,000,000;

     ii.    investments in an aggregate amount of up to $8,000,000
          in deposits maintained with the First State Bank of
          Pittsburg, Texas;

     iii.   investments in commercial paper rated P1 by
          Moody's Investors Service, Inc. or A1 by Standard &
          Poor's Corporation maturing within 180 days of the
          date of issuance thereof;

     iv.    investments in mutual funds composed of either money
          market securities or marketable obligations of the United
          States or guaranteed by or insured by the United States,
          or those for which the full faith and credit of the United
          States is pledged for the repayment or principal and
          interest thereof; provided that such obligations have a
          final maturity of no more than three years from the date
          acquired by the Borrower;

     v.     investments existing prior to the Closing Date; and

     vi.    investments in a corporate Subsidiary of the Borrower
          provided that such Subsidiary is consolidated with
          Borrower for financial reporting purposes;

unless, immediately after giving effect thereto, the aggregate
Restricted Investments of the Borrower and its Subsidiaries made since
the Closing Date does not exceed 5% of the Borrower's total assets.

       d.   Corporate Structure.  Dissolve or otherwise
          terminate its corporate status; enter into any merger,
          reorganization or consolidation; issue any shares of
          any class of capital stock of any Subsidiary or any
          securities or other instruments for or which are
          convertible into any shares of any class of capital
          stock of any Subsidiary; or make any substantial
          change in the basic type of business conducted by
          Borrower or any Subsidiary as of the date hereof,
          provided that  the Borrower may merge with another
          corporation, if the surviving corporation is the
          Borrower and  a Subsidiary may merge or consolidate
          with or sell, lease or otherwise transfer all or
          substantially all of its assets to:   the Borrower or
          another Subsidiary; or,  another Person if immediately
          after giving effect to the transaction no Default or
          Event of Default would exist.

       e.   Fiscal Year.  Change its fiscal year.

       f.   ERISA.  Take, or fail to take, or permit any ERISA
          Affiliate to take, or fail to take, any action with
          respect to a Plan including, but not limited to, 
          establishing any Plan,  amending any Plan, 
          terminating or withdrawing from any Plan, or 
          incurring an amount of unfunded benefit liabilities,
          as defined in Section 4001(a)(18) of ERISA, where such
          action or failure could have a material adverse effect
          on the Borrower or any Subsidiary, result in a lien on
          the property of the Borrower or any Subsidiary, or
          require the Borrower or any Subsidiary to provide any
          security.

       g.   Relocations; Use of Name.  Relocate its executive
          office; maintain any Collateral at any location other
          than the Mortgaged Property or maintain records with
          respect to Collateral at any locations other than the
          Mortgaged Property or at the location of its chief
          executive office set forth in Section 5.2 hereto; or
          use any corporate name (other than its own) or any
          fictitious name except upon thirty (30) days prior
          written notice to Agent and after the delivery to
          Agent of financing statements, if required by Agent,
          in form satisfactory to Agent.

       h.   Arm's-Length Transactions.  The Borrower will not,
          and will not permit any Subsidiary to, enter into any
          transaction, including without limitation, the
          purchase, sale, lease or exchange of any Collateral,
          or the rendering of any service, with any Affiliate of
          the Borrower or such Subsidiary or any Person except
          in the ordinary course of and pursuant to the
          reasonable requirements of the Borrower's or such
          Subsidiary's business and upon fair and reasonable
          terms not materially less favorable to the Borrower
          than would be obtained in a comparable arm's-length
          transaction with a Person not an Affiliate of the
          Company or such Subsidiary and which would be subject
          to approval by the Borrower's Audit Committee of the
          Board of Directors.

       i.   Dividends.   Declare or pay any dividends on, or
          make any distribution with respect to, its shares of
          any class of capital stock, redeem or retire any
          capital stock, or take any action having an effect
          equivalent to the foregoing (in any fiscal year of
          Borrower or any Subsidiary) except for  the
          declaration and payment of cash dividends by a
          Subsidiary and payable to Borrower and  the
          declaration and payment of cash dividends on the
          capital stock of the Borrower not in excess of $0.08
          per share of the issued and authorized common stock
          plus twenty-five percent (25%) of the net income of
          Borrower, as set forth in the audited financial
          statements for the fiscal year of Borrower immediately
          preceding the year during which such declaration and
          payment of dividends is made; provided, however, that
          at the time such dividend is paid there does not exist
          any Default or Event of Default hereunder or any event
          or condition which, with the payment of such dividend
          would constitute a Default or Event of Default.

       j.   Subordinated Notes.  Neither the Borrower or any
          of its Subsidiaries shall, directly or indirectly:

     i.     purchase, redeem, retire or otherwise acquire for value,
          set apart any money for a sinking, defeasance or other
          analogous fund for, the purchase, redemption, retirement
          or other acquisition of, or make any voluntary payment or
          prepayment of the principal of or interest on, where any
          other amount owing in respect of, the Subordinated Notes
          other than regularly scheduled payments of interest
          thereon; or

     ii.    agree to any amendment, modification or waiver of any
          of the provisions of the Subordinated Notes Indenture.

       k.   Guaranty Fees.  The Borrower will not, and will
          not permit any Subsidiary to, directly or indirectly,
          pay to Mr. and/or Mrs. Lonnie A. Pilgrim or any other
          guarantor of any of the Borrower's Indebtedness,
          obligations and liabilities, any fee or other
          compensation, but excluding salary, bonus and other
          compensation for services rendered as an employee
          (collectively the "Guaranty Fees") except that, so
          long as there is not Default or Event of Default nor
          any event or condition which, with the payment of such
          fee would constitute a Default or Event of Default,
          Borrower may pay Guarantee Fees not to exceed
          $2,000,000 in the aggregate during any fiscal year of
          the Borrower.


8.    FINANCIAL COVENANTS

  Borrower covenants with the Agent and the Banks that from and
after the date hereof and until the termination of this Agreement and
the payment and satisfaction in full of the Obligations, unless the
Majority Banks otherwise consent in writing:

       a.   Leverage Ratio.  The Borrower will not permit the
          ratio of its Leverage Ratio at any time during each
          period specified below to exceed the ratio specified
          below for such period:

       PERIOD                                                 MAXIMUM RATIO

  Closing Date through the penultimate
    day of Fiscal Year 1995                                   0.675:1.000

  At all times thereafter                                     0.650:1.000

       b.   Tangible Net Worth.  The Borrower shall maintain a
          Tangible Net Worth at all times during each period
          specified below of not less than the amount specified
          below for such period: 

     i.     Closing Date through the penultimate day of Fiscal
          Year 1995, $100,000,000, plus 25% of Borrower's
          consolidated net income (but not less than zero) for
          Borrower's Fiscal Year 1995; and

     ii.    For the successive periods commencing on the last day
          of each Fiscal Year thereafter and ending on the
          penultimate day of next succeeding Fiscal Year, with the
          first such period commencing on the last day of Fiscal
          Year 1996, an amount equal to the minimum required
          Tangible Net Worth in effect under this Section 8.2 during
          the immediately preceding period plus 25% of Borrower's
          consolidated net income (but not less than zero) for
          Borrower's Fiscal Year ending on the date the applicable
          period commences.

       c.   Current Ratio.  The Borrower will maintain at all
          times during each period specified below and measured
          as of the last day of each fiscal year a Current Ratio
          of not less than the amount specified below for such
          period:

     PERIOD                                              CURRENT RATIO

  Closing Date through the                               1.15 to 1.00
  last day of Fiscal Year 1998

  At all times thereafter                                1.20 to 1.00

       d.   Fixed Charge Coverage Ratio.  The Borrower will
          not permit its Fixed Charge Coverage Ratio to be less
          than 1.35 to 1.00 as of the last day of each fiscal
          period specified below:

       i.        the eight fiscal quarters of Borrower
            ending September 30, 1995; and

       ii.       the eight fiscal quarters of Borrower
            ending on the last day of each fiscal quarter
            thereafter commencing with the fiscal quarter
            ending December 30, 1995.


9.           EVENTS OF DEFAULT

            The occurrence of any of the following events or
conditions shall constitute an Event of Default hereunder:

            a.          Obligations.  Borrower shall
                 fail to make any payments of principal or
                 interest of the Obligations when due;

            b.          Misrepresentations.  Borrower
                 shall make any representations or
                 warranties in any of the Loan Documents
                 or in any certificate or statement
                 furnished at any time hereunder or in
                 connection with any of the Loan Documents
                 which proves to have been untrue or
                 misleading in any material respect when
                 made or furnished and which continues to
                 be untrue or misleading in any material
                 respect.

            c.          Certain Covenants.  Borrower
                 shall default in the observance or
                 performance of any covenant or agreement
                 contained in Sections 6 (other than
                 Sections 6.7 or 6.11), 7 or 8 of this
                 Agreement and such default continues for
                 more than thirty (30) days after the
                 earlier of  the date of notice thereof to
                 such Borrower by the Agent or  the date
                 Borrower knew or should have known of
                 such default.

            d.          Other Covenants.  Either
                 Borrower shall default in the observance
                 or performance of any other covenant or
                 agreement contained in this Agreement or
                 under any of the other Loan Documents.

            e.          Other Debts.  Either Borrower
                 or any Subsidiary shall default in the
                 payment when due of any Indebtedness
                 under any guaranty, note, indenture or
                 other agreement relating to or evidencing
                 Indebtedness having a principal balance
                 of $1,000,000 or more, including, but not
                 limited to, the Subordinated Notes and
                 the Indebtedness under the Working
                 Capital Credit Agreement, or any event
                 specified in any guaranty, note,
                 indenture or other agreement relating to
                 or evidencing any such Indebtedness shall
                 occur if the effect of such event is to
                 cause or to permit (giving effect to any
                 grace or cure period applicable thereto)
                 the holder or holders of such
                 Indebtedness to cause such Indebtedness
                 to become due, or to be prepaid in full
                 (whether by redemption, purchase or
                 otherwise), prior to its stated maturity.

            f.          Tax Lien.  A notice of Lien,
                 levy or assessment is filed of record
                 with respect to all or any of any
                 Borrower's or any Subsidiary's assets by
                 the United States, or any department,
                 agency or instrumentality thereof, or by
                 any state, county, municipal or other
                 governmental agency, including, without
                 limitation, the PBGC, which in the
                 opinion of the Majority Banks, adversely
                 affects the priority of the Liens granted
                 to Agent hereunder under the Deed of
                 Trust or under the other Loan Documents.

            g.          ERISA.  The occurrence of any
                 of the following events:  (i) the
                 happening of a Reportable Event with
                 respect to any Plan which Reportable
                 Event could result in a material
                 liability for Borrower, any of its
                 Subsidiaries or an ERISA Affiliate or
                 which otherwise could have a material
                 adverse effect on the financial
                 condition, assets, business, operations,
                 liabilities or property of Borrower, any
                 of its Subsidiaries or such ERISA
                 Affiliate; (ii) the disqualification or
                 involuntary termination of a Plan for any
                 reason which could result in a material
                 liability for Borrower, any of its
                 Subsidiaries or an ERISA Affiliate or
                 which otherwise could have a material
                 adverse effect on the financial
                 condition, assets, business, operations,
                 liabilities or property of Borrower, any
                 of its Subsidiaries or such ERISA
                 Affiliate; (iii) the voluntary
                 termination of any Plan while such Plan
                 has a funding deficiency (as determined
                 under Section 412 of the Code) which
                 could result in a material liability for
                 Borrower, any of its Subsidiaries or an
                 ERISA Affiliate or which otherwise could
                 have a material adverse effect on the
                 financial condition, assets, business,
                 operations, liabilities or property of
                 Borrower, any of its Subsidiaries or such
                 ERISA Affiliate; (iv) the appointment of
                 a trustee by an appropriate United States
                 district court to administer any such
                 Plan; (v) the institution of any
                 proceedings by the PBGC to terminate any
                 such Plan or to appoint a trustee to
                 administer any such Plan; (vi) the
                 failure of Borrower to notify the Agent
                 and the Banks promptly upon receipt by
                 Borrower or any of its Subsidiaries of
                 any notice of the institution of any
                 proceeding or other actions which may
                 result in the termination of any such
                 Plan.

            h.          Voluntary Bankruptcy. 
                 Borrower or any of its Subsidiaries
                 shall: (a) file a voluntary petition or
                 assignment in bankruptcy or a voluntary
                 petition or assignment or answer seeking
                 liquidation, reorganization, arrangement,
                 readjustment of its debts, or any other
                 relief under the Bankruptcy Code, or
                 under any other act or law pertaining to
                 insolvency or debtor relief, whether
                 State, Federal, or foreign, now or
                 hereafter existing; (b) enter into any
                 agreement indicating consent to, approval
                 of, or acquiescence in, any such petition
                 or proceeding; (c) apply for or permit
                 the appointment, by consent or
                 acquiescence, of a receiver, custodian or
                 trustee of Borrower or any of its
                 Subsidiaries or for all or a substantial
                 part of its property; (d) make a general
                 assignment for the benefit of creditors;
                 or (e) be unable or shall fail to pay its
                 debts generally as such debts become due,
                 admit in writing its inability or failure
                 to pay its debts generally as such debts
                 become due, or otherwise become
                 insolvent.

            i.          Involuntary Bankruptcy.  There
                 shall have been filed against Borrower or
                 any of its Subsidiaries an involuntary
                 petition in bankruptcy or seeking
                 liquidation, reorganization, arrangement,
                 readjustment of its debts or any other
                 relief under the Bankruptcy Code, or
                 under any other act or law pertaining to
                 insolvency or debtor relief, whether
                 State, Federal or foreign, now or
                 hereafter existing; Borrower or any of
                 its Subsidiaries shall suffer or permit
                 the involuntary appointment of a
                 receiver, custodian or trustee of
                 Borrower or any of its Subsidiaries or
                 for all or a substantial part of its
                 property; or Borrower or any of its
                 Subsidiaries shall suffer or permit the
                 issuance of a warrant of attachment,
                 execution or similar process against all
                 or any substantial part of the property
                 of Borrower or any of its Subsidiaries.

            j.          Suspension of Business.  The
                 suspension of the transaction of the
                 usual business of the Borrower or of the
                 usual business of any of its Subsidiaries
                 or the involuntary dissolution of the
                 Borrower or the involuntary dissolution
                 of any of its Subsidiaries.

            k.          Judgments.  Any judgment,
                 decree or order for the payment of money
                 which, when aggregated with all other
                 judgments, decrees or orders for the
                 payment of money pending against Borrower
                 or any of its Subsidiaries, exceeds the
                 sum of $1,000,000, shall be rendered
                 against Borrower or any of its
                 Subsidiaries and remain unsatisfied and
                 in effect for a period of sixty (60)
                 consecutive days without being vacated,
                 discharged, satisfied or stayed or bonded
                 pending appeal.

            l.          Change in Control.  There
                 occurs a "Change in Control" as such term
                 is defined on the date hereof in the
                 Subordinated Notes Indenture.

            m.          Event of Default under Deed of
                 Trust, Second Deed of Trust or Third Deed
                 of Trust.  There occurs an "Event of
                 Default" under the Deed of Trust, the
                 Second Deed of Trust or the Third Deed of
                 Trust.


10.     REMEDIES

       Upon the occurrence or existence of any Event of Default,
and during the continuation thereof, without prejudice to the rights
of the Agent and the Banks to enforce their claims against Borrower
for damages for failure by Borrower to fulfill any of the obligations
hereunder, the Agent and the Banks shall have the following rights and
remedies, in addition to any other rights and remedies available to
the Agent and the Banks at law, in equity or otherwise:

            a.          Default Rate.  At the election
                 of the Majority Banks, evidenced by
                 written notice to the Borrower, the
                 outstanding principal balance of the
                 Obligations and, to the extent permitted
                 by applicable law, accrued and unpaid
                 interest thereon, shall bear interest at
                 the Default Rate until paid in full.

            b.          Acceleration of the
                 Obligations.  In the event of the
                 occurrence of  an Event of Default set
                 forth in Sections 9.8 or 9.9 hereof, the
                 Obligations shall automatically and
                 immediately become due and payable; and 
                 any other Event of Default, the Majority
                 Banks, at their option, may declare all
                 of the Obligations to be immediately due
                 and payable, whereupon all of the
                 Obligations shall become immediately due
                 and payable, in either case without
                 presentment, demand, protest, notice of
                 non-payment or any other notice required
                 by law relative thereto, all of which are
                 hereby expressly waived by Borrower,
                 anything contained herein to the contrary
                 notwithstanding.

            c.          Set-Off.  The right of each
                 Bank to set-off, without notice to
                 Borrower, any and all deposits at any
                 time credited by or due from such Bank to
                 Borrower, whether in a general or
                 special, time or demand, final or
                 provisional account or any other account
                 or represented by a certificate of
                 deposit and whether or not unmatured or
                 contingent.

            d.          Rights and Remedies of a
                 Secured Party.  All of the rights and
                 remedies of a secured party under the UCC
                 or under other applicable law, all of
                 which rights and remedies shall be
                 cumulative, and none of which shall be
                 exclusive, to the extent permitted by
                 law, in addition to any other rights and
                 remedies contained in this Agreement, and
                 in any of the other Loan Documents.

            e.          Take Possession of Collateral. 
                 The right of the Agent to (a) enter upon
                 the Land, or any other place or places
                 where the Collateral is located and kept,
                 through self-help and without judicial
                 process, without first obtaining a final
                 judgment or giving Borrower notice and
                 opportunity for a hearing on the validity
                 of the Agent's or the Banks' claim and
                 without any obligation to pay rent to
                 Borrower, and remove the Collateral
                 therefrom to the premises of Agent or any
                 agent of Agent, for such time as Agent
                 may desire, in order to effectively
                 collect or liquidate the Collateral,
                 and/or (b) require Borrower to assemble
                 the Collateral and make it available to
                 Agent at a place to be designated by
                 Agent which is reasonably convenient to
                 both Borrower and Agent.

            f.          Sale of Collateral.  The right
                 of the Agent to sell or to otherwise
                 dispose of all or any of the Collateral,
                 at  public or private sale or sales, with
                 such notice as may be required by law, in
                 lots or in bulk, for cash or on credit,
                 all as Agent, in its sole discretion, may
                 deem advisable; such sales may be
                 adjourned from time to time with or
                 without notice.  Agent shall have the
                 right to conduct such sales on Borrower's
                 premises or elsewhere and shall have the
                 right to use Borrower's premises without
                 charge for such sales for such time or
                 times as Agent may see fit.  Agent is
                 hereby granted a license or other right
                 to use, without charge, Borrower's
                 labels, patents, copyrights, rights of
                 use of any name, trade secrets, trade
                 names, trademarks, service marks and
                 advertising matter, or any property of a
                 similar nature, whether owned by Borrower
                 or with respect to which Borrower has
                 rights under license, sublicense or other
                 agreements, as it pertains to the
                 Collateral, in preparing for sale,
                 advertising for sale and selling any
                 Collateral and Borrower's rights under
                 all licenses and all franchise agreements
                 shall inure to the benefit of the Agent
                 and the Banks.  Agent shall have the
                 right to sell, lease or otherwise dispose
                 of the Collateral, or any part thereof,
                 for cash, credit or any combination
                 thereof, and the Agent or any Bank may
                 purchase all or any part of the
                 Collateral at public or, if permitted by
                 law, private sale and, in lieu of actual
                 payment of such purchase price, may set
                 off the amount of such price against the
                 Obligations.  The proceeds realized from
                 the sale of any Collateral shall be
                 applied first to the costs, expenses and
                 reasonable attorneys' fees and expenses
                 incurred by Agent for collection and for
                 acquisition, completion, protection,
                 removal, storage, sale and delivery of
                 the Collateral; second to interest due
                 upon any of the Obligations; and third to
                 the principal of the Obligations.  If any
                 deficiency shall arise, Borrower shall
                 remain liable to the Banks therefor.

            g.          Remedies Under Deed of Trust,
                 Second Deed of Trust and Third Deed of
                 Trust.  The right of the Agent to sell or
                 otherwise dispose of all or any of the
                 Mortgaged Property, in the manner
                 provided for in the Deed of Trust, the
                 Second Deed of Trust, and the Third Deed
                 of Trust all other rights and remedies
                 available to the Agent under the Deed of
                 Trust, the Second Deed of Trust and the
                 Third Deed of Trust.

            h.          Notice.  Any notice required
                 to be given by Agent of a sale, lease,
                 other disposition of the Collateral or
                 any other intended action by Agent, given
                 to Borrower in the manner set forth in
                 Section 13.8 below, ten (10) days prior
                 to such proposed action, shall constitute
                 commercially reasonable and fair notice
                 thereof to Borrower.

            i.          Appointment of Agent as
                 Borrower's Lawful Attorney.  Borrower
                 irrevocably designates, makes,
                 constitutes and appoints Agent (and all
                 persons designated by Agent) as
                 Borrower's true and lawful attorney, and
                 Agent or Agent's agent, may, without
                 notice to Borrower, and at such time or
                 times thereafter as Agent or said agent,
                 in its sole discretion, may determine, in
                 Borrower's or Agent's name do all acts
                 and things necessary, in Agent's sole
                 discretion, to fulfill Borrower's
                 obligations under this Agreement.


11.     CONDITIONS PRECEDENT

       Notwithstanding any other provision of this Agreement, it
is understood and agreed that the Banks shall have no obligation to
make any Loan unless and until the following conditions have been met,
to the sole and complete satisfaction of the Banks, the Agent and
their respective counsel:

            a.          No Injunction.  No action,
                 proceeding, investigation, regulation or
                 legislation shall have been instituted,
                 threatened or proposed before any court,
                 governmental agency or legislative body
                 to enjoin, restrain, or prohibit, or to
                 obtain substantial damages in respect of,
                 or which is related to or arises out of
                 this Agreement or the making of such
                 Loan, or which in the Banks' sole
                 discretion, would make it inadvisable to
                 make such Loan.

            b.          No Material Adverse Change. 
                 Since [October 1, 1994] there shall not
                 have occurred any material adverse change
                 in Borrower's or any Subsidiary's
                 business, or any event, condition, or
                 state of facts which would be expected
                 materially and adversely to affect the
                 prospects of Borrower or any of its
                 Subsidiaries subsequent to consummation
                 of the transactions contemplated by this
                 Agreement as determined by the Majority
                 Banks in their sole discretion.

            c.          No Default or Event of
                 Default.  There shall exist no Default or
                 Event of Default or any event or
                 condition which, with the making of the
                 Loans would constitute a Default or Event
                 of Default.

            d.          Regulatory Restrictions. 
                 Neither Borrower nor any of its
                 Subsidiaries shall be subject to any
                 applicable statute, rule, regulation,
                 order, writ or injunction of any court or
                 governmental authority or agency which
                 would materially restrict or hinder the
                 conduct of Borrower's or such
                 Subsidiary's business as conducted on the
                 date hereof or which would have a
                 material adverse affect on the business,
                 property, assets, operations or
                 condition, financial or otherwise of
                 Borrower or such Subsidiary.

            e.          Compliance with Law.  The
                 Agent shall have received such evidence
                 as it may reasonably request that the
                 Land and the Mortgaged Property and the
                 uses thereof comply in all material
                 respects with all applicable laws,
                 regulations, codes, orders, ordinances,
                 rules and statutes, including, without
                 limitation, those relating to zoning and
                 environmental protection.

            f.          Documentation.  The Agent and
                 the Banks shall have received the
                 following, each duly executed and
                 delivered to the Agent and the Banks, and
                 each to be satisfactory in form and
                 substance to Agent and its counsel:

          i.            the Notes;

          ii.           the Deed of Trust;

          iii.          the Second Deed of Trust;

          iv.           the Third Deed of Trust;

          v.            a Reaffirmation of that certain
                 Environmental Indemnity Agreement dated June 3,
                 1993, reaffirming the warranties and
                 representations made by Borrower thereunder;

          vi.           a certificate signed by the chief
                 executive officer and chief financial officer of
                 Borrower dated as of the Closing Date, stating
                 that the representations and warranties set forth
                 in Article 5 hereof are true and correct in all
                 material respects on and as of such date with the
                 same effect as though made on and as of such date,
                 stating that Borrower is on such date in
                 compliance with all the terms and conditions set
                 forth in this Agreement on its part to be observed
                 and performed, and stating that on such date, and
                 after giving effect to the making of any initial
                 Loan no Default or Event of Default has occurred
                 or is continuing;

          vii.          a certificate executed by the
                 chief financial officer of Borrower dated
                 as of the Closing Date with respect to
                 the Equipment owned by Borrower;

          viii.         a certificate of the Secretary
                 of Borrower dated as of the Closing Date
                 certifying (ii) that attached thereto is
                 a true and correct copy of the By-Laws of
                 Borrower, as in effect on the date of
                 such certification, (ii) that attached
                 thereto is a true and complete copy of
                 Resolutions adopted by the Board of
                 Directors of Borrower, authorizing the
                 execution, delivery and performance of
                 this Agreement and the other Loan
                 Documents; and (iii) as to the incumbency
                 and genuineness of the signatures of the
                 officers of Borrower executing this
                 Agreement or any of the other Loan
                 Documents;

          ix.           a copy of the Articles of Incorporation
                 of the Borrower, and all amendments thereto,
                 certified by the Secretary of State of the State
                 of Delaware dated as of a date close to the
                 Closing Date; 

          x.            copies of all filing receipts or
                 acknowledgements issued by any governmental
                 authority to evidence any filing or recordation
                 necessary to perfect the Liens of Agent in the
                 Collateral and evidence in a form acceptable to
                 the Majority Banks that such Liens constitute
                 valid and perfected first priority Liens;

          xi.           a Good Standing Certificate for Borrower,
                 issued by the Secretary of State of Texas, dated
                 as of a date close to the Closing Date; 

          xii.          certified copies of Borrower's
                 casualty and liability insurance policies
                 with evidence of the payment of the
                 premium therefor, together, in the case
                 of such casualty policies, with loss
                 payable and mortgagee endorsements on
                 Agent's standard form naming Agent as
                 loss payee;

          xiii.         the written opinion of Godwin
                 & Carlton, counsel to Borrower, dated as
                 of the Closing Date, in the form attached
                 hereto as Exhibit E hereto, as to the
                 transactions contemplated by this
                 Agreement; 

          xiv.          assurance from a title
                 insurance company satisfactory to the
                 Agent and the Banks that such title
                 insurance company is committed to cause
                 the Third Deed of Trust to be recorded
                 and, upon recordation of the Third Deed
                 of Trust, to issue its ALTA lender's
                 title insurance policies in a form
                 acceptable to the Agent and in amounts
                 satisfactory to the Agent, showing the
                 Third Deed of Trust as the "insured
                 mortgage" and insuring the validity and
                 priority of the Third Deed of Trust as a
                 Lien upon the specified Owned Real
                 Property, subject only to the First Deed
                 of Trust and the Second Deed of Trust and
                 to the Permitted Liens described in
                 clauses (b) - (d) of the definition
                 thereof; and

          xv.           such other documents, instruments and
                 agreements with respect to the transactions
                 contemplated by this Agreement, in each case in
                 such form and containing such additional terms and
                 conditions as may be reasonably satisfactory to
                 the Majority Banks, and containing, without
                 limitation, representations and warranties which
                 are customary and usual in such documents.

12.     THE AGENT

            a.          Appointment, Powers and
                 Immunities.  Each Bank hereby irrevocably
                 appoints and authorizes the Agent to act
                 as its agent hereunder with such powers
                 as are specifically delegated to the
                 Agent by the terms of this Agreement,
                 together with such other powers as are
                 reasonably incidental thereto.  The Agent
                 (which term as used in this sentence and
                 in Section 12.5 and the first sentence of
                 Section 12.6 hereof shall include
                 reference to its Affiliates and its own
                 and its Affiliates' officers, directors,
                 employees and agents):   shall have no
                 duties or responsibilities except those
                 expressly set forth in this Agreement,
                 and shall not by reason of this Agreement
                 be a trustee for any Bank;  shall not be
                 responsible to the Banks for any
                 recitals, statements, representations or
                 warranties contained in this Agreement or
                 any of the other Loan Documents, or in
                 any certificate or other instrument,
                 document or agreement referred to or
                 provided for in, or received by any of
                 them under, this Agreement or any of the
                 other Loan Documents, or for the value,
                 validity, effectiveness, genuineness,
                 enforceability or sufficiency of this
                 Agreement, any Note or any of the other
                 Loan Documents or for any failure by any
                 Borrower or any other Person to perform
                 any of its obligations hereunder or
                 thereunder;  subject to Section 12.3
                 hereof, shall not be required to initiate
                 or conduct any litigation or collection
                 proceedings hereunder; and  shall not be
                 responsible for any action taken or
                 omitted to be taken by it hereunder or
                 under any other agreement, document or
                 instrument referred to or provided for
                 herein or in connection herewith, except
                 for its own gross negligence or willful
                 misconduct.  The Agent may employ agents
                 and attorneys-in-fact and shall not be
                 responsible for the negligence or
                 misconduct of any such agents or
                 attorneys-in-fact selected by it in good
                 faith.  The Agent may deem and treat the
                 payee of any Note as the holder thereof
                 for all purposes hereof unless and until
                 a written notice of the assignment or
                 transfer.

            b.          Reliance by Agent.  The Agent
                 shall be entitled to rely upon any
                 certification, notice or other
                 communication (including any thereof by
                 telephone, telex, facsimile, telegram or
                 cable) believed by it to be genuine and
                 correct and to have been signed or sent
                 by or on behalf of the proper Person or
                 Persons, and upon advice and statements
                 of legal counsel, independent accountants
                 and other experts selected by the Agent. 
                 As to any matters not expressly provided
                 for by this Agreement, the Agent shall in
                 all cases be fully protected in acting,
                 or in refraining from acting, hereunder
                 in accordance with instructions signed by
                 the Majority Banks, and such instructions
                 of the Majority Banks and any action
                 taken or failure to act pursuant thereto
                 shall be binding on all of the Banks.

            c.          Defaults.  The Agent shall not
                 be deemed to have knowledge or notice of
                 the occurrence of a Default or Event of
                 Default (other than the non-payment of
                 principal of or interest on Loans) unless
                 the Agent has received notice from a Bank
                 or the Borrower specifying such Default
                 or Event of Default and stating that such
                 notice is a "Notice of Default".  In the
                 event that the Agent receives such a
                 notice of the occurrence of a Default or
                 Event of Default, the Agent shall give
                 prompt notice thereof to the Banks (and
                 shall give each Bank prompt notice of
                 each such non-payment).  The Agent shall
                 (subject to Section 12.7 hereof) take
                 such action with respect to such Default
                 or Event of Default as shall be directed
                 by the Majority Banks, provided that,
                 unless and until the Agent shall have
                 received such directions, the Agent may
                 (but shall not be obligated to) take such
                 action, or refrain from taking such
                 action, with respect to such Default or
                 Event of Default as it shall deem
                 advisable in the best interest of the
                 Banks.

            d.          Rights as a Bank.  With
                 respect to its Loan Percentage and the
                 Loans made by it, Creditanstalt (and any
                 successor acting as Agent) in its
                 capacity as a Bank hereunder shall have
                 the same rights and powers hereunder as
                 any other Bank and may exercise the same
                 as though it were not acting as the
                 Agent, and the term "Bank" or "Banks"
                 shall, unless the context otherwise
                 indicates, include the Agent in its
                 individual capacity.  Creditanstalt (and
                 any successor acting as Agent) and its
                 Affiliates may (without having to account
                 therefor to any Bank) accept deposits
                 from, lend money to and generally engage
                 in any kind of banking, trust or other
                 business with Borrower (and any of its
                 Affiliates) as if it were not acting as
                 the Agent, and Creditanstalt and its
                 Affiliates may accept fees and other
                 consideration from Borrower for services
                 in connection with this Agreement or
                 otherwise without having to account for
                 the same to the Banks.

            e.          Indemnification.  The Banks
                 agree to indemnify the Agent (to the
                 extent not reimbursed under Sections 13.6
                 or 13.14 hereof, but without limiting the
                 obligations of Borrower under said
                 Sections 13.6 and 13.14), for their Loan
                 Percentage of any and all liabilities,
                 obligations, losses, damages, penalties,
                 actions, judgments, suits, costs,
                 expenses or disbursements of any kind and
                 nature whatsoever which may be imposed
                 on, incurred by or asserted against the
                 Agent in any way relating to or arising
                 out of this Agreement or any other
                 instruments, documents or agreements
                 contemplated by or referred to herein or
                 the transactions contemplated hereby
                 (including, without limitation, the costs
                 and expenses which Borrower is obligated
                 to pay under Section 13.6 hereof but
                 excluding, unless an Event of Default has
                 occurred and is continuing, normal
                 administrative costs expenses incident to
                 the performance of its agency duties
                 hereunder) or the enforcement of any of
                 the terms hereof or of any such other
                 instruments, documents or agreements,
                 provided that no Bank shall be liable for
                 any of the foregoing to the extent they
                 arise from the gross negligence or
                 willful misconduct of the party to be
                 indemnified.

            f.          Non-Reliance on Agent and
                 other Banks.  Each Bank agrees that it
                 has, independently and without reliance
                 on the Agent or any other Bank, and based
                 on such documents and information as it
                 has deemed appropriate, made its own
                 credit analysis of the Borrower and its
                 own decision to enter into this Agreement
                 and that it will, independently and
                 without reliance upon the Agent or any
                 other Bank, and based on such documents
                 and information as it shall deem
                 appropriate at the time, continue to make
                 its own analysis and decisions in taking
                 or not taking action under this
                 Agreement.  The Agent shall not be
                 required to keep itself informed as to
                 the performance or observance by the
                 Borrower of this Agreement or any other
                 instrument, document or agreement
                 referred to or provided for herein or to
                 inspect the properties or books of the
                 Borrower.  Except for notice, reports and
                 other documents and information expressly
                 required to be furnished to the Banks by
                 the Agent hereunder, the Agent shall not
                 have any duty or responsibility to
                 provide any Bank with any credit or other
                 information concerning the affairs,
                 financial condition or business of the
                 Borrower (or any of its Affiliates) which
                 may come into the possession of the Agent
                 or any of its Affiliates.

            g.          Failure to Act.  Except for
                 action expressly required of the Agent
                 hereunder, the Agent shall in all cases
                 be fully justified in failing or refusing
                 to act hereunder unless it shall receive
                 further assurances to its satisfaction
                 from the Banks of their indemnification
                 obligations under Section 12.5 hereof
                 against any and all liability and expense
                 which may be incurred by it by reason of
                 taking or continuing to take any such
                 action.

            h.          Resignation or Removal of
                 Agent; Co-Agent.  

          i.            Subject to the appointment and acceptance
                 of a successor Agent as provided below, the Agent
                 may resign at any time by giving notice thereof to
                 the Banks and the Borrower and the Agent may be
                 removed at any time with cause by the Majority
                 Banks.  Upon any such resignation or removal, the
                 Majority Banks shall have the right to appoint a
                 successor Agent.  If no successor Agent shall have
                 been so appointed by the Majority Banks and shall
                 have accepted such appointment with 30 days after
                 the retiring Agent's giving of notice of
                 resignation or the Majority Bank's removal of the
                 retiring Agent, the retiring Agent may, on behalf
                 of the Banks, appoint a successor Agent, which
                 shall be a bank which has a combined capital and
                 surplus of at least Five Hundred Million Dollars
                 ($500,000,000).  Upon the acceptance of any
                 appointment as Agent, such successor Agent shall
                 thereupon succeed to and become vested with all
                 the rights, powers, privileges and duties of the
                 retiring Agent, and the retiring Agent shall be
                 discharged from its duties and obligations
                 hereunder.  After any retiring Agent's resignation
                 or removal hereunder as Agent, the provisions of
                 this Section 12 shall continue in effect for its
                 benefit in respect of any actions taken or omitted
                 to be taken by it while it was acting as the
                 Agent.

          ii.           In the event that applicable law imposes
                 any restrictions on the identity of an agent such
                 as the Agent or requires the appointment of any
                 co-agent in connection therewith, the Agent may,
                 in its discretion, for the purpose of complying
                 with such restrictions, appoint one or more co-agents 
                 hereunder.  Any such Co-Agent(s) shall have
                 the same rights, powers, privileges and
                 obligations as the Agent and shall be subject to
                 and entitled to the benefits of all provisions of
                 this Agreement and the Loan Documents relative to
                 the Agent.  In addition to any rights of the
                 Majority Banks set forth in subsection (a) above,
                 any such Co-Agent may be removed at any time by
                 the Agent.


13.     MISCELLANEOUS

            a.          Intellectual Property License. 
                 Agent is hereby granted a non-exclusive,
                 assignable license or other right to use,
                 without charge, Borrower's copyrights,
                 patents, patent applications, designs,
                 rights of use, or any property of a
                 similar nature, whether owned by Borrower
                 or with respect to which Borrower has
                 rights under license, sublicense or other
                 agreements (collectively, the
                 "Intellectual Property Rights"), to the
                 extent such Intellectual Property Rights
                 are necessary for the proper operation
                 of, or are used by Borrower in the
                 operation of, the Collateral or the
                 Mortgaged Property.  Such license  may
                 only be used in connection with the
                 operation of the Collateral and the
                 Mortgaged Property,  shall terminate upon
                 the payment in full of the Obligations at
                 any time when there does not exist an
                 Event of Default, and  shall become
                 perpetual (and shall survive the
                 termination of this Agreement) upon the
                 transfer of any of the Collateral or the
                 Mortgaged Property in foreclosure of the
                 Agent's Liens in such Collateral or
                 Mortgaged Property, whether such
                 foreclosure is by right of private sale,
                 judicial sale, deed in lieu, retention in
                 satisfaction of the Obligations or
                 otherwise.  Borrower agrees, at the
                 request of the Agent or the Majority
                 Banks, to take any and all actions and to
                 execute, deliver and/or record any and
                 all instruments, documents, licenses or
                 agreements, as may be necessary or
                 appropriate to confirm the foregoing
                 license and/or evidence such license in
                 any public record.

            b.          Waiver.  Each and every right
                 and remedy granted to the Agent and the
                 Banks under this Agreement, or any other
                 document delivered hereunder or in
                 connection herewith or allowed  it by law
                 or in equity, shall be cumulative and may
                 be exercised from time to time.  No
                 failure on the part of the Agent or any
                 Bank to exercise, and no delay in
                 exercising, any right or remedy shall
                 operate as a waiver thereof, nor shall
                 any single or partial exercise by the
                 Agent or any Bank of any right or remedy
                 preclude any other or future exercise
                 thereof or the exercise of any other
                 right or remedy.  No waiver by the Agent
                 or the Banks of any Default or Event of
                 Default shall constitute a waiver of any
                 subsequent Default or Event of Default.

            c.          Survival.  All
                 representations, warranties and covenants
                 made herein shall survive the execution
                 and delivery of all of the Loan
                 Documents.  The terms and provisions of
                 this Agreement shall continue in full
                 force and effect until all of the
                 Obligations have been indefeasibly paid
                 in full; provided, further, that
                 Borrower's obligations under Sections
                 3.6, 3.7, 13.6 and 13.14 shall survive
                 the termination of this Agreement.

            d.          Assignments; Successors and
                 Assigns.  

          i.            This Agreement is a continuing obligation
                 and binds, and the benefits hereof shall inure to,
                 Borrower, Agent and each Bank and their respective
                 successors and assigns provided, that Borrower may
                 not transfer or assign any or all of its rights or
                 obligations hereunder without the prior written
                 consent of all of the Banks.

          ii.           Any Bank may, in the ordinary course of
                 its commercial banking business and in accordance
                 with the applicable law, at any time sell to one
                 or more banks or other entities ("Participants")
                 participating interests in any Loans owing to such
                 Bank, any of the Notes held by such Bank, or any
                 other interests of such Bank hereunder.  Borrower
                 agrees that each Participant shall be entitled to
                 the benefits of Section 3.7 and 13.14 with respect
                 to its participation; provided that no Participant
                 shall be entitled to receive any greater amount
                 pursuant to such Section than such Bank would have
                 been entitled to receive in respect of the amount
                 of the participation transferred by such Bank to
                 such Participant had no such transfer occurred.

          iii.          Each Bank may, in the ordinary
                 course of its commercial banking business
                 and in accordance with applicable law, at
                 any time assign, pursuant to an
                 assignment substantially in the form of
                 Exhibit F attached hereto and
                 incorporated herein by reference, without
                 the Borrower's consent, to one or more
                 banks having unimpaired capital and
                 surplus of $250,000,000 or more or may
                 assign with the Borrower's consent (which
                 shall not be unreasonably withheld) to
                 any other entities (in either case,
                 "Assignees") all or any part of any Loans
                 owing to such Bank, any of the Notes held
                 by such Bank, or any other interest of
                 such Bank hereunder; provided, however,
                 that any such assignment shall be in a
                 minimum principal amount of Two Million
                 Dollars ($2,000,000).  Borrower and the
                 Banks agree that to the extent of any
                 assignment the Assignee shall be deemed
                 to have the same rights and benefits with
                 respect to Borrower under this Agreement
                 and any of the Notes as it would have had
                 if it were a Bank hereunder on the date
                 hereof and the assigning Bank shall be
                 released from its obligations hereunder,
                 to the extent of such assignment.

          iv.           Borrower authorizes each Bank to disclose
                 to any Participant or Assignee ("Transferee") and
                 any prospective Transferee any and all financial
                 information in such Bank's possession concerning
                 Borrower which has been delivered to such Bank by
                 Borrower pursuant to this Agreement or which has
                 been delivered to such Bank by Borrower in
                 connection with such Bank's credit evaluation of
                 Borrower prior to entering into this Agreement.

          v.            Any Bank shall be entitled to have any
                 Note held by it subdivided in connection with a
                 permitted assignment of all or any portion of such
                 Note and the respective Loans evidenced thereby
                 pursuant to Section 13.4(c) above.  In the case of
                 any such subdivision, the new Note (the "New
                 Note") issued in exchange for a Note (the "Old
                 Note") previously issued hereunder  shall be
                 substantially in the form of Exhibit B hereto, 
                 shall be dated the date of such assignment,  shall
                 be otherwise duly completed and  shall bear a
                 legend, to the effect that such New Note is issued
                 in exchange for such Old Note and that the
                 indebtedness represented by such Old Note shall
                 not have been extinguished by reason of such
                 exchange.  Without limiting the obligations of
                 Borrower under Section 13.6 hereof, the Banks
                 shall use reasonable best efforts to ensure that
                 any such assignment does not result in the
                 imposition of any intangibles, documentary stamp
                 and other taxes, if any, which may be payable in
                 connection with the execution and delivery of any
                 such New Note.

          vi.           If, pursuant to this subsection, any
                 interest in this Agreement or any of the Notes is
                 transferred to any Transferee which is organized
                 under the laws of any jurisdiction other than the
                 United States or any State thereof, the Bank
                 making such transfer shall cause such Transferee,
                 concurrently with the effectiveness of such
                 transfer, (i) to represent to such Bank (for the
                 benefit of such Bank and Borrower) that under
                 applicable law and treaties no taxes will be
                 required to be withheld by such Bank or Borrower
                 with respect to any payments to be made to such
                 Transferee hereunder or in respect of the Loans,
                 (ii) to furnish to such Bank and Borrower either
                 U.S. Internal Revenue Service Form 4224 or U.S.
                 Internal Revenue Service Form 1001 (wherein such
                 Transferee claims entitlement to complete
                 exemption from U.S. federal withholding tax on all
                 payments hereunder) and (iii) to agree (for the
                 benefit of such Bank and Borrower) to provide such
                 Bank and Borrower a new Form 4224 or Form 1001
                 upon the obsolescence of any previously delivered
                 form and comparable statements in accordance with
                 applicable U.S. laws and regulations and
                 amendments duly executed and completed by such
                 Transferee, and to comply from time to time with
                 all applicable U.S. laws and regulations with
                 regard to such withholding tax exemption.

            e.          Counterparts.  This Agreement
                 may be executed in two or more
                 counterparts, each of which when fully
                 executed shall be an original, and all of
                 said counterparts taken together shall be
                 deemed to constitute one and the same
                 agreement.  Any signature page to this
                 Agreement may be witnessed by a telecopy
                 or other facsimile of any original
                 signature page and any signature page of
                 any counterpart hereof may be appended to
                 any other counterpart hereof to form a
                 completely executed counterpart hereof.

            f.          Expense Reimbursement. 
                 Borrower agrees to reimburse the Agent
                 for all of the Agent's expenses incurred
                 in connection with the development,
                 preparation, execution, delivery,
                 modification, regular review and
                 administration of this Agreement, the
                 Notes and the other Loan Documents,
                 including audit costs, appraisal costs,
                 the cost of searches, filings and filing
                 fees, taxes and the fees and
                 disbursements of Agent's attorneys,
                 Messrs. Troutman Sanders, and any counsel
                 retained by them, and all costs and
                 expenses incurred by the Agent and the
                 Banks (including attorney's fees and
                 disbursements) to:  (i) commence, defend
                 or intervene in any court proceeding;
                 (ii) file a petition, complaint,  answer,
                 motion or other pleading, or to take any
                 other action in or with respect to any
                 suit or proceeding (bankruptcy or
                 otherwise) relating to the Collateral,
                 the Mortgaged Property or this Agreement,
                 the Deed of Trust, the Second Deed of
                 Trust, the Third Deed of Trust, the Notes
                 or any of the other Loan Documents;
                 (iii) protect, collect, lease, sell, take
                 possession of, or liquidate any of the
                 Collateral or the Mortgaged Property;
                 (iv) attempt to enforce any Lien in any
                 of the Collateral or the Mortgaged
                 Property or to seek any advice with
                 respect to such enforcement; and
                 (v) enforce any of the Agent's and the
                 Banks' rights to collect any of the
                 Obligations.  Borrower also agrees to
                 pay, and to save harmless the Agent and
                 the Banks from any delay in paying, any
                 intangibles, mortgage, documentary stamp
                 and other taxes, if any, which may be
                 payable in connection with the execution
                 and delivery of this Agreement, the Notes
                 or any of the other Loan Documents, or
                 the recording of any thereof, or in any
                 modification hereof or thereof. 
                 Additionally, Borrower shall pay to the
                 Agent and each Bank on demand any and all
                 fees, costs and expenses which the Agent
                 or such Bank pays to a bank or other
                 similar institution arising out of or in
                 connection with (a) the forwarding to
                 Borrower or any other Person on
                 Borrower's behalf, by the Agent or such
                 Bank of proceeds of any Loan and (b) the
                 depositing for collection by of any check
                 or item of payment received by or
                 delivered to the Agent or such Bank on
                 account of the Obligations.  Borrower's
                 obligations under this Section shall
                 survive the termination of this Agreement
                 and the repayment of the Obligations.

            g.          Severability.  If any
                 provision of this Agreement or any of the
                 Loan Documents or the application thereof
                 to any party thereto or circumstances
                 shall be invalid or unenforceable to any
                 extent, the remainder of this Agreement
                 or such Loan Documents and the
                 application of such provisions to any
                 other party thereto or circumstance shall
                 not be affected thereby and shall be
                 enforced to the greatest extent permitted
                 by law.

            h.          Notices.  All notices,
                 requests, demands and other
                 communications under this Agreement shall
                 be in writing and shall be deemed to have
                 been given or made when (a) delivered by
                 hand, (b) sent by telex or telecopier
                 (with receipt confirmed), provided that a
                 copy is mailed by certified mail, return
                 receipt requested, or (c) except as
                 otherwise provided herein, deposited in
                 the mail, registered or certified mail,
                 postage prepaid, addressed to such party
                 at the "Address for Notices" specified
                 below its name on the signature pages
                 hereto or to such other address as may be
                 designated hereafter in writing by the
                 respective parties hereto.

            i.          Entire Agreement - Amendment. 
                 This Agreement and the Loan Documents
                 constitute the entire agreement between
                 the parties hereto with respect to the
                 subject matter hereof and supersede all
                 prior negotiations, understandings and
                 agreements between such parties in
                 respect of such subject matter,
                 including, without limitation, as set
                 forth in that certain proposal letter
                 dated June 9, 1995 from Creditanstalt to
                 Borrower, accepted by Borrower June 13,
                 1995.  Neither this Agreement nor any
                 provision hereof may be changed, waived,
                 discharged, modified or terminated except
                 pursuant to a written instrument signed
                 by Borrower, the Agent and the Majority
                 Banks or by the Borrower and the Agent
                 acting with the consent of the Majority
                 Banks; provided, however, that no such
                 amendment, waiver, discharge,
                 modification or termination shall, except
                 pursuant to an instrument signed by
                 Borrower, the Agent and all of the Banks
                 or by the Borrower and the Agent acting
                 with the consent of all of the Banks,
                  extend the date fixed for the payment of
                 principal of, or interest on, any Loan;
                  reduce the amount of any payment of
                 principal of, or the rate of interest on,
                 any Loan (except for changes in interest
                 rates pursuant to Section 3.1(b) hereof); 
                 reduce any fee payable hereunder;  alter
                 the terms of this Section 13.9;  release
                 any collateral securing the Loans, or any
                 portion thereof;  change the Loan
                 Percentage of any Bank; or  amend the
                 definitions of the term "Majority Banks"
                 set forth in Section 1.1 hereof;
                 provided, further, that any amendment,
                 waiver, discharge modification or
                 termination of any provision of
                 Section 12 hereof, or which increases the
                 obligations of the Agent hereunder, shall
                 require the written consent of the Agent.

            j.          Time of the Essence.  Time is
                 of the essence in this Agreement and the
                 other Loan Documents.

            k.          Interpretation.  No provision
                 of this Agreement shall be construed
                 against or interpreted to the
                 disadvantage of any party hereto by any
                 court or other governmental or judicial
                 authority by reason of such party having
                 or being deemed to have structured or
                 dictated such provision.

            l.          Banks Not a Joint Venturer. 
                 Neither this Agreement nor any
                 agreements, instruments, documents or
                 transactions contemplated hereby
                 (including the Loan Documents) shall in
                 any respect be interpreted, deemed or
                 construed as making the Agent or the
                 Banks a partner or joint venturer with
                 Borrower or as creating any similar
                 relationship or entity, and Borrower
                 agrees that it will not make any
                 assertion, contention, claim or
                 counterclaim to the contrary in any
                 action, suit or other legal proceeding
                 involving the Agent or the Banks and
                 Borrower.

            m.          Cure of Defaults by Banks. 
                 If, hereafter, Borrower defaults in the
                 performance of any duty or obligation to
                 the Agent and the Banks hereunder, the
                 Agent or any Bank may, at its option, but
                 without obligation, cure such default and
                 any costs, fees and expenses incurred by
                 the Agent or such Bank in connection
                 therewith including, without limitation,
                 for payment on mortgage or note
                 obligations, for the purchase of
                 insurance, the payment of taxes and the
                 removal or settlement of Liens and
                 claims, shall be included in the
                 Obligations and be secured by the
                 Collateral and the Mortgaged Property.

            n.          Indemnity.  In addition to any
                 other indemnity provided for herein, or
                 in the other Loan Documents, Borrower
                 hereby indemnifies the Agent and each
                 Bank from and against any and all
                 liabilities, obligations, losses,
                 damages, penalties, actions, judgments,
                 suits, costs, expenses or disbursements
                 of any kind or nature whatsoever
                 (including, without limitation, fees and
                 disbursements of counsel) which may be
                 imposed on, incurred by, or asserted
                 against the Agent or such Bank in any
                 litigation, proceeding or investigation
                 instituted or conducted by any
                 governmental agency or instrumentality or
                 any other Person (other than Borrower)
                 with respect to any aspect of, or any
                 transaction contemplated by, or referred
                 to in, or any matter related to, this
                 Agreement or the other Loan Documents, or
                 the other transactions contemplated
                 hereby, whether or not Agent or such Bank
                 is a party thereto, except to the extent
                 that any of the foregoing arises out of
                 gross negligence or willful misconduct of
                 Agent or such Bank, as the case may be. 
                 Borrower's obligations under this Section
                 shall survive the termination of this
                 Agreement and the repayment of the
                 Obligations.

            o.          Attorney-in-Fact.  Borrower
                 hereby designates, appoints and empowers
                 Agent irrevocably as its
                 attorney-in-fact, at Borrower's cost and
                 expense, to do in the name of Borrower
                 any and all actions which Agent may deem
                 necessary or advisable to carry out the
                 terms hereof upon the failure, refusal or
                 inability of Borrower to do so, and
                 Borrower hereby agrees to indemnify and
                 hold Agent harmless from any costs,
                 damages, expenses or liabilities arising
                 against or incurred by the Agent in
                 connection therewith except to the extent
                 that any of such costs, damages, expenses
                 or liabilities arise out of Agent's gross
                 negligence or willful misconduct.

            p.          Sole Benefit.  The rights and
                 benefits set forth in this Agreement and
                 in the other Loan Documents are for the
                 sole and exclusive benefit of the parties
                 thereto and may be relied upon only by
                 them.

            q.          Termination Statements. 
                 Borrower acknowledges and agrees that it
                 is Borrower's intent that all financing
                 statements filed hereunder shall remain
                 in full force and effect until this
                 Agreement shall have been terminated in
                 accordance with the provisions hereof,
                 even if, at any time or times prior to
                 such termination, no loans or Loans shall
                 be outstanding hereunder.  Accordingly,
                 Borrower waives any right which it may
                 have under Section 9-404(1) of the UCC to
                 demand the filing of termination
                 statements with respect to the
                 Collateral, and agrees that the Agent
                 shall not be required to send such
                 termination statements to Borrower, or to
                 file them with any filing office, unless
                 and until this Agreement shall have been
                 terminated in accordance with its terms
                 and all Obligations paid in full in
                 immediately available funds.  Upon such
                 termination and payment in full, Agent
                 shall execute appropriate termination
                 statements and deliver the same to
                 Borrower.

            r.          Governing Law; Jurisdiction. 
                 THIS AGREEMENT AND THE OTHER LOAN
                 DOCUMENTS, AND THE RIGHTS AND OBLIGATIONS
                 OF THE PARTIES HEREUNDER AND THEREUNDER,
                 SHALL BE GOVERNED BY, AND CONSTRUED IN
                 ACCORDANCE WITH, THE LAWS OF THE STATE OF
                 NEW YORK (WITHOUT REGARD TO PRINCIPLES OF
                 CONFLICTS OF LAW).  BORROWER HEREBY (A)
                 SUBMITS TO THE NONEXCLUSIVE JURISDICTION
                 OF THE UNITED STATES DISTRICT COURT FOR
                 THE SOUTHERN DISTRICT OF NEW YORK AND OF
                 ANY NEW YORK STATE COURT SITTING IN NEW
                 YORK CITY FOR THE PURPOSES OF ALL LEGAL
                 PROCEEDINGS ARISING OUT OF OR RELATING TO
                 THIS AGREEMENT AND (B) IRREVOCABLY
                 WAIVES, TO THE FULLEST EXTENT PERMITTED
                 BY LAW, ANY OBJECTION WHICH IT MAY NOW OR
                 HEREAFTER HAVE TO THE LAYING OF THE VENUE
                 OF ANY SUCH PROCEEDING BROUGHT IN SUCH A
                 COURT OR ANY CLAIM THAT ANY SUCH
                 PROCEEDING BROUGHT IN SUCH A COURT HAS
                 BEEN BROUGHT IN AN INCONVENIENT FORUM. 
                 NOTWITHSTANDING ANYTHING HEREIN TO THE
                 CONTRARY, NOTHING HEREIN SHALL LIMIT THE
                 RIGHT OF THE AGENT OR THE BANKS TO BRING
                 PROCEEDINGS AGAINST BORROWER IN THE
                 COURTS OF ANY OTHER JURISDICTION.

            s.          Waiver of Jury Trial. 
                 BORROWER, AGENT AND EACH BANK EACH HEREBY
                 KNOWINGLY, INTELLIGENTLY AND
                 INTENTIONALLY WAIVES, TO THE FULLEST
                 EXTENT PERMITTED BY APPLICABLE LAW, ANY
                 AND ALL RIGHTS IT MAY HAVE TO A TRIAL BY
                 JURY IN RESPECT OF ANY LEGAL PROCEEDING
                 BASED ON OR ARISING OUT OF, UNDER, IN
                 CONNECTION WITH,  OR RELATING TO THIS
                 AGREEMENT, ANY OF THE NOTES, ANY OF THE
                 OTHER LOAN DOCUMENTS, THE TRANSACTIONS
                 CONTEMPLATED HEREBY, OR ANY COURSE OF
                 CONDUCT, COURSE OF DEALING, STATEMENTS
                 (WHETHER ORAL OR WRITTEN), OR ACTIONS OF
                 BORROWER, AGENT OR ANY BANK.  THIS
                 PROVISION IS A MATERIAL INDUCEMENT FOR
                 THE BANKS MAKING THE LOANS TO BORROWER.  

       IN WITNESS WHEREOF, each of Borrower, the Agent and the
Banks has set its hand and seal as of the day and year first above
written.

                "BORROWER"

                PILGRIM'S PRIDE CORPORATION


                By:  Lonnie Bo Pilgrim

                Chief Executive Office


                Attest: Clifford E. Butler

                Chief Financial Officer

                [CORPORATE SEAL]

                Address for Notices:

                Pilgrim's Pride Corporation
                110 South Texas
                P.O. Box 93
                Pittsburg, Texas  75686
                Attn:  Mr. Clifford E. Butler
                Telecopy Number: (903) 856-7505 

                with a copy to:

                Godwin & Carlton
                901 Main Street
                Dallas, Texas  75202
                Attn: James R. Vetter, Esq.
                Telecopy Number: (214) 760-7332 

                "AGENT"

                CREDITANSTALT-BANKVEREIN 



                By:Robert M. Biringer  
                Senior Vice President


                By:Daniel D. Lensgras
                Senior Associate

                Address for Notices:
                Creditanstalt-Bankverein
                245 Park Avenue
                New York, New York  10167
                Attn:  Dennis O'Dowd
                Telecopy Number: (212) 851-1234

                with copies to:

                Creditanstalt-Bankverein
                Two Ravinia Drive
                Suite 1680
                Atlanta, Georgia  30346
                Attn: Robert M. Biringer/Joseph P. Longosz
                Telecopy Number: (404) 390-1851

                and

                Troutman Sanders
                NationsBank Plaza, Suite 5200
                600 Peachtree Street, N.E.
                Atlanta, Georgia  30308-2216
                Attn:  Hazen H. Dempster, Esq.
                Telecopy Number: (404) 885-3900








Loan Percentage
                "BANKS"
   100%
                CREDITANSTALT-BANKVEREIN 



                By:  Robert M. Biringer
                Senior Vice President


                By:  Daniel D. Lensgras
                       Senior Associate

                Address for Notices:
                Creditanstalt-Bankverein
                245 Park Avenue
                New York, New York  10167
                Attn:  Dennis O'Dowd
                Telecopy Number: (212) 851-1234

                with copies to:

                Creditanstalt-Bankverein
                Two Ravinia Drive
                Suite 1680
                Atlanta, Georgia  30346
                Attn: Robert M. Biringer/Joseph P. Longosz
                Telecopy Number: (404) 390-1851

                and

                Troutman Sanders
                NationsBank Plaza, Suite 5200
                600 Peachtree Street, N.E.
                Atlanta, Georgia  30308-2216
                Attn:  Hazen H. Dempster, Esq.
                Telecopy Number: (404) 885-3900





REVOLVING CREDIT LOAN AGREEMENT



Agricultural Production Credit Association ("Lender")

Pilgrim's Pride Corporation ("Borrower")

March 27, 1995

TABLE OF SCHEDULES

     Schedule 1.01  Description of Land included in Collateral

     Schedule 5.06  Litigation and Related Proceedings

     Schedule 5.18  ERISA Matters

     Schedule 5.20  Corporate and Trade or Fictitious Names

     Schedule 5.22  Investments

     Schedule 5.27  Executive Offices, Business and Collateral
Locations

     Schedule 5.29  Hazardous Substances and Underground Storage
Tanks

     Schedule 6.08  February 1, 1995 Proxy Statement of Borrower

REVOLVING CREDIT LOAN AGREEMENT

     This Revolving Credit Loan Agreement is dated as of the 27th
day of March, 1995, between Agricultural Production Credit
Association, a federally chartered production credit association,
organized and operating under the Farm Credit Act of 1971, as amended,
with its principal place of business at 3210 W.N.W. Loop 323, Tyler,
Texas (hereinafter referred to as "Lender"), and Pilgrim's Pride
Corporation, a Delaware corporation authorized to do business in the
state of Texas, with its principal place of business at 110 S. Texas,
Pittsburg, Texas (hereinafter referred to as "Borrower").


RECITALS

     WHEREAS, Borrower has requested
 that Lender provide Borrower
with a revolving credit facility and Lender is willing to provide such
a facility to Borrower upon the terms and subject to the conditions
hereinafter set forth;

     NOW, THEREFORE, in consideration of the premises and the
mutual covenants and agreements set forth herein, the parties agree as
follows:


ARTICLE I. DEFINITIONS, TERMS AND REFERENCES

     1.01.     Certain Definitions.     When used in this Agreement,
the following terms shall have the following meanings:

     "Accrued Interest in Principal" shall mean accrued interest
that is added to the principal balance of the Note under Section
2.11(a) hereof.

     "Act" means the Farm Credit Act of 1971, and all regulations
issued thereunder, as such act and regulations now exist or are
hereafter amended, supplemented, or superseded by act of Congress, the
FCA, or otherwise.

     "Advance" shall mean each sum advanced to Borrower under the
terms of this Agreement and constituting a portion of the
"Obligations".

     "Advance Conditional Payment Account" shall mean any account
at Lender into which Borrower may make voluntary advance conditional
payments intended to be applied to any amount due on the Obligations
pursuant to 12 U.S.C. 2219(b) and 12 C.F.R. 614.4513, or any other
provisions of the Act.

      "Affiliate" shall mean, as to any Person, any other Person
which, directly or indirectly, owns or controls, on an aggregate
basis, including all beneficial ownership and ownership or control as
trustee, guardian or other fiduciary, at least ten percent (10%) of
the outstanding shares of capital stock having ordinary voting power
to elect a majority of the board of directors (irrespective of
whether, at the time, stock of any other class or classes of such
corporation shall have or might have voting power by reason of the
happening of any contingency) of such Person; or which controls, is
controlled by or is under common control with such Person.  For the
purposes of this definition, "control" means the possession, directly
or indirectly, of the power to direct or cause the direction of
management and policies, whether through the ownership of voting
securities, by contract or otherwise.

     "Agreement" shall mean this Revolving Credit Loan Agreement,
either as originally executed or as it may be amended from time to
time.

     "Borrower" shall mean Pilgrim's Pride Corporation, a Delaware
corporation, with its principal place of business at 110 S. Texas,
Pittsburg, Texas.

     "Business Day" shall mean any day on which Lender is open for
the transaction of business.

     "Capital Expenditures" shall mean any expenditure by a Person
for an asset which will be used in a year or years subsequent to the
year in which the expenditure is made and which asset is properly
classifiable, in accordance with Borrower's capitalization policies,
in relevant financial statements of such Person as equipment, real
property or improvements, fixed assets, or a similar type of
capitalized asset in accordance with GAAP.

     "Capital Lease" shall mean, as to any Person, any lease of (or
other agreement conveying the right to use) real and/or personal
property which is required to be classified and accounted for as a
capital lease on a balance sheet of such Person under GAAP (including
Statement of Financial Accounting Standards No. 13 of the Financial
Accounting Standards Board).

     "Closing Date" shall mean the date this Agreement has been
signed by Borrower and Lender.

     "Collateral" shall mean all property described or referred to
in the Loan Documents as security for the Obligations including, but
not limited to, the real and personal property described in Section
3.02 of this Agreement (together with all additions, substitutions,
accessions to, replacements for and proceeds thereof, and all property
subsequently taken as collateral or security for the Obligations);

     "Commitment" shall mean the obligation of Lender to fund the
Line of Credit to Borrower, subject to the terms and conditions
hereof, in an aggregate principal amount not to exceed Thirty Million
Dollars ($30,000,000.00).

     "Creditanstalt" shall mean Creditanstalt-Bankverein, an
Austrian banking corporation acting through its New York (Federal)
Branch, and its successors and assigns.

     "Creditanstalt Agreement" shall mean that certain Loan and
Security Agreement dated as of June 3, 1993 between Borrower,
Creditanstalt and certain banks and providing a facility for term
loans to Borrower in the aggregate principal amount of $28,000,000.00,
as such agreement was amended by the Amended and Restated Loan and
Security Agreement dated July 29, 1994.

     "Current Assets" of any Person shall mean the aggregate amount
of assets of such Person which, in accordance with GAAP, may be
properly classified as current assets after deducting adequate
reserves where proper.

     "Current Liabilities" of any Person shall mean all items
(including taxes accrued as estimated) which in accordance with GAAP
may be properly classified as current liabilities of such Person,
including in any event all amounts outstanding from time to time under
this Agreement.

     "Current Ratio" shall mean the ratio of the consolidated
Current Assets of Borrower and its Subsidiaries to the consolidated
Current Liabilities of Borrower and its Subsidiaries.

     "Deed of Trust" shall mean all and singular the Deeds of
Trust, Assignments of Rents, Agreements and Mortgages executed by
Borrower and assigning or conveying the Collateral to secure the
repayment of the Obligations, and all amendments thereto.

     "Default Rate" shall mean with respect to the unpaid principal
portion of the Obligations, an interest rate per annum equal to three
percent (3.0%) above the Discount Rate.

     "Discount Rate" shall mean the "all-in cost" being the sum of
the quoted discount rate and the applicable concession charge
converted to the U.S. Government semi-annual bond equivalent yield, of
thirty (30) day Farm Credit discount notes rounded up to the nearest
multiple of five (5) basis points (0.05 percentage points), as quoted
by the Federal Farm Credit Banks' Funding Corporation, in its Daily
Interest Rate Summary (Bid Yields) Report issued to FCBT, on the
fifteenth (15th) day of each calendar month, or the next Business Day
thereafter.

     "Environmental Laws" shall mean any and all state, federal and
local statutes, regulations and ordinances relating to the protection
of human health or the environment including, without limitation, the
Resource Conservation and Recovery Act of 1976, 42 U.S.C. 6901 et
seq., the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, 42 U.S.C. 9601-9657, as amended by the
Superfund Amendments and Reauthorization Act of 1986, the Hazardous
Materials Transportation Act, 49 U.S.C. 6901 et seq., Federal Water
Pollution Control Act, 33 U.S.C. 1251 et seq., the Clean Air Act, 42
U.S.C. 741 et seq., the Clean Water Act, 33 U.S.C. 7401 et seq.,
the Toxic Substances Control Act, 15 U.S.C. 2601 et seq., the Safe
Drinking Water Act, 42 U.S.C. 300f-300j, the United States
Environmental Protection Agency's Rules concerning Underground Storage
Tanks, 52 Fed. Reg. 12661, the Texas Water Code, as amended, the Texas
Health and Safety Code, as amended, and any federal or state rules or
regulations which implement such legislation, and all similar federal,
state and local environmental statutes and ordinances and the
regulations, permits, licenses, registrations, orders and decrees now
or hereafter promulgated or issued thereunder.

     "Equipment" shall mean all of Borrower's equipment, as such
term is defined in Section 9.109 of the Texas Business and Commerce
Code, now or hereafter located on, affixed to, or based at the Land,
whether now owned or existing or hereafter acquired or manufactured
and whether or not subsequently removed from the Land, including all
equipment described in or covered by that certain Appraisal of
Pilgrim's Pride Integrated Broiler Facilities in Camp, Upshur and
Dallas Counties, Texas and Hempstead, Arkansas, dated as of January 3,
1995, prepared for Lender by Bob G. Derryberry, ARA and Bryan A.
Carrell, MAI, together with any and all accessories, accessions, parts
and appurtenances thereto, replacements thereof and substitutions
therefor.
     
     "ERISA" shall mean the Employee Retirement Income Security Act
of 1974, as amended from time-to-time, and all rules and regulations
from time-to-time promulgated thereunder.

     "ERISA Affiliate" shall mean each trade or business (whether
or not incorporated) which, together with Borrower, is treated as a
single employer under Section 4.14(b), (c), (m) or (o) of the Internal
Revenue Code.

     "Event of Default" shall mean the occurrence or happening of
any of the events set forth in Article IX hereof.

     "Expiration Date" shall mean the date the term of this
Agreement expires pursuant to Section 2.05 hereof, or otherwise.

     "FCA" shall mean the Farm Credit Administration, an indepen-
dent agency in the executive branch of the Federal government, as
established by the Act.

     "FCBT"  shall mean the Farm Credit Bank of Texas, a federally
chartered instrumentality of the United States, organized and existing
under the Act, with its principal place of business at 6210 Highway
290 E., Austin, Texas.

     "Fiscal Period" shall mean any one of the twelve (12) month
end accounting periods of the Borrower that make up a Fiscal Year.

     "Fiscal Quarter" shall mean any one of the four (4) quarter
end accounting periods of the Borrower that make up a Fiscal Year.

     "Fiscal Year" shall mean, for any year, the 52 or 53 week
period ending on the Saturday closest to September 30 of such year,
regardless of whether such Saturday occurs in September or October of
such year.

     "Fixed Charge Coverage Ratio" shall mean, for any period, the
ratio of (a) the sum of (i) net income before taxes for such period,
plus (ii) interest expense for such period, plus (iii) depreciation
and amortization for financial reporting purposes for such period,
plus (iv) the aggregate amount payable during such period under
Operating Leases to (b) the sum of (i) interest expense for such
period, plus (ii) scheduled principal payments for such period on all
Indebtedness for borrowed money which would, in accordance with GAAP
be classified as long-term debt , plus (iii) the aggregate amount
payable during such period under Operating Leases, in each case
calculated for Borrower and its Subsidiaries on a consolidated basis
in accordance with GAAP.

     "Funded Debt" shall mean, collectively, (a) the aggregate
principal amount of Indebtedness for borrowed money which would, in
accordance with GAAP, be classified as long-term debt, together with
the current maturities thereof; (b) all Indebtedness outstanding under
any revolving credit, line of credit, or similar agreement providing
for borrowings (and any extension or renewals thereof),
notwithstanding that any such Indebtedness is created within one year
of the expiration of such agreement; (c) the principal component or
obligations under any Capital Lease; and (d) any other Indebtedness
bearing interest or carrying a similar payment requirement (including
any Indebtedness issued at a discount to its face amount), calculated
in all cases for Borrower and its Subsidiaries on a consolidated basis
in accordance with GAAP.

     "GAAP" shall mean generally accepted accounting principles
consistently applied and maintained throughout the period indicated. 
Where applicable, generally accepted accounting principles which are
consistent with the prior financial practice of Borrower (as such
practice is reflected in the financial information referred to in
Section 5.04 hereof) shall apply.

     "Guarantor" shall mean Lonnie  "Bo" Pilgrim and Patty Redding
Pilgrim, jointly and severally.

     "Hazardous Substances" shall mean and include, without
limitation, asbestos and any substance containing asbestos, the group
of organic compounds known as polychlorinated biphenyls, flammable
explosives, radioactive materials, chemicals known to cause cancer or
reproductive toxicity, pollutants, effluents, contaminants, emissions
or related materials and also refers to materials that, because of
their quantity, concentration or physical, chemical or infectious
characteristics, may cause or pose a present or potential hazard to
human health or the environment when improperly used, treated, stored,
disposed of, generated, manufactured, transported or otherwise
handled.  "Hazardous Substance(s)" shall exclude odor and poultry or
animal waste, and shall include, but is not limited to, any and all
hazardous or toxic substances, materials or waste as defined by or
listed under any of the Environmental Laws and all petroleum,
petroleum by-products and all liquid or gaseous hydrocarbons.

     "Indebtedness" shall mean, as applied to any Person at any
time, (a) all indebtedness, obligations or other liabilities of such
Person (i) for borrowed money or evidenced by debt securities,
debentures, acceptances, notes or other similar instruments, and any
accrued interest, fees and charges relating thereto; (ii) under profit
payment agreements or similar agreements; (iii) with respect to
letters of credit issued for such Person's account; (iv) to pay the
deferred purchase price of property or services, except unsecured
accounts payable and accrued expenses arising in the ordinary course
of business; or (v) in respect of Capital Leases; (b) all
indebtedness, obligations or other liabilities of such Person or
others secured by a Lien on any property of such Person, whether or
not such indebtedness obligations or liabilities are assumed by such
Person, all as of such time; (c) all indebtedness, obligations or
other liabilities of such Person in respect of any foreign exchange
contract, interest rate protection agreement, interest rate future,
interest rate option, interest rate swap, interest rate cap or other
interest rate hedge arrangement, net of liabilities owed to such
Person by the counter-parties thereon; (d) all preferred stock subject
(upon the occurrence of any contingency or otherwise) to mandatory
redemption; (e) any Indebtedness of others guaranteed by such Person
or for which such Person is additionally liable or responsible.

     "Intangible Assets" shall mean license agreements, trademarks,
trade names, patents, capitalized research and development,
proprietary products (the result of past research and development
treated as long term assets and excluded from Inventory) and goodwill
(all determined on a consolidated basis in accordance with GAAP).

     "Land" shall mean the real estate or interest therein
described in Exhibit "1.01" attached hereto and incorporated herein by
this reference, all fixtures or other improvements situated thereon
and all rights, titles and interests appurtenant thereto.

     "Leases" shall mean any and all leases, subleases, licenses,
concessions or other agreements (written or oral, now or hereafter in
effect), whether an Operating Lease or a Capital Lease, together with
all security and other deposits made in connection therewith and all
other agreements, such as architect's contracts, engineer's contracts,
utilities contracts, maintenance agreements and service contracts,
which is any way relate to the design, use, occupancy, operation,
maintenance, enjoyment or ownership of all or any part of the
Collateral.

     "Leverage Ratio" shall mean, on any date, the ratio of (a)
Funded Debt, as of such Fiscal Period to (b) the sum of (i) Net Worth
as of such Fiscal Period and (ii) Funded Debt, as of such Fiscal
Period, in each case computed for the Borrower and its Subsidiaries on
a consolidated basis in accordance with GAAP.

     "Lien" means any mortgage, deed of trust, deed to secure debt,
pledge, hypothecation, assignment for security, security interest,
encumbrance, assignment of rents, lien or charge of any kind, whether
voluntarily incurred or arising by operation of law, by statute, by
contract, or otherwise, affecting any property, including any
agreement to grant any of the foregoing, any conditional sale or other
title retention agreement, any lease in the nature of a security
interest, and/or the filing of or agreement to give any financing
statement (other than a precautionary financing statement with respect
to a lease that is not in the nature of a security interest) under the
Texas Business and Commerce Code or comparable law of any jurisdiction
with respect to any property.

     "Line of Credit" shall mean the Thirty Million Dollar
($30,000,000.00) line of credit established hereunder pursuant to the
terms of this Agreement by Lender in favor of Borrower, pursuant to
which Borrower may obtain Advances pursuant to and subject to the
terms and conditions of this Agreement.  The Line of Credit is
evidenced, in part, by the Note.

     "Loan Documents" means those agreements, instruments and
documents evidencing the terms of the Obligations including, but not
limited to, the Note, this Loan Agreement, the Deed of Trust, guaranty
agreements, estoppel letters, opinions of Borrower's counsel, security
agreements, UCC-1 financing statements, mortgagee's policies of title
insurance, corporate resolutions and any other agreement or instrument
in writing evidencing the Obligations of Borrower or Guarantor to
Lender in connection with the Line of Credit, as those agreements are
thereafter amended, modified, renewed or extended from time-to-time.

     "Loan Limit" shall mean the limit of principal, and interest
included in principal, which is the maximum amount Borrower may borrow
from Lender under this Agreement as set forth in Section 2.02.
     
     "Market Value" shall mean with respect to an asset, the most
probable price which, in the good faith exercise of Lender's sole
discretion and judgement, such property should bring in a competitive
and open market under all conditions requisite to a fair sale, the
buyer and seller each acting prudently, knowledgeably and assuming the
price is not affected by undue stimulus.  Any determination of Market
Value made by Lender with respect to any item of Collateral must be
consistent with the Act and the collateral evaluation policies and
procedures of Lender.

     "Material Adverse Effect" shall mean any event or condition
which, alone or when taken with other events or conditions occurring
or existing concurrently therewith (a) has or is reasonably expected
to have a material adverse effect on the business, operations,
condition (financial or otherwise), assets, liabilities, properties or
prospects of Borrower or any of its Subsidiaries or of the industry in
which Borrower operates; (b) has or is reasonably expected to have any
material adverse effect whatsoever on the validity or enforceability
of this Agreement, the Deed of Trust or any other Loan Document; (c)
materially impairs or is reasonably expected to materially impair the
ability of Lender to enforce its rights and remedies under this
Agreement and the Loan Documents; or (e) has or is reasonably expected
to have any material adverse effect on the Collateral, the Liens of
Lender in the Collateral or the priority of such Liens.

     "Maturity Date" shall mean April 1, 2003, the final maturity
date of the Note.

     "MPPAA" shall mean the Multiemployer Pension Plan Amendments
Act of 1980, amending Title IV of ERISA.

     "Multiemployer Plan" shall have the same meaning as set forth
in Section 4001(A)(3) of ERISA.

     "Net Worth" shall mean the excess of the consolidated total
assets of Borrower and its Subsidiaries over the consolidated Total
Liabilities of Borrower and its Subsidiaries, excluding, however, from
the definition of assets, the amount of (a) any write-up in the book
value of any assets resulting from a revaluation thereof subsequent to
the later to occur of (i) the Closing Date and (ii) the date Borrower
(or its Subsidiary) acquired such asset; (b) treasury stock; (c)
receivables from Affiliates of Borrower; and (d) unamortized original
issue debt discount, all of which is to be determined in accordance
with GAAP.

     "Note" shall mean that certain revolving line of credit
promissory note executed by Borrower, dated as of the Closing Date, in
the original principal amount of Thirty Million Dollars
($30,000,000.00) and payable to the order of Lender, its successors or
assigns, as said promissory note may thereafter be amended, modified,
renewed or extended from time-to-time.

     "Obligations" shall mean any and all Indebtedness owed to
Lender under the terms of the Note, together with all obligations and
liabilities owed by Borrower to Lender under this Agreement and any
other Loan Document, including without limitation, all interest,
charges, fees, attorneys' fees, expenses, costs and any other sum
chargeable by Lender to Borrower under this or any other Agreement. 
Lender's records shall be prima facie evidence of the Obligations due
and owing under this Agreement.

     "Operating Leases" shall mean all Leases of (or other
agreements, conveying the right to use) real and/or personal property
(other than short term leases which are cancelable at any time by the
lessee) which are not required to be classified and accounted for as a
Capital Lease on a balance sheet under GAAP (including Statements of
Financial Accounting Standards No. 13 of the Financial Accounting
Standards Board).  "Operating Lease" shall mean any one of the
Operating Leases.

     "Participant" shall mean any lending institution, Farm Credit
Bank, production credit association or other Farm Credit System
institution to which Lender sells a participating interest in the
Note, including each Participant's successors or assigns. 
"Participants" shall mean, collectively, all such institutions
acquiring a participating interest in the Note.

     "PBGC" shall mean the Pension Benefit Guaranty Corporation
established under ERISA.

     "Permitted Liens" shall mean: (a) Liens existing on the date
hereof with respect to the Collateral and which the Lender permits to
be listed on Schedule B of the Title Insurance; (b) Liens in favor of
Lender; (c) the interest of lessors under Operating Leases permitted
hereunder; (d) Liens for (i) property taxes not delinquent, (ii) taxes
not yet due; and (iii) mechanic's and materialmen's Liens with respect
to liabilities which are not yet due or which are being contested in
good faith, and (e) purchase money Liens on Equipment, provided,
however, that (i) such Lien is created within one hundred twenty (120)
days of the acquisition of such Equipment, (ii) such Lien attaches
only to the specific items of Equipment so acquired, (iii) such Lien
secures only the Indebtedness incurred to acquire such Equipment, and
(iv) the aggregate principal amount of Indebtedness secured by such
Liens does not exceed $10,000,000.00 at any one time outstanding.

     "Person" shall mean and include any individual, sole
proprietorship, partnership, joint venture, trust, estate,
unincorporated organization, association, corporation, institution,
entity, party or government (whether national, federal, state, county,
city, municipal, or otherwise, including, without limitation, any
instrumentality, division, agency, body or department thereof).

     "Plan" shall mean any employee benefit plan, program,
arrangement, practice or contract, maintained by or on behalf of
Borrower or any ERISA Affiliate, which provides benefits or
compensation to or on behalf of employees or former employees, whether
formal or informal, whether or not written, including, but not limited
to, the following types of plans:

     (a)  Executive Arrangements - any bonus, incentive compensa-
     tion, stock option, deferred compensation, commission,
     severance, "golden parachute", "rabbi trust", or other
     executive compensation plan, program, contract, arrangement or
     practice ("Executive Arrangements");

     (b)  ERISA Plans - any "employee benefit plan", except any
     Multiemployer Plan, as defined in Section 3(3) of ERISA,
     whether maintained by or for a single employee or by or for
     multiple employees, including, but not limited to, any defined
     benefit pension plan, profit sharing plan, money purchase
     plan, savings or thrift plan, stock bonus plan, employee stock
     ownership plan, or any plan, fund, program, arrangement or
     practice providing for medical (including post-retirement
     medical), hospitalization, accident, sickness, disability, or
     life insurance benefits ("ERISA Plans");

     (c)  Other Employee Fringe Benefits - any stock purchase,
     vacation, scholarship, day care, prepaid legal services,
     severance pay or other fringe benefit plan, program, arrange-
     ment, contract or practice ("Fringe Benefit Plans"); and

     (d)  Multiemployer Plan - any Multiemployer Plan.

     "Possible Default" shall mean, an event, condition or thing
which, with the lapse of any applicable grace period or the giving of
notice, or both, as may be required, would constitute an Event of
Default referred to in Article IX hereof.

     "Regulatory Change" shall mean, with respect to Lender, the
adoption on or after the date hereof of any applicable federal or
state law, rule or regulation or any change after such date in any
such federal of state law, rule or regulation, or any adoption or
change in the interpretation or administration thereof by any court,
governmental authority, the FCBT, the FCA, or comparable agency or
monetary authority charged with the interpretation or administration
thereof, or compliance by Lender with any request or directive made
after such date (whether or not having the force of law) of any such
court, authority, the FCBT, the FCA, or comparable agency or monetary
authority.

     "Subordinated Notes" shall mean the $100,000,000.00 Pilgrim's
Pride Corporation Senior Subordinated Notes Due 2003, issued under the
Subordinated Notes Indenture.

     "Subordinated Notes Indenture" shall mean an Indenture,
between Borrower, as Issuer, and Ameritrust Texas National
Association, as Trustee, providing for the issuance of Borrower's
Senior Subordinated Notes Due 2002, in an aggregate principal amount
not to exceed $100,000,000.00 as such Indenture is in effect on the
Closing Date, or as it may thereafter be amended, supplemented or
modified.

     "Subsidiary" shall mean any corporation fifty percent (50%) or
more of the Voting Shares of which is owned, directly or indirectly,
by Borrower, including (without limitation) those Subsidiaries listed
on Schedule 5.22 hereto.  

     "Supplemental Loan Agreement" shall mean any written agreement
between Borrower and Lender supplementing, amending or modifying the
terms of this Agreement.  Any such agreement must be signed by
Borrower and Lender.

     "Tangible Net Worth" shall mean the Net Worth minus the amount
of all Intangible Assets of Borrower and its Subsidiaries, determined
on a consolidated basis in accordance with GAAP.

     "Title Company" shall mean the issuer, whether one or more, of
the Title Insurance.

     "Title Insurance" shall mean one or more mortgagee's policies
of title insurance, all in form and substance satisfactory to Lender
and containing no exceptions (printed or otherwise) which are
unacceptable to Lender, issued by a title company (or, if Lender so
requires, by several title companies) acceptable to Lender in the
aggregate amount of at least $15,000,000.00 and insuring that Lender
has a first and prior Deed of Trust on the Collateral, subject only to
the Permitted Liens described in the Deed of Trust.

     "Total Liabilities" shall mean all obligations, Indebtedness
or other liabilities of any kind or nature, fixed or contingent, due
or not due, which, in accordance with GAAP would be classified as a
liability on the balance sheet of any Person.

     "Voting Shares" of any corporation shall mean shares of any
class or classes (however designated) having ordinary voting power for
the election of at least a majority of the members of the board of
directors (or other governing bodies) of such corporation, including
shares having such power by reason of the happening of any
contingency.

     "Working Capital" shall mean as of any date, the amount by
which the Current Assets of Borrower and its Subsidiaries as of such
date exceeds the Current Liabilities of the Borrower and its
Subsidiaries, as of such date.

     "Working Capital Credit Agreement" shall mean that certain
Secured Credit Agreement, dated as of June 30, 1994, among the
Borrower, Harris Trust and Savings Bank, individually and as Agent,
and the other banks party thereto, as thereafter amended, modified or
supplemented from time-to-time, together with any agreement governing
Indebtedness incurred to refinance in its entirety the Indebtedness
and commitments then outstanding or permitted to be outstanding under
such Working Capital Credit Agreement.

     1.02.     Accounting Terms: Calculations.  All accounting terms
not specifically defined herein shall have the meanings generally
attributed to such terms under GAAP.  Calculations hereunder shall be
made and financial data required thereby shall be prepared, both as to
classification of items and as to amounts, in accordance with GAAP,
consistently applied (except as otherwise specifically required
herein).

     1.03.     Terminology.  All personal pronouns used in this
Agreement, whether used in the masculine, feminine or neuter gender,
shall include all other genders; the singular shall include the
plural, and the plural shall include the singular.
     
     1.04.     Exhibits.  All exhibits and schedules attached hereto
are by reference made a part hereof.


ARTICLE II.  REVOLVING LINE OF CREDIT

     Lender hereby establishes the Line of Credit in favor of
Borrower as follows:

     2.01.     Purpose.  The purpose of this loan to Borrower is to
advance funds to: 
     
          (a)  pay off the balance of Borrower's obligations to
     John Hancock Mutual Life Insurance Company left owing and
     unpaid on that one certain promissory note dated February 1,
     1988 in the original principal amount of Twenty Million
     Dollars ($20,000,000.00) executed by Borrower and payable to
     the order of John Hancock Mutual Life Insurance Company, which
     promissory note and the Liens securing same shall be assigned
     to Lender;

          (b)  pay off the balance of Borrower's obligations to
     John Hancock Mutual Life Insurance Company left owing and
     unpaid on that one certain promissory note dated April 25,
     1991 in the original principal amount of Five Million Dollars
     ($5,000,000.00) executed by Borrower and payable to the order
     of John Hancock Mutual Life Insurance Company, which
     promissory note and the Liens securing same shall be assigned
     to Lender;
     
          (c)  to provide funds for Borrower on a revolving line
of credit; and

          (d)  to fund Borrower's purchase of $1,000.00 of
Class-B Stock in Lender.
     
     2.02.     Loan  Limit.  The total of principal outstanding at
any time under the Note shall not exceed (a) $30,000,000.00, or (b)
seventy-five percent (75%) of the Market Value of the Collateral,
whichever is less.
          
     2.03.     Adjustments in Amount.  If, at any time during the
term of this Agreement, Borrower shall execute a new or amended
Supplemental Loan Agreement, Lender may in its sole discretion as a
requirement of such Supplemental Loan Agreement establish a lesser
amount than that established under Section 2.02 above as the Loan
Limit.

     2.04.     Revolving Commitment.  The Line of Credit is a
revolving line of credit, and prior to the termination of the Line of
Credit under Section 2.05 of this Agreement or otherwise, repayments
of principal shall reinstate the Commitment, and Borrower shall have
the right to obtain further Advances provided that the amount
outstanding at any one time does not exceed the Loan Limit and all
conditions have been satisfied.

     2.05.     Term.

          (a)  The Line of Credit shall become effective as of
     the Closing Date.  The Line of Credit shall continue in effect
     until the Expiration Date, which shall be the earlier to occur
     of (i) April 1, 2003, (ii) the acceleration of the maturity of
     the Note upon the occurrence of an Event of Default, or (iii)
     the date on which Lender's obligation to fund Advances
     otherwise terminates hereunder.  On the Expiration Date, any
     undisbursed amounts available under the Line of Credit shall
     expire and Lender shall not be obligated to make additional
     Advances.  The Obligations as of the Expiration Date shall
     continue as the Obligations of Borrower in accordance with the
     terms and conditions of this Agreement until paid in full.

          (b)  Lender shall not be obligated to renew or extend
     the time for payment of the Note, or any Obligation past its
     stated maturity.  Any agreement to renew or extend the Note
     must be in writing and executed by both parties.  Any renewal
     or extension of the Note shall be subject to the terms and
     conditions of this Agreement, and any subsequent amendments,
     modifications thereto or replacements thereof.  

          (c)  At the Expiration Date the Obligations shall be
     due and payable in full to Lender.  The occurrence of an Event
     of Default or other termination of the Line of Credit shall
     not in any way release or relieve Borrower from its
     liabilities and obligations under this Agreement, the Note, or
     any other Loan Document, which liabilities and obligations
     shall remain in full force and effect until the Obligations
     have been paid in full.

     2.06.     Advances; Procedures.  So long as Borrower is entitled
to obtain an Advance under this Agreement, and subject to the terms
and conditions set forth herein, Lender agrees to make such Advances
of principal under the Line of Credit as Borrower may from time to
time request.  Advances shall be made in accordance with this
Agreement and with any applicable policies and procedures of Lender
unless Lender, in its sole discretion, waives the same in writing. 
Borrower shall give Lender notice of Borrower's request for the
funding of an Advance in a form identical to that which is attached
hereto as Exhibit "A".  Not later than 1:00 p.m. (Texas time) on the
date specified for an Advance, Lender shall make available to Borrower
the amount of the Advance in immediately available funds at an account
designated by Borrower, or in whatever form the parties agree to. 
Each notice requesting an Advance shall provide at least three (3)
Business Days notice of a requested Advance.  Each request for an
Advance shall specify (a) the amount of such Advance, which shall be
in increments of One Million Dollars ($1,000,000.00) or more, unless
there is less than $1,000,000.00 which is unfunded under the Line of
Credit, in which case all of the remaining Line of Credit may be
drawn; (b) the date such Advance is requested, which shall be on a
Business Day; (c) the then current unpaid principal balance of the
Note; (d) the then current unused portion of the Line of Credit; (e) 
a certification that the requested Advance is allowed under this
Agreement; (f) a certification that no Event of Default exists; and
(g) a certificate that, as of the date of the request and immediately
following Lender's Advance, there is no, and will be no, default or
event which with the giving of notice or the passage of time would
constitute an event of default under any loan, loan agreement,
indenture, or agreement including, but not limited to, the
Creditanstalt Agreement, the Working Capital Credit Agreement, the
Subordinated Note Indenture or any Capital Lease; and (h) the
signature of an authorized representative of Borrower.

     2.07.     Effect of Request.  Each request by Borrower for an
Advance shall, in and of itself, constitute a continuing
representation and warranty by Borrower that: (a) Borrower then is,
and at the time the Advance is actually made will be, entitled under
this Agreement to obtain the Advance; (b) all of the covenants,
agreements, representations and warranties made by Borrower in this
Agreement and any Loan Documents are in all material respects true and
correct and have been fully complied with, as of the date of the
request; and (c) all of the representations set forth in the request
are true and correct.
 
     2.08.     Interest.  All principal amounts included in the
Obligations, including Accrued Interest in Principal, shall bear
interest at the Discount Rate plus 1.75%.  Interest shall accrue on
each Advance from the date of funding to the date of payment,
calculated on the actual number of days elapsed based upon a 365-day
year or in the case of leap year, a 366-day year.  Adjustments to the
variable interest rate shall occur no more frequently than monthly and
shall be effective on the first day of the month following Lender's
determination to adjust the rate.  There shall be no limitation on the
amount by which Lender may adjust the rate.  

     2.09.     Interest Savings Clause.  It is expressly stipulated
and agreed to be the intent of Borrower and Lender at all times to
comply with applicable law governing the maximum rate or amount of
interest payable on the Obligations.  If the applicable law is ever
judicially interpreted so as to render usurious any amount called for
under this Agreement, the Note or under any other Loan Document, or
contracted for, charged, taken, reserved or received with respect to
the Obligations, or if Lender's exercise of the option to accelerate
the maturity of the Note or if any prepayment by Borrower results in
Borrower having paid any interest in excess of that permitted by
applicable law, then it is Borrower's and Lender's express intent that
all excess amounts theretofore collected by Lender be credited on the
principal balance of the Note (or if the Note and all other
Obligations have been or would thereby be paid in full, refunded to
Borrower), and provisions of the Note and the other Loan Documents
shall be immediately deemed reformed and the amounts thereafter
collectible hereunder or thereunder reduced, without the necessity of
the execution of any new documents, so as so comply with the
applicable law, but so as to permit the recovery of the fullest amount
otherwise called for under this Agreement and the Note, not exceeding
the highest lawful amount of interest on the Obligations.  All sums
paid or agreed to be paid to Lender for the use, forbearance or
detention of money shall, to the extent permitted by applicable law,
be amortized, prorated, allocated and spread throughout the full term
of the Note until payment in full so that the rate or amount of
interest on account of the Obligations does not exceed the usury
ceiling from time-to-time in effect and applicable to the Note. 
Notwithstanding anything to the contrary contained herein or in any of
the other Loan Documents, it is not the intention of Lender to demand
payment of any interest that has not accrued at the time of
acceleration or to collect unearned interest at the time of any
acceleration.

     2.10.     Use of Proceeds.  The proceeds of each Advance shall
be used for general corporate purposes.

     2.11.     Payment.  Each payment by Borrower to Lender pursuant
to the Note and this Agreement shall be made prior to 1:00 p.m.
(Central time) on the date due and shall be made without set-off or
counterclaim to the Lender by delivering the amount due to the FCBT
(for Lender's account), or at such other place as Lender may designate
from time-to-time in writing to Borrower.  Each such payment shall be
in lawful currency of the United States of America and in immediately
available funds.  If the due date for any payment hereunder or under
the Note would otherwise fall on a day which is not a Business Day,
then such payment shall be due on the next succeeding Business Day and
interest shall be payable on the principal amount of such payment for
the period of such extension.

          (a)  The principal of this Note shall be due and
     payable in monthly installments payable on the first day of
     each calendar month beginning May 1, 1995 and continuing
     regularly and monthly thereafter until April 1, 2003 when the
     entire unpaid balance of principal and accrued interest shall
     be due and payable.  Interest, computed on the unpaid
     principal balance of the Note, shall be due and payable
     monthly as it accrues on the same dates as, but in addition
     to, the installments of principal.  If all or any amount due
     under the Note or any installment thereof is not paid when
     due, whether the amount is due by acceleration or otherwise,
     then at Lender's sole option, all accrued and unpaid interest
     shall be added to the principal balance, and interest shall
     accrue thereon at this applicable rate otherwise established
     in this Agreement or the Note.
     
          (b)  The monthly principal installment due under the
     Note shall equal the monthly payment of principal necessary to
     repay the then unpaid principal balance of the Note in equal
     monthly installments as if the final monthly installment of
     principal was due on April 1, 2005.  Notwithstanding any
     change in the amount of monthly installments due under the
     Note, on April 1, 2003, the entire amount of the Note,
     principal and interest then remaining unpaid, shall be then
     due and payable.
     
          (c)  The failure of the Lender to adjust the monthly
     principal payment following each Advance shall not affect the
     Expiration Date or result in the waiver or prejudice of
     Lender's right to establish a new monthly principal
     installment thereafter.
     
          (d)  Notwithstanding the forgoing, principal and
     accrued interest then remaining unpaid shall be due on the
     Expiration Date.
     
          (e)  If any date for payment of principal or interest
     under this Agreement is not a Business Day, then such payment
     shall be due on the next succeeding Business Day and interest
     shall be payable on the principal amount for the period of
     such extension.

     2.12.     Indemnity.  Each request for an Advance shall be
irrevocable and binding upon Borrower and Borrower agrees to and shall
indemnify Lender against any and all costs, losses, or expenses
incurred by Lender as a result of any failure of Borrower to fulfill
on or before the Advance date specified in the notice of Advance, the
conditions to such Advance set forth in this Agreement.  Such
indemnity is automatic and any amounts payable to Lender shall be
immediately due and owing, which amounts include, without limitation,
any cost, loss or expense incurred by Lender by reason of the
liquidation or re-employment of assets or other funds acquired by
Lender to fund the requested Advance.

     2.13.     Application of Payments.  Payments shall be applied,
within Lender's sole discretion, first to expenses reasonably incurred
by Lender which are chargeable to Borrower under the terms of this
Agreement, the Note, or any other Loan Document, then to accrued
interest, and then to principal.

     2.14.     Evidence of Debt.  The outstanding balance of the
Obligations shall be recorded by Lender on its books and accounts from
time to time.  The Advance and payment of principal and the accrual
and payment of interest shall be evidenced by notations made by Lender
on its books, showing the date and amount of each Advance, accrual or
payment.  Upon written request by Borrower, Lender shall provide a
written statement of the outstanding principal amount of the Note. 
The aggregate unpaid balance of the Obligations reflected on Lender's
books shall be prima facie evidence of the correct balance and may be
admitted into evidence in any legal proceeding arising between the
parties for the purpose of establishing the principal and interest
owing and unpaid under the Note, this Agreement and/or any other Loan
Document.

     2.15.     Prepayment.  Borrower has the right to prepay all or
any part of the Note at any time without a prepayment penalty,
provided that any such prepayment shall be in integral multiples of
$100,000.00.  

     2.16.     Commitment Fees.  Borrower agrees to pay to Lender a
loan origination fee of $150,000.00, $75,000.00 of which was paid at
the time of Lenders conditional commitment and the remaining
$75,000.00 of which shall be payable in full on or before the Closing
Date.  No portion of the loan origination fee is refundable or
returnable to Borrower notwithstanding the prepayment of the Note or
the termination of the Line of Credit prior to the Maturity Date.

ARTICLE III.  COLLATERAL

     3.01.     Liens.  Borrower agrees to grant Lender, as security
for the Obligations, a first, prior, perfected and enforceable
security interest and lien in all Collateral now owned or hereafter
acquired.

     3.02.     Collateral.  The Obligations are and shall be secured
by the following: 
     
          (a)  All of the Land;

          (b)  All of the Equipment;

          (c)  Lender's right to set off and apply toward
     payment of the Obligations (subject to the duty to provide
     simultaneous notice to, but without prior demand upon
     Borrower) any and all deposit balances and other sums of
     indebtedness owed or other property held by Lender for the
     account of Borrower, including all amounts currently in or
     hereafter deposited or contributed to, any Advance Conditional
     Payment Account with Lender;
     
          (d)  such other security or Collateral granted,
     assigned, or pledged by Borrower in favor of Lender whether
     granted of even date herewith or at any time hereafter; and.

          (e)  all additions, substitutions, accessions to,
     replacements for any of the above, and proceeds thereof.

     3.03.     Additional Documentation.  Borrower shall, upon
request, execute and deliver to Lender such additional documentation
in form and content acceptable to Lender as and when Lender requests
for the purpose of creating, documenting, transferring, assigning,
delivering, or perfecting any interest in any Collateral contemplated
by this Agreement.  Until such time as Lender shall have perfected its
security interest or lien, Borrower shall hold in trust for Lender all
property or Collateral acquired by Borrower.  Until the payment and
satisfaction in full of the Obligations, Lender's Liens on the
Collateral and all products and proceeds thereof shall continue in
full force and effect.  Lender may file one or more financing
statements disclosing Lender's Liens under this Agreement without
Borrower's signature appearing thereon and Borrower shall pay the
costs of or expenses incidental to any recording or filing of any
financing statements concerning Collateral.  Borrower agrees that a
copy of this Agreement is sufficient as a financing statement.

     3.04.     Right to Inspect.  Lender (or any person or person
designated by it), in its sole discretion, shall have the right to
call at any place of business of Borrower or at any location where
Collateral may be found at any reasonable time, and, without
hinderance or delay, to inspect the Collateral and to inspect, review,
check and make extracts of Borrower's books, records, journals,
orders, receipts and any other correspondence and other data relating
to the Collateral, to Borrower's business or to any other transactions
between the parties hereto and to discuss any of the foregoing with
any of Borrower's employees, officers and directors and with its
independent accountants.  Lender's right to inspect shall include the
right of each Participant to join Lender in any such inspection,
review, check and discussion.

     3.05.     Appraisals.  Lender shall have the right and option to
order, make or have made, new or updated appraisals on all or any part
of the Collateral, which new or updated appraisals shall be at
Borrower's sole expense.  Provided, however, that Lender may only
exercise said right or option (a) when necessary to comply with the
Act, or (b) at reasonable intervals and when reasonably necessary.


ARTICLE IV.  CONDITIONS PRECEDENT

     4.01.     General Conditions.  Notwithstanding any other
provision of this Agreement, it is understood that Lender shall have
no obligation to fund the Note, unless and until the conditions set
forth in this Section have been met to the sole and complete
satisfaction of Lender and its counsel.  Lender shall receive prior
to, or at the time of Closing (or, if agreed to in writing by Lender,
within a reasonable time after such execution), all of the following
which shall be in form and substance reasonably satisfactory to
Lender:  

          (a)  Resolution of Borrower.  A certified copy of the
     resolution of the Board of Directors of Borrower authorizing
     the execution, delivery and performance of this Agreement, the
     Note, and other Loan Documents to which Borrower is a party;
     
          (b)  Articles of Incorporation; Bylaws.  Certified
     Copies of the Articles of Incorporation, and Bylaws of
     Borrower;

          (c)  Certificate of Incumbency.  A certificate of the
     Secretary of Borrower certifying the names of the officers of
     Borrower authorized to execute and deliver this Agreement, the
     Note, and other Loan Documents together with the true
     signatures of such officers;

          (d)  Officer's Certificate.  A certificate of the
     Chief Executive Officer or Chief Financial Officer of Borrower
     to the effect that, based upon his review of this Agreement,
     the Note, and Loan Documents and the Officer's knowledge of
     the affairs of Borrower, all of the representations and
     warranties of Borrower contained herein are true and correct
     as of the date of this Agreement and further, the Officer has
     no actual knowledge of any Event of Default hereunder or under
     the Note, or under any Loan Document;
     
          (e)  Note.  The Note, duly executed and delivered by
     Borrower;
     
          (f)  Compliance with Laws.  Evidence which is
     satisfactory to Lender that Borrower is in compliance with all
     applicable Environmental Laws, regulations, policies, orders
     and permitting and licensing requirements to which Borrower,
     its operations or property, may be subject;
     
          (g)  Opinion of Borrower's Counsel.  A satisfactory
     opinion from Borrower's counsel is given as to matters
     including, but not limited to, the legal existence of
     Borrower, the power and authority of Borrower to enter into
     the transaction contemplated by this Agreement, the
     enforceability of the Loan Documents, the validity, priority,
     and perfection of the Liens on the Collateral, a no consent
     opinion, a zoning compliance opinion, a "Senior Debt" opinion,
     and a no default opinion;
     
          (h)  Good Standing of Borrower.  Evidence satisfactory
     to Lender has been presented showing Borrower's good standing
     and qualification to do business in all states in which
     Collateral is located;
     
          (i)  Appraisal.  A satisfactory appraisal of the
     Collateral, acceptable to Lender in the exercise of its sole
     discretion, reflecting a Market Value which must provide for
     no more than a sixty percent (60%) loan-to-value ratio;
     
          (j)  Participant Commitments.  Commitments from
     Participants sufficient to fund the Note without Lender
     exceeding its regulatory lending limit when aggregated with
     all other loans, commitments and/or leases made or
     participated in, by Lender;
     
          (k)  Prior Approval.  Written approvals from the FCBT
     and North Texas Production Credit Association;
     
          (l)  Title Policies.  Policies providing Title
     Insurance on that portion of the Collateral which represents
     real property, which policies (i) are in the minimum aggregate
     amount of $15,000,00.00, (ii) in forms approved by the
     insurance regulatory authorities of Texas and Arkansas, and
     (iii) include exceptions only for the Permitted Liens.

          (m)  Environmental Studies.  Environmental studies,
     audits and/or assessments on the Land as is necessary to
     reasonably assure Lender of the condition of such real
     property;
     
          (n)  Insurance Policies.  Evidence satisfactory to
     Lender that Borrower has obtained the insurance policies
     required by this Agreement and the Loan Documents;
     
          (o)  Fees.  Evidence that all fees due and owing to
     Lender or any third party, if any, in connection with the
     execution of this Agreement and the establishment of the Line
     of Credit in favor of Borrower have been paid in full to
     Lender;
     
          (p)  Audited Financial Statements.  A certified copy
     of Borrower's most recent audited financial statement prepared
     by an independent and nationally recognized auditing firm of
     certified public accountants which is a member in good
     standing of the American Institute of Certified Public
     Accountants and which is acceptable to Lender;
     
          (q)  Loan Agreement.  This Agreement duly executed by
     those officers authorized to execute and deliver it;
     
          (r)  Loan Documents.  Each of the other Loan Documents
     duly executed by those officers authorized to execute and
     deliver same;
     
          (s)  Litigation.  A certificate executed by a duly
     authorized officer of Borrower stating that no litigation,
     investigation or proceeding before or by any arbitrator,
     governmental authority or any other Person is continuing or
     threatened against Borrower or any of its officers, directors
     or affiliates (i) with respect to this Agreement, the Note or
     any other Loan Documents, or any of the transactions
     contemplated hereby or thereby, or (ii) which could have a
     Material Adverse Effect.  Lender shall also receive either a
     summary and analysis of all litigation in which Borrower is
     involved or an opinion of counsel, in form and substance
     acceptable to Lender, to the effect that no litigation in
     which Borrower is involved would, in the event of an adverse
     determination, have a Material Adverse Effect;
     
          (t) Filing of Loan Documents.  Each Loan Document
     required under law or requested by Lender to be filed,
     registered or recorded in order to create, in favor of Lender
     or for the benefit of Lender, a perfected first Lien on the
     Collateral shall have been properly filed, registered or
     recorded in each jurisdiction in which the filing,
     registration or recordation thereof is so required or
     requested, and Lender shall have received an acknowledgement
     copy, or other evidence satisfactory to it, of each such
     filing, registration or recordation and satisfactory evidence
     of the payment of any necessary fee, tax or expense relating
     thereto;
     
          (u)  Transfer of John Hancock Notes and Liens.  The
     promissory notes executed by Borrower to John Hancock Mutual
     Life Insurance Company, dated February 1, 1988 and April 25,
     1991 and in the original principal amounts of $20,000,000.00
     and $5,000,000.00 respectively, together with the Liens
     securing same, are transferred to Lender in a manner
     satisfactory to Lender.

          (v)  Operating Budget.  Financial projections and/or a
     pro forma operating budget reasonably demonstrating the
     ability of Borrower to remain in compliance with the
     covenants, agreements and conditions set forth in this
     Agreement, together with consolidated interim financial
     statements of Borrower and its Subsidiaries for the period
     from October 1, 1994 to February 28, 1995, each consisting of
     a consolidated balance sheet, consolidated statement of income
     (loss), consolidated statement of changes in stockholders'
     equity and consolidated statement of cash flows, all of which
     shall be true and correct in all material respects and contain
     no material misrepresentation or omission, and fairly
     represent the consolidated financial position, assets and
     liabilities of Borrower and its Subsidiaries as of the date
     thereof; and

          (w)  Other Information.  Such other information and
     documents as may reasonably be required by Lender and Lender's
     counsel.
     
     4.02.     Specific Conditions to Each Advance.  Notwithstanding
any other provision of this Agreement, it is understood that the
obligation of the Lender to make any Advance under this Agreement,
(including the initial Advance) and the right of Borrower to request
any such Advance shall be subject to the following conditions
precedent:
     
          (a)  No Defaults.  As of the date of the making of
     such Advance, there shall exist no Default, Event of Default
     or Possible Default.  Lender is not obligated to make an
     Advance if the funding of such an Advance would result in an
     Event of Default.

          (b)  Compliance with Agreement.  Borrower and
     Guarantor shall have performed and compiled with all
     agreements, covenants and conditions contained herein and in
     each of the Loan Documents;   

          (c)  No Material Adverse Change.  As of the date of
     making such Advance, no change that would cause a Material
     Adverse Effect has occurred since the date of the financial
     statements referenced in Section 5.04; 
     
          (d)  Request for Advance.  Lender shall have received
     from Borrower a request for Advance in the form of Exhibit "A"
     in accordance with the provisions of Section 2.06 of this
     Agreement;

          (e)  Representations and Warranties.  The
     representations and warranties contained in Article V hereof
     and in each of the Loan Documents shall be true in all
     respects on the date of making of such Advance, with the same
     force and effect as though made on and as of that date;
          
          (f)  Financial Statements.  All of the reporting
     requirements in Section 8.02 hereof have been satisfied. 
     Moreover, the most recent financial statements of Borrower and
     Guarantor delivered to Lender shall be true and correct,
     fairly represent the financial condition of Borrower and
     Guarantor and shall have been prepared in accordance with
     GAAP;  as of the date of such Advance, there shall be no
     obligations, liabilities or Indebtedness (including contingent
     and indirect liabilities and obligations or unusual or forward
     or long-term commitments) of Borrower and Guarantor, which are
     (separately or in the aggregate) material and are not
     reflected in such financial statements;
     
          (g)  Bankruptcy Proceedings.  No proceeding or case
     under the United States Bankruptcy Code shall have been
     commenced by or against Borrower or Guarantor;

          (h)  Compliance with Laws.  Borrower, Guarantor and
     each Subsidiary shall be in compliance with all applicable
     Environmental Laws, regulations, policies, orders and
     permitting and licensing requirements to which each such
     Person or Person's operations or property may be subject;

          (i)  No Injunction.  No action, proceeding,
     investigation, regulation or legislation shall have been
     instituted, threatened or proposed before any Court,
     governmental agency or legislative body to enjoin, restrain or
     prohibit, or to obtain substantial damages in respect of, or
     which is related to or arises out of this Agreement, or which
     in Lender's sole discretion, would make it inadvisable to fund
     any such Advance;
     
          (j)  Regulatory Restrictions.  Borrower and Guarantor
     shall not be subject to any applicable statute, rule,
     regulation, order, writ or injunction of any court or
     governmental authority or agency which would materially
     restrict or hinder the conduct of Borrower's business, or
     which would have a Material Adverse Effect on the business,
     property, assets, operations or conditions, financial or
     otherwise, of Borrower or Guarantor; and

          (k)  No Default on Other Indebtedness.  Borrower is
     not in default, and will not be in default following the
     making of an Advance, under the terms of any other loan, loan
     agreement, indenture, or agreement including, but not limited
     to, the Creditanstalt Agreement, the Working Capital Credit
     Agreement, the Subordinated Notes Indenture, or any Capital
     Lease.


ARTICLE V.  REPRESENTATIONS AND WARRANTIES

     As of the date of this Agreement and on the date of each
request for an Advance, Borrower and Guarantor hereby each represent
and warrant to Lender, which representations and warranties will
survive the creation of the Obligations and any extension of credit
thereunder the following matters.  Each representation and warranty
shall be true and correct on the Closing Date and on the date of each
Advance and shall continue to be true and correct until the
Obligations have been repaid in full:

     5.01.     Corporate Existence and Qualification.  Borrower and
each of its Subsidiaries are duly organized, validly existing and in
good standing under the laws of its jurisdiction of incorporation. 
Borrower is duly qualified as a foreign corporation in good standing
in the state of Texas and in each other state wherein the conduct of
its business or the ownership of its property requires such
qualification and each Subsidiary is duly qualified as a foreign
corporation in good standing in each jurisdiction wherein the conduct
of its business or the ownership of its property requires such
qualification.

     5.02.     Corporate Authority.  Borrower and each of its
Subsidiaries have the corporate power under their respective charters,
articles of incorporation and bylaws to enter into this Agreement, the
Note, and all the Loan Documents.  The execution and delivery by
Borrower and the performance by Borrower of the Obligations under this
Agreement, the Note, and the Loan Documents have been duly authorized
by all requisite corporate action on the part of Borrower and do not
and will not violate any provision of any law, rule or regulation, any
judgment, order or ruling of any court or governmental agency, the
organizational papers or bylaws of Borrower or any of its
Subsidiaries, or any indenture, agreement or other instrument to which
Borrower or any of its Subsidiaries is a party or by which Borrower or
any of their respective assets is or are bound.

     5.03.     Enforceability.  This Agreement, the Note and all the
Loan Documents, when executed and delivered, are or will be the legal,
valid and enforceable obligations of Borrower and Guarantor,
enforceable against each of them in accordance with their respective
terms.

     5.04.     Financial Statements.

          (a)  The financial statement of Guarantor dated
     September 1, 1994, the consolidated financial statements of
     Borrower and its Subsidiaries for Fiscal Years ending October
     1, 1994 and October 2, 1993, and the Form 10-Q certified by
     the Chief Financial Officer for the Fiscal Quarter ending
     December 30, 1994, and Borrower's unaudited financial
     statements for Fiscal Year to date as of February 25, 1995,
     each consisting of a consolidated balance sheet, consolidated
     statement of income (loss), consolidated statement of changes
     in stockholders' equity and consolidated statement of cash
     flows, copies of which have been delivered to Borrower to
     Lender, are true and correct in all respects and contain no
     misstatement or omission, and fairly present the consolidated
     financial position, assets and liabilities of Borrower, its
     Subsidiaries and Guarantor as of the date thereof, and the
     consolidated results of operations of Borrower and its
     Subsidiaries for the period then ended, and as of the date
     thereof there are no liabilities of Borrower, any of the
     Subsidiaries or Guarantor, fixed or contingent, which are
     material that are not reflected in such financial statements;

          (b) Since the date of the financial statements
     referred to in Subsection (a) there has been no material
     adverse change in the assets, liabilities, financial position
     or results of operations of Borrower, any of the Subsidiaries
     or Guarantor, and neither Borrower, any of its Subsidiaries or
     Guarantor has (i) incurred any obligation, liability, fixed or
     contingent, which would have a Material Adverse Effect, (ii)
     incurred any Indebtedness or obligations under any Capital
     Lease other than the obligations and trade payables and other
     liabilities arising in the ordinary course of Borrowers,
     Guarantors or such Subsidiary's business, or (iii) guaranteed
     the Indebtedness of any other Person.

     5.05.     Performance of Other Obligations.  Borrower, the
Subsidiaries and Guarantor are not a party to any agreement,
instrument, or corporate restructure which could have a Material
Adverse Effect on the operations of Borrower, any Subsidiary or
Guarantor, or their respective abilities to perform the Obligations
under this Agreement and the Loan Documents.

     5.06.     Absence of Litigation.  There is no action, suit,
investigation or proceedings pending or, to the knowledge of Borrower,
threatened against or affecting Borrower, Guarantor, or any Subsidiary
by or before any court, arbitrator or administrative or governmental
body, which might result in a Material Adverse Effect in the business,
financial condition or operations of Borrower, Guarantor, or any
Subsidiary or the enforceability of this Agreement, the Note, or any
Loan Document, except as set forth in the attached Schedule 5.06.

     5.07.     Absence of Default.  Neither Borrower, any Subsidiary,
nor Guarantor are in default nor has any event or circumstance
occurred which, but for the passage of time or the giving of notice,
or both, could constitute default hereunder or under any agreement to
which either is a party, including agreements for the borrowing of
money, the Creditanstalt Agreement, the Working Capital Credit
Agreement, the Subordinated Notes Indenture, or any regulation order,
writ, judgment, injunction, decree or determination or award by any
court or governmental agency which default could Materially Adversely
Effect the business or financial condition of Borrower, Guarantor, or
any Subsidiary.  Borrower, Guarantor, and each Subsidiary have
satisfied all final and non-appealable judgments and are not in
default with respect to any judgment, writ, injunction, decree, or
order of any court, arbitrator or other governmental authority.

     5.08.     Title and Liens.  Borrower has and shall continue to
have good title and ownership to all Collateral.  All of the
Collateral is subject to a first priority Lien in favor of Lender,
perfected to the extent required by Lender, and none of the Collateral
is subject to any Lien or other encumbrance other than to Lender and
other than the Permitted Liens.

     5.09.     Loan Documents Duly Executed.  Each Loan Document is
genuine and valid, has been duly executed, endorsed or assigned by
each person or entity whose execution, endorsement or assignment is
essential to the validity and Lender's enforceability thereof, has
been duly filed or recorded, and each Loan Document constitutes,
against all persons whomsoever, a valid and legally enforceable Lien
upon or in the property described therein, of the rank and character
represented by Borrower and Guarantor.

     5.10.     Compliance with Laws.  Borrower, Guarantor and each
Subsidiary is substantially in compliance with all federal and state
regulations, rules, directives, and orders, and all other agreements,
permits, licenses, certificates, laws, rules, regulations, orders and
writs concerning or relating to the right of Borrower or a Subsidiary
to conduct its business and to own the assets which it presently owns,
and Borrower, Guarantor and the Subsidiaries are not aware of being
under investigation by any federal agency or any state or local agency
for any reason.  Borrower, Guarantor, and the Subsidiaries are not
subject to any cease and desist order or other enforcement action
taken by any regulatory agency.

     5.11 Consent.  No consent, permission, authorization, order
or license of any governmental authority or other lender is necessary
in order to execute or have enforced, this Agreement or any Loan
Document.

     5.12.     Use of Proceeds.  The proceeds of the Note will be
used for  general corporate purposes.

     5.13 Taxes.  Borrower, Guarantor, and all Subsidiaries have
filed all tax returns required to be filed and paid all taxes shown
thereon to be due, or have obtained from appropriate governmental
authorities extensions for the filing of such returns or the making of
such payments, including interest and penalties, or provided adequate
reserves for payment thereof, except for any such tax, assessment,
charge, levy or claim, the payment of which is being contested in good
faith and by proper proceedings.

     5.14 Knowledge of Environmental Laws.  Borrower is aware
that the Line of Credit may be terminated or suspended by Lender for
Borrower's failure to comply at all times in every material respect
with the Environmental Laws.  Borrower shall keep itself informed as
to, and in compliance with, any changes in the Environmental Laws as
they may be amended from time to time.  Borrower agrees and
acknowledges that Lender shall have no duty to keep Borrower informed
of any changes in the Environmental Laws.

     5.15.     Broker's or Finder's Fees.  No broker's or finder's
fees or commissions have been incurred or will be payable by Borrower,
any Subsidiary, or Guarantor to any Person in connection with the
transactions contemplated by this Agreement.

     5.16.     Regulatory Matters.  Borrower is not subject to
regulation under the Investment Company Act of 1940, as amended, the
Public Utility Holding Company Act of 1935, as amended, the Federal
Power Act, the Interstate Commerce Act or any other federal or state
statute or regulation which materially limits its ability to incur
indebtedness or its ability to consummate the transactions
contemplated by the Agreement.

     5.17.     Disclosure.  Neither this Agreement, nor any other
Loan Document, instrument, agreement, financial statement or
certificate furnished to Lender or any Participant by or on behalf of
Borrower in connection with this Agreement contained an untrue
statement of fact or omits to state any fact necessary to make the
statements therein, in light of the circumstances under which they
were made, not misleading or omits to state any fact which, insofar as
Borrower can now foresee, may in the future have a Material Adverse
Effect on the condition (financial or otherwise) of the business,
operation or properties of Borrower, any Subsidiary, or Guarantor
which has not been set forth in this Agreement or in an instrument,
document, agreement, financial statement or certificate furnished to
Lender in connection herewith.

     5.18.     ERISA.  Except as disclosed on Schedule 5.18 attached
hereto and incorporated herein by reference: 
          (a)  Identification of Plans.  Neither the Borrower
     nor any ERISA Affiliate maintains or contributes to or has
     maintained or contributed to, any Plan or Multiemployer Plan
     that is subject to regulation by Title IV of ERISA;

          (b)  Compliance.  Each Plan has at all times been
     maintained, by its terms and in operation, in accordance with
     all applicable laws, except for such noncompliance (when taken
     as a whole) that will not have a Material Adverse Effect on
     Borrower, or any of its Subsidiaries;
 
          (c)  Liabilities.  Neither the Borrower, any
     Subsidiary, nor any ERISA Affiliate is currently or to the
     best knowledge of Borrower or any ERISA Affiliate will become
     subject to any liability (including withdrawal liability), tax
     or penalty whatsoever, to any Person whomsoever with respect
     to any Plan, including, but not limited to, any tax, penalty
     or liability arising under Title I or Title IV of ERISA or
     Chapter 43 of the Internal Revenue Code;
     
          (d)  Funding.  The Borrower, its Subsidiaries, and
     each ERISA Affiliate have made full and timely payment of (i)
     all amounts required to be contributed under the terms of each
     Plan and applicable law and (ii) all material amounts required
     to be paid as expenses of each Plan.  No Plan has any "amount
     of unfunded benefit liabilities" (as defined in 4001(a)(18)
     of ERISA); and
     
          (e)  Insolvency: Reorganization.  No Plan is insolvent
     (within the meaning of 4245 of ERISA) or in reorganization
     (within the meaning of 4241 of ERISA).

     5.19.     Solvency.  Giving effect to the execution and delivery
of the Loan Documents and the consummation of the Line of Credit
contemplated hereby and taking into account all other Indebtedness and
obligations of Borrower, Borrower (i) has capital sufficient to carry
on its business and transactions and all business and transactions in
which it is about to engage, (ii) is able to pay its debts as they
mature and (iii) owns property whose fair, saleable value is greater
than the amount required to pay its debts.

     5.20.     Corporate and Trade or Fictitious Names.  During the
five (5) years immediately preceding the date of this Agreement,
neither Borrower nor Guarantor nor any of their respective
predecessors have been known as or used any corporate, trade or
fictitious name other than their current names and except as disclosed
on Schedule 5.20 hereto.

     5.21.     Equipment.  The Equipment (i) is and shall remain in
good condition, normal wear and tear excepted, (ii) meets and shall
meet all standards imposed by any governmental agency, or department
or division thereof having regulatory authority over such Equipment
and its use and (iii) is currently useable and shall remain useable in
the normal course of Borrower's business.

     5.22.     Investments.  Except as set forth in Schedule 5.22
hereof, Borrower has no Subsidiaries and has no interest in any
partnership or joint venture with, or any investment in, any Person.

     5.23.     Trade Relations.  There exists no actual or, to the
best of Borrower's knowledge, threatened termination, cancellation or
limitation of, or any modification or change in, the business
relationship of Borrower or any Subsidiary with any supplier or with
any company whose contracts with Borrower or a Subsidiary,
individually or in the aggregate are material to the operations of
Borrower or a Subsidiary; after the consummation of the transactions
contemplated by this Agreement and to the best knowledge of Borrower,
all such companies and suppliers will continue a business relationship
with Borrower and the Subsidiaries on a basis materially no less
favorable to Borrower than that heretofore conducted; and there exists
no condition or state of facts or circumstances which would have a
Material Adverse Effect on Borrower or any Subsidiary or prevent
Borrower or any Subsidiary from conducting its business after the
consummation of the transactions contemplated by this Agreement in
essentially the same manner in which it has heretofore been conducted.

     5.24.     Registration Statement.  No portion of any
registration statement filed with the Securities and Exchange
Commission or the prospectus relating thereto, or any other written
material filed with said commission relating to the Borrower or its
business, does or will contain any statement which is false or
misleading with respect to any fact, or does or will omit to state a
fact necessary in order to make the statements therein not false or
misleading or otherwise violate any state or federal securities laws.

     5.25.     Survival of Representations and Warranties.  All
representations and warranties by Borrower and Guarantor herein shall
survive delivery of the Note and the making of the Advances hereunder
and any investigation at any time made by or on behalf of Lender or
the Participants shall not diminish Lender's right to rely on such
representations and warranties.

     5.26.     No Financing of Corporate Takeovers.  No proceeds of
the Line of Credit or any other Advance under the terms of this
Agreement will be used to acquire any security in any transaction
which is subject to  13 or 14 of the Securities Exchange Act of
1934, including particularly (without limitation) 13(d) and 14(d)
thereof.

     5.27.     Chief Executive Office; Collateral Locations. 
Borrower's chief executive office and office where it keeps all of its
books and records is located at 110 S. Texas St., Pittsburg, Texas
75686 and except as set forth on Schedule 5.27 attached hereto,
Borrower has not had any other chief executive office or principal
place of business outside the state of Texas during the four (4)
months preceding the Closing Date.  Schedule 5.27 attached hereto and
incorporated herein by reference sets forth a true, correct and
complete list of all places of business and all locations at which
Collateral is located.

     5.28.     Casualties.  Neither the business nor the properties
of Borrower or any Subsidiary are affected by any Hazardous Substance,
strike, lockout or other labor dispute, embargo or other casualty
(whether or not covered by insurance), which could have a Material
Adverse Effect.

     5.29.     Hazardous Substances.  The Collateral is free from
"Hazardous Substances" and no portion of the Land is subject to
federal, state or local regulation or liability because of the
presence of stored, leaked or spilled petroleum products, waste
materials or debris, "PCB's" or PCB items (as defined in 40 C.F.R.
761.3), underground storage tanks, "asbestos" (as defined in 40
C.F.R. 763.63) or the past or present accumulation, spillage, release
or leakage of any such substance, except as specifically set forth on
Schedule 5.29 attached hereto.

     5.30.     Use of Proceeds; Margin Stock.  The proceeds of the
Line of Credit will be used by Borrower for general corporate
purposes.  None of such proceeds will be used for the purpose of
purchasing or carrying any "margin stock" or "margin security" as
those terms are used or defined in the Securities Exchange Act of 1934
(specifically U.S.C. 78(d)) or the regulations issued pursuant
thereto, or for the purpose of reducing or retiring any Indebtedness
which was originally incurred to purchase or carry any "margin stock". 
Borrower is not engaged in the business of extending credit for the
purpose of purchasing or carrying margin stocks or margin securities. 
Neither Borrower nor any Person acting on behalf of Borrower has taken
or will take any action which might cause the Note or any of the other
Loan Documents, including this Agreement, to violate Section 8 of the
Securities Exchange Act of 1934 or any rule or regulation thereunder,
as such is now in effect or as same may hereafter be in effect. 
Borrower and the Subsidiaries, on a consolidated basis, own no "margin
stock" or "margin security" except for that described in the financial
statements referred to in Section 5.04 hereof, the aggregate value of
all such "margin stock" and "margin security" owned by Borrower and
the Subsidiaries, when consolidated does not exceed twenty five
percent (25%) of the value of all of Borrower's and Subsidiary's
assets.


ARTICLE VI.  NEGATIVE COVENANTS

     Borrower and Guarantor covenant with Lender that from and
after the date hereof and until the termination of this Agreement and
the payment and satisfaction in full of the Obligations they will not,
and they will not permit any Subsidiary to, without the prior written
consent of Lender:

     6.01.     Borrowing Limit.  Exceed the Loan Limit.

     6.02.     No Encumbrances.  Create, assume or suffer to exist a
Lien of any kind on any of the Collateral except for Permitted Liens. 
No easements, rights of way, restrictions or other similar
encumbrances which, in the aggregate or separately, interfere with the
occupation, use, and enjoyment by Borrower of any portion of the
Collateral or which materially impairs the value of any portion of the
Collateral, shall be created, assumed or suffered to exist.

     6.03.     Asset Sales.

          (a) Sell, lease or dispose of any of the Collateral or
     any interest therein.  Provided, however, that Borrower may
     sell Equipment which is no longer used or useful in the
     business of Borrower or any Subsidiary, if (i) such Equipment
     has a Market Value of less than $1,000,000.00, (ii) all
     Equipment sold or to be sold within any Fiscal Year has an
     aggregate Market Value of less than $5,000,000.00, (iii)  any
     Equipment sold or otherwise disposed of pursuant to this
     clause is replaced within ninety (90) days after such sale or
     other disposition by replacement Equipment which is in good
     operating condition and which has a value and utility at least
     equal to that of the Equipment sold or disposed of and the
     Lender receives, for the benefit of Lender, a valid,
     perfected, first Lien with respect to such replacement
     Equipment, subject only to Permitted Liens, and (iv) all
     proceeds received from the sale or other disposition of the
     Equipment are delivered to Lender.

          (b) Sell, lease or otherwise transfer any assets other
     than the Collateral, except: (i) in the ordinary course of
     business; (ii) as permitted by Section 6.10 hereof; (iii)
     transfers to the Borrower or a Subsidiary; (iv) worn or
     obsolete property; or (v) any other sale or transfer of
     assets, which, together with all other assets sold or
     transferred during the preceding twelve month period (other
     than in accordance with the preceding causes (i), (ii), (iii)
     and (iv)) does not exceed fifteen percent (15%) of the Fair
     Value of Borrower's total consolidated assets (excluding
     Intangible Assets), whether such assets are now owned or
     hereafter acquired, and as computed at the time of such sale
     or transfer.

     6.04.     Corporate Structure; Liquidation; Mergers;
Consolidations; and Dispositions of Substantial Assets.  Dissolve or
otherwise terminate its corporate status; enter into any merger,
reorganization or consolidation; issue any shares of any class of
capital stock of any Subsidiary or any securities or other instruments
which are convertible into any shares of any class of capital stock of
any Subsidiary; make any substantial change in the basic type of
business conducted by Borrower or any Subsidiary as of the date
hereof; dissolve Borrower or any Subsidiary; liquidate Borrower or any
Subsidiary; become a party to any merger or consolidation (except as
expressly permitted in this Section); acquire by purchase, lease or
otherwise, all or substantially all of the assets or capital stock of
any Person; sell, transfer, lease or otherwise dispose of all or any
substantial part of Borrower's or any Subsidiary's property, assets or
business.  Provided, however, that the foregoing shall not operate to
prevent:

          (a)  mergers or consolidations of any Subsidiary into
     Borrower or a sale, transfer or lease of assets by any
     Subsidiary to Borrower; or

          (b)  a merger of any Person into Borrower if (i)
     Borrower shall be the surviving or continuing corporation,
     (ii) after giving effect to such merger or consolidation
     Borrower shall be in full compliance with this Agreement,
     (iii) the management of Borrower shall be substantially
     unchanged and, (iv) the merger or consolidation does not
     involve, concern or transfer all or a substantial part of the
     property and assets of Borrower and its Subsidiaries.  For
     this purpose the term "substantial part" shall mean more than
     fifteen percent (15%) of such property compared to the total
     assets of Borrower and the Subsidiaries.

     6.05.     Fiscal Year.  Change its fiscal year.

     6.06.     ERISA.  Take, or fail to take, or permit any ERISA
Affiliate to take, or fail to take, any action with respect to a Plan
including, but not limited to, (a) establishing any Plan, (b) amending
any Plan, (c) terminating or withdrawing from any Plan, or (d)
incurring an amount of unfunded benefit liabilities, as defined in
Section 4001 (a)(18) of ERISA where such action or failure could have
a Material Adverse Effect on the Borrower or any Subsidiary, result in
a lien on the property of the Borrower or any Subsidiary, or require
the Borrower or any Subsidiary to provide any security.

     6.07.     Relocations: Use of Name.  Relocate its executive
office; maintain any Collateral at any location other than that set
forth on Schedule 5.27 hereto or maintain records with respect to
Collateral at any locations other than at the location of its chief
executive office set forth in Section 5.__ hereto; or use any
corporate name (other than its own) or any fictitious name except upon
thirty (30) days prior written notice to Lender and after the delivery
to Lender of financing statements, if required by Lender, in a form
satisfactory to Lender.

     6.08.     Arm's Length Transactions.  Enter into any
transaction, including without limitation, the purchase, sale, lease
or exchange of any Collateral, or the rendering of any service, with
any Affiliate of the Borrower or any Subsidiary or any Person except
as permitted by Section 6.03 hereof and upon fair and reasonable terms
not materially less favorable to the Borrower than would be obtained
in a comparable arms'-length transaction with a Person not an
Affiliate of the Borrower or such Subsidiary and which would be
subject to approval by the Borrower's Audit Committee of the Board of
Directors.  Provided, however, that Borrower may make those Affiliate
transactions, and continue and increase said Affiliate transactions,
described in Borrower's proxy statement in connection with its
February 1, 1995 annual meeting, which statement is attached hereto as
Schedule 6.08.

     6.09.     Dividends.  Declare or pay any dividends on, or make
any distribution with respect to, its shares of any class of capital
stock, redeem or retire any capital stock, or take any action having
an effect equivalent to the foregoing (in any Fiscal Year of Borrower
or any Subsidiary) except for (a) the declaration and payment of cash
dividends by a Subsidiary and payable to Borrower and (b) the
declaration and payment of cash dividends on the capital stock of the
Borrower not in excess of the greater of (i) $2,300,000.00 in any
Fiscal Year, and (ii) $0.09 per share of the issued and authorized
common stock plus twenty-five percent (25%) of the net income of
Borrower, as set forth in the audited financial statements for the
Fiscal Year of Borrower immediately preceding the year during which
such declaration and payment of dividends is made; provided, however,
that at the time such dividend is paid there does not exist any
Default or Event of Default hereunder or any event or condition which,
with the payment of such dividend would constitute a Default or Event
of Default.

     6.10.     Subordinated Notes.  Take any action, directly or
indirectly to:

          (a)  purchase, redeem, retire or otherwise acquire for
     value, set apart any money for a sinking, defeasance or other
     analogous fund for, the purchase, redemption, retirement or
     other acquisition of, or make any voluntary payment or
     prepayment of the principal of, or interest on, or any other
     amount owing in respect of, the Subordinated Notes other than
     regularly scheduled payments of interest thereon; or
          (b)  agree to any amendment, modification or waiver of
any of the provisions of the  Subordinated Note Indenture.

     6.11.     Other Extraordinary Events.  Take any of the following
actions:
          
          (a)  Purchase or otherwise acquire or become obligated
     for the purchase of all or a substantial part of the assets of
     any Person, not to exceed 15% of the total assets of Borrower,
     except for property acquired as a result of a loan workout or
     liquidation or except as expressly contemplated herein, where
     the purchase, acquisition, or obligation would have a Material
     Adverse Effect on Borrower's financial condition or financial
     condition of any Subsidiary; or; 

          (b)  Materially change its general business purpose or
     take any action with a view towards the same including
     entering into new lines of business (which are materially
     different from, and unrelated to, the lines of business being
     conducted by it on the Closing Date) or change materially the
     nature of the business conducted by it from those being
     conducted by it on the Closing Date.

     6.12.     No Amendments.  Amend or modify Borrower's charter,
articles of incorporation or by-laws. 

     6.13.     Issuance of Shares.  Issue, sell or otherwise dispose
of, any shares of Borrower's capital stock or other securities,
rights, warrants or options to purchase, or acquire any share of
securities, which would have the effect of reducing the capital stock
of Borrower owned by Lonnie "Bo" Pilgrim to less than 51% of the total
issued and outstanding shares of voting capital stock of the Borrower.


ARTICLE VII.  FINANCIAL COVENANTS

     Borrower and Guarantor covenant with the Lender that from and
after the Closing Date and until the termination of this Agreement and
the payment and satisfaction in full of the Obligations, unless the
Lender otherwise consents in writing:

     7.01 Leverage Ratio.  Borrower shall not permit its
Leverage Ratio at the end of any Fiscal Quarter to exceed 0.675: 1.00.

     7.02.     Tangible Net Worth.  Borrower shall maintain a
Tangible Net Worth at all times during each period specified below of
not less than the amount specified below for such period:

     (a)  For the period from the Closing Date through the next to
     last day of Fiscal Year 1995, $100,000,000;
     
     (b)  For the period from the last day of Fiscal Year 1995 to
     the next to last day of said Fiscal Year, $100,000,000.00,
     plus 25% of Borrower's consolidated net income (but not less
     than zero) for Borrower's Fiscal Year 1995; and

     (c)  For the successive periods commencing on the last day of
     each Fiscal Year thereafter and ending on the next to last day
     of the next succeeding Fiscal Year, with the first such period
     commencing on the last day of Fiscal Year 1996, an amount
     equal to the minimum required Tangible Net Worth in effect
     under this Section 7.02 during the immediately preceding
     period plus 25% of Borrower's consolidated net income (but not
     less than zero) for Borrower's Fiscal Year ending on the date
     the applicable period commences.

     7.03.     Current Ratio.  Borrower shall maintain at all times
and as of the last day of each Fiscal Quarter, a Current Ratio of not
less than 1.40 to 1.00.

     7.04.     Fixed Charge Coverage Ratio.  Borrower shall not, on
the last day of any Fiscal Quarter, permit its Fixed Charge Coverage
Ratio to be less than 1.35 to 1.00 for the period of the last eight
consecutive Fiscal Quarters of Borrower ending on such day.

     7.05.     Minimum Working Capital.  Borrower shall maintain at
all times Working Capital as of  the end of each Fiscal Quarter in an
amount equal to or greater than $50,000,000.00. 


ARTICLE VIII.  AFFIRMATIVE COVENANTS

     Borrower and Guarantor covenant and agree that until all of
the Obligations have been paid in full and this Agreement has been
terminated, Borrower and Guarantor shall comply, and shall cause each
Subsidiary to comply, with all of the following provisions, unless
Lender otherwise gives its prior written consent:

     8.01.     Records Respecting Collateral.  Keep all records with
respect to the Collateral at its office set forth in Section 5.27
hereof and not remove such records from such address without the prior
written consent of Lender.

     8.02 Reporting Requirements. Furnish or cause to be
furnished to Lender and each Bank:

          (a)  As soon as practicable, and in any event within
     45 days after the end of each Fiscal Quarter, consolidated
     interim unaudited financial statements, including a balance
     sheet, income statement and statement of cash flow, for the
     Fiscal Quarter and year-to-date period then ended, prepared in
     accordance with GAAP, consistent with the past practice for
     Borrower and its Subsidiaries, and certified as to truth and
     accuracy thereof by the chief financial officer of Borrower;
     
          (b)  As soon as available, and in any event within 90
     days after the end of each Fiscal Year, consolidated audited
     annual financial statements, including a consolidated balance
     sheet, consolidated statement of income, consolidated
     statement of shareholders' equity and consolidated statement
     of cash flow for the Fiscal Year then ended, prepared in
     accordance with GAAP, in comparative form and accompanied by
     the unqualified opinion and certification of a nationally
     recognized firm of independent certified public accountants
     regularly retained by Borrower and its Subsidiaries and
     acceptable to Lender;
     
          (c)  As soon as available, and in any event within 90
     days after the end of each calendar year, annual financial
     statements of Guarantor, in a form acceptable to Lender;

          (d)  Together with the annual financial statements
     referred to in clause (b) above a statement from such
     independent certified public accountants that, in making their
     examination of such financial statements, they obtained no
     knowledge of any Default or Event of Default or, in lieu
     thereof, a statement specifying the nature and period of
     existence of any such Default of Event or Default disclosed by
     their examination;
     
          (e)  Together with the annual or interim financial
     statements referred to in clauses (a) and (b) above, a
     certificate of the chief financial officer of Borrower
     certifying that, to the best of his knowledge, no Default or
     Event of Default has occurred and is continuing or, if a
     Default or Event of Default has occurred and is continuing, a
     statement as to the nature thereof and the action which is
     proposed to be taken with respect thereto;
     
          (f)  Promptly after the sending or filing thereof, as
     the case may be, copies of any definitive proxy statements,
     financial statements or reports which Borrower or any
     Subsidiary sends to its shareholders and copies of any regular
     periodic and special reports or registration statements which
     Borrower or any Subsidiary files with the Securities and
     Exchange Commission (or any governmental agency substituted
     therefor), including, but not limited to, all Form 10-K and
     Form 10-Q reports, or any report or registration statement
     which Borrower or any Subsidiary files with any national
     securities exchange;
     
          (g)  At least fifteen (15) Business Days prior to the
     time any consent by Lender will be necessary, Borrower and any
     Subsidiary shall furnish to Lender all pertinent information
     regarding any proposed acquisition by Borrower or any
     Subsidiary to which the consent of Lender is required
     hereunder which is reasonably necessary or appropriate to
     permit Lender to evaluate such acquisitions in a manner
     consistent with prudent lending standards;
     
          (h)  Together with the annual and interim financial
     statements referred to in clauses (a) and (b) above, and if
     requested by Lender, a certificate of the chief financial
     officer of Borrower certifying  (i) the items of Equipment
     subject to purchase money Liens permitted by clause (e) of the
     definition of "Permitted Liens" and (ii) the principal amount
     of Indebtedness secured by each such Lien; and
     
          (i)  Such other information respecting the condition
     or operations, financial or otherwise, of Borrower, Guarantor,
     and the Subsidiaries as Lender may from time-to-time
     reasonably request.
     
     8.03.     Tax Returns.  File all federal, state and local tax
returns and other reports that Borrower, Guarantor, and the
Subsidiaries are required by law to file; maintain adequate reserves
for the payment of all taxes, assessments, governmental charges and
levies imposed upon them, their respective incomes, or their
respective profits, or upon any property belonging to them; and pay
and discharge all such taxes, assessments, governmental charges and
levies prior to the date on which penalties attach thereto.

     8.04.     Compliance with Laws.  Comply with all laws, statutes,
rules, regulations and ordinances of any governmental entity, or of
any agency thereof, applicable to Borrower, Guarantor, or any
Subsidiary, a violation of which, in any respect, might have a
Material Adverse Effect, including, without limitation, any such laws,
statutes, rules, regulations or ordinances regarding the collection,
payment, and deposit of employees' income, unemployment, Social
Security taxes and with respect to pension liabilities.

     8.05.     ERISA.

          (a)  At all times make prompt payment of contributions
     required to meet the minimum funding standards set forth in
     Section 302 and 305 of ERISA with respect to each Plan and
     otherwise comply with ERISA and all rules and regulations
     promulgated thereunder in all material respect;
     
          (b)  Promptly after the occurrence thereof with
     respect to any Plan, or any trust established thereunder,
     notify Lender of (i) a "reportable event" described in Section
     4043 of ERISA and the regulations issued from time-to-time
     thereunder (other than a "reportable event" not subject to the
     provisions of 30-day notice to the PBGC under such
     regulations), or (ii) any other event which could subject the
     Borrower, any of its Subsidiaries or any ERISA Affiliate to
     any tax, penalty or liability under Title I or Title IV of
     ERISA or Chapter 43 of the Internal Revenue Code which, in the
     aggregate, would have a Material Adverse Effect on the
     Borrower, any of its Subsidiaries or upon their respective
     financial condition, assets, business operations, liabilities
     or property;
     
          (c)  At the same time and in the same manner as such
     notice or application must be provided to the PBGC, or to the
     Plan participant, beneficiary or alternative payee, give
     Lender any notice or application required or permitted under
     Section 101(d), 302(f)(4), 303, 307, 4041(b)(1)(A) or
     4041(c)(1)(A) of ERISA or under Section 401(a)(29) or 412 of
     the Internal Revenue Code with respect to any Plan;
     
          (d)  Furnish to Lender promptly upon the request of
     Lender (i) true and complete copes of any and all documents,
     government reports and determination or opinion letters for
     any Plan; and (ii) a current statement of withdrawal
     liability, if any, for each Multiemployer Plan; and
     
          (e)  Furnish to Lender, promptly upon the request of
     the Lender therefor, such additional information concerning
     any Plan that relates to the ability to make any payments
     hereunder, as may be reasonably requested.

     8.06.     Books and Records.  Keep adequate records and books of
account with respect to its business activities in which proper
entries are made in accordance with GAAP reflecting all its financial
transactions.

     8.07.     Notifications to Lender.  Notify Lender by telephone
within one (1) Business Day (with each such notice to be confirmed in
writing within two (2) Business Days following such telephone notice):
(a) upon Borrower's learning thereof, of any litigation affecting
Borrower or any or its Subsidiaries claiming damages of $5,000,000 or
more, individually, or when aggregated with other litigation pending
against Borrower or any of its Subsidiaries, if not covered by
insurance, and of the threat or institution of any suit or
administrative proceeding against Borrower or any of its Subsidiaries
which may have a Material Adverse Effect on Borrower or any of its
Subsidiaries, or Lender's Lien in the Collateral, and establish such
reasonable reserves with respect thereto as Lender may request; (b)
upon learning thereof, of any Possible Default or Event of Default
hereunder; (c) upon occurrence thereof, of any change to the
operations, financial condition or business or Borrower or any of its
Subsidiaries which would have a Material Adverse Effect; (d) upon the
occurrence thereof, of any amendment or modification of the Working
Capital Credit Agreement and/or the Creditanstalt Agreement; and (e)
upon the occurrence thereof, of Borrower's or any Subsidiary's default
under (i) any note, indenture, loan agreement, mortgage, lease, deed
or other similar agreement relating to any indebtedness of Borrower or
any of its Subsidiaries or (ii) any other instrument, document or
agreement material to the operations or condition, financial or
otherwise, of Borrower or any of its Subsidiaries to which Borrower or
any of its Subsidiaries is a party or by which Borrower or any of its
Subsidiaries or any of their respective property is bound.

     8.08.     Insurance.

          (a) Keep all the Collateral, whether now owned or
     hereafter acquired, insured by insurance companies (i)
     reasonably acceptable to Lender or having an A or better
     rating according to Best's Insurance Reports; Property-Casualty and 
     (ii) licensed to do business in the State of
     Texas, against loss or damage by fire or other risk usually
     insured against under extended coverage endorsements and
     theft, burglary, and pilferage, together with such other
     hazards that Lender may from time to time reasonably request,
     in amounts reasonably satisfactory to Lender and naming Lender
     as loss payee thereon pursuant to a lender's loss payee clause
     satisfactory to Lender;
     
          (b)  Keep all of its property other than the
     Collateral, whether now owned or hereafter acquired, insured
     by insurance companies (i) reasonably acceptable to Lender or
     having an A or better rating according to Best's Insurance
     Reports; Property-Casualty and (ii) licensed to do business in
     the State of Texas and in all jurisdictions in which such
     Borrower does business against such risks and in such amounts
     as are customarily maintained by others in similar businesses,
     provided, however, that Borrower may self insure with respect
     to any such casualties, risks or losses with respect to
     property other than the Collateral if borrower can reasonably
     satisfy Lender that Borrower is able to self insure for same;

          (c)  Maintain at all times liability insurance
     coverage against such risks and in such amounts as are
     customarily maintained by others in similar businesses, such
     insurance to be carried by insurance companies (i) reasonably
     acceptable to Lender or having an A or better rating according
     to Best's Insurance Reports; Property-Casualty and (ii)
     licensed to do business in the state of Texas and in all
     jurisdictions in which such Borrower does business, provided,
     however, that Borrower may self insure against any such
     liability risks if Borrower is able to reasonably satisfy
     Lender that it is capable of self insuring against such risks;
     and

          (d)  Deliver certificates of insurance for such policy
     or policies to Lender containing endorsements, in form
     satisfactory to Lender, providing that the insurance shall not
     be cancelable, except upon thirty (30) days' prior written
     notice to Lender.

     8.09.     Preservation of Corporate Existence.  Preserve and
maintain its corporate existence, rights, franchises and privileges in
the jurisdiction of its incorporation.

     8.10.     Equipment.  Keep and maintain the Equipment in good
operating condition, reasonable wear and tear excepted; repair and
make all necessary replacements thereof so that the operating
efficiency thereof shall at all times be maintained and preserved; and
shall not permit any item of Equipment to become a fixture to real
estate or accession to other personal property unless Lender has a
first priority Lien on or in such real estate or other personal
property.  Borrower shall, upon Lender's reasonable written demand,
and within ten (10) days of such demand, made in compliance with the
terms of this Agreement,  deliver to Lender, any and all evidence of
ownership of any of the Equipment. 
 
     8.11.     Preservation of Collateral.  Keep and maintain the
Collateral in good operating condition, reasonable wear and tear
excepted; and repair and make all necessary replacements thereof so
that the operating efficiency thereof shall at all times be maintained
and preserved.

     8.12.     Repayment.  Repay the Obligations to Lender as and
when same becomes or is declared due pursuant to the terms of this
Agreement.

     8.13.     Conduct of Business.  Keep all property (real or
personal) free from contamination by any Hazardous Substance that
could subject the property to remedial obligations under any
Environmental Laws or otherwise violate such laws.

     8.14.     Examination.  Allow such examinations and audits as
may reasonably be required by Lender.  Borrower shall permit Lender
(and any Participant accompanied by a representative of Lender) to
make, from time-to-time, examinations and audits of Borrower's
records, books, and accounts and inspect, examine or conduct such
reviews as Lender may reasonably wish to make.  All examination,
audits or reviews shall be conducted during Borrower's regular
business hours.

     8.15.     Good Title to Collateral.  Maintain and preserve good
title to all Collateral, subject only to the Permitted Liens.

     8.16.     Take Actions to Create Security Interests and Liens. 
Take, or cause to be taken, all actions reasonably required by Lender
in order to create, perfect, and continue Liens in the Collateral
including, but not limited to, executing, delivering and filing any
financial statement, security agreement, pledge or other documents as
may be reasonably requested by Lender.  Borrower shall do all such
additional and further acts, give such assurances, and execute such
statements as Lender may request to vest in Lender its rights under
this Agreement, the Note, and all Loan Documents.

     8.17.     Compliance with Loan Documents.  Promptly comply with
any and all covenants of the Loan Documents.

     8.18.     Authorizations and Approvals.  Promptly obtain, from
time-to-time, at its own expense, all such governmental licenses,
authorizations, consents, permits and approvals as may be required to
enable it to comply with its obligations hereunder and under the Loan
Documents.


ARTICLE IX.  EVENTS OF DEFAULT

     The occurrence of any one or more of the following events will
constitute an Event of Default under this Agreement:

     9.01.     Failure to Pay.  Borrower shall fail to repay the
Obligations or any portion thereof as and when due or declared due
pursuant to the terms of this Agreement.

     9.02.     Failure to Perform Under Financial Covenants. 
Borrower and Guarantor has (a) breached or failed to perform any
financial covenant contained in Article VII hereof, and (b) has failed
or refused to cure such breach or failure of performance on or before
the earlier to occur of (i) the expiration of thirty (30) calendar
days from the date written notice of such breach or failure is given
to Borrower, or (ii) the date Borrower knew or should have known of
such default.

     9.03.     Failure to Perform Other Obligations.  Borrower and
Guarantor or any Subsidiary shall default in the performance of any of
the covenants or agreements of Borrower or any Subsidiary contained
herein, or in any of the other Loan Documents, other than any failure
to perform under any of the financial covenants contained in Article
VII hereof.

     9.04.     Misrepresentations.  Borrower and Guarantor shall make
any representations or warranties in any of the Loan Documents or in
any certificate or statement furnished at any time hereunder or in
connection with any of the Loan Documents which proves to have been
untrue or misleading in any material respect when made or furnished.

     9.05.     Other Debts.  Borrower, Guarantor, or any Subsidiary
shall default in the payment when due of any Indebtedness under any
guaranty,note, indenture or other agreement relating to or evidencing
Indebtedness having a principal balance of $1,000,000.00 or more,
including, but not limited to, the Subordinated Notes, any
Indebtedness under the Working Capital Credit Agreement and any
Indebtedness under the Creditanstalt Agreement; or any event specified
in any guaranty, note, indenture or other agreement relating to or
evidencing any such Indebtedness shall occur and continue for more
than the period of grace, if any, specified therein; or any such
Indebtedness shall become due before its stated maturity by
acceleration of the maturity thereof; or any such Indebtedness shall
become due by its terms and shall not be promptly paid or extended.

     9.06.     Tax Lien.  A notice of Lien, levy or assessment is
filed of record with respect to all or any of Borrower's or any
Subsidiary's assets by the United States, or any department, agency or
instrumentality thereof, or by any state, county, municipal or other
governmental agency, including, without limitation, the PBGC, which in
the opinion of Lender adversely affects the priority of the Liens
granted to Lender.

     9.07.     ERISA.  The occurrence of any of the following events:
(a) the happening of a Reportable Event with respect to any Plan which
Reportable Event could result in a material liability for Borrower,
any of its Subsidiaries or an ERISA Affiliate or which otherwise could
have a Material Adverse Effect on the financial condition, assets,
business, operations, liabilities or property of Borrower, any of its
Subsidiaries or such ERISA Affiliate; (b) the disqualification or
involuntary termination of a Plan for any reason which could result in
a material liability for Borrower, any of its Subsidiaries or an ERISA
Affiliate or which otherwise could have a Material Adverse Effect on
the financial condition, assets, business, operations, liabilities or
property of Borrower, any of its Subsidiaries or such ERISA Affiliate;
(c) the voluntary termination of any Plan while such Plan has a
funding deficiency (as determined under Section 412 of the Internal
Revenue Code) which could result in a material liability for Borrower,
any of its Subsidiaries or an ERISA Affiliate or which otherwise could
have a Material Adverse Effect on the financial condition, assets,
business, operations, liabilities or property of Borrower, any of its
Subsidiaries or such ERISA Affiliate; (d) the appointment of a trustee
by an appropriate United States district court to administer any such
Plan; (e) the institution of any proceedings by the PBGC to terminate
any such Plan or to appoint a trustee to administer any such Plan; (f)
the failure of Borrower to notify Lender promptly upon receipt by
Borrower or any of its Subsidiaries of any notice of the institution
of any proceeding or other actions which may result in the termination
of any such Plan.

     9.08.     Voluntary Bankruptcy.  Borrower, Guarantor, or any
Subsidiary shall: (a) file a voluntary petition or assignment in
bankruptcy or a voluntary petition or assignment or answer seeking
liquidation, reorganization, arrangement, readjustment of its debts,
or any other relief under the Bankruptcy Code, or under any other act
or law pertaining to insolvency or debtor relief, whether State,
Federal, or foreign, now or hereafter existing; (b) enter into any
agreement indicating consent to, approval of, or acquiescence in, any
such petition or proceeding; (c) apply for or permit the appointment,
by consent or acquiescence, of a receiver, custodian or trustee of
Borrower, Guarantor, or any Subsidiary or for all or a substantial
part of its property; (d) make a general assignment for the benefit of
creditors; or (e) be unable or shall fail to pay its debts generally
as such debts become due, admit in writing its inability or failure to
pay its debts generally as such debts become due, or otherwise become
insolvent.

     9.09.     Involuntary Bankruptcy.  There shall have been filed
against Borrower, Guarantor, or any Subsidiary an involuntary petition
in bankruptcy or seeking liquidation, reorganization, arrangement,
readjustment of its debts or any other relief under the Bankruptcy
code, or under any other act or law pertaining to insolvency or debtor
relief, whether State, Federal or foreign, now or hereafter existing;
Borrower, Guarantor, or any Subsidiary shall suffer or permit the
involuntary appointment of a receiver, custodian or trustee of
Borrower, Guarantor, or any Subsidiary or for all or a substantial
part of its property; or Borrower, Guarantor, or any Subsidiary shall
suffer or permit the issuance of a writ of attachment, execution or
similar process against all or any substantial part of the property of
Borrower, Guarantor, or any Subsidiary.

     9.10.     Suspension of Business.  The suspension of the
transaction of the usual business of the Borrower or of the usual
business of any of its Subsidiaries or the involuntary dissolution of
the Borrower or the involuntary dissolution of any of its
Subsidiaries.

     9.11.     Judgments.  Any judgment, decree or order for the
payment of money which, when aggregated with all other judgments,
decrees or orders for the payment of money pending against Borrower or
any of its Subsidiaries or Guarantor, exceeds the sum of
$2,000,000.00, shall be rendered against Borrower, Guarantor, or any
Subsidiary and remain unsatisfied and in effect for a period of sixty
(60) consecutive days without being vacated, discharged, satisfied,
stayed or bonded pending appeal.

     9.12.     Change in Control.  There occurs a "Change in Control"
as such term is defined on the date hereof in the Subordinated Notes
Indenture.

     9.13.     Failure to Comply with Environmental Laws.  Failure of
Borrower in good faith to substantially comply with the Environmental
Laws lawfully applicable to Borrower, or to correct, or take action
reasonably satisfactory to Lender to correct any material deficiency
or weakness identified in any audit, and such failure shall continue
for a period of thirty calendar days after there shall have been given
to Borrower by Lender a notice specifying such failure and requiring
it to be remedied.


ARTICLE X.  REMEDIES UPON DEFAULT

     Upon the occurrence of any Event of Default, Lender may at its
option, exercise any one or more of the following remedies, in
addition to all other rights and remedies provided by law, or
otherwise provided by this Agreement, or any other Loan Document, all
of which rights and remedies shall be cumulative and not exclusive:

     10.01.    Notice and Request for Cure.  In cases where notice
and an opportunity to cure are not otherwise required under Article IX
of this Agreement, Lender may provide Borrower with written notice of
the existence of the Event of Default with a request for Borrower to
cure, or take action sufficient to cure the Event of Default within a
specified time period.  Except as may be otherwise provided in Article
IX, notice and opportunity to cure shall not be required to establish
the existence of an Event of Default or the right of Lender to
exercise any of the remedies contemplated by this Article X.  Except
as provided in Section 9.02 hereof, Borrower specifically waives any
notice of presentment, notice of intent to accelerate, notice of
default or Possible Default, demand, notice of acceleration, and
notice of protest.

     10.02.    Default Interest Rate.  To the extent authorized by
interest rate policies established by Lender, Lender may charge
Borrower an increased rate of interest until any portion of the
Obligations which is past due is paid or otherwise brought current,
which interest may be applied to the entire Obligations and which
shall not exceed the Default Rate.  Borrower and Guarantor waive any
prior notice of the applicability of the Default Rate.

     10.03.    Reports/Reviews/ Examinations.  Lender may require
Borrower and/or Guarantor to submit such additional reports or other
information as Lender reasonably determines necessary and/or increase
the frequency or broaden the scope of any Lender review or examination
under Sections 3.04 and/or 8.14 hereof.

     10.04.    Action Plan.  Lender may require Borrower to submit to
Lender a plan for corrective action reasonably acceptable to Lender.

     10.05.    Supplemental Loan Agreement.  Lender may, as a
condition to its waiver of an Event of Default, require Borrower to
enter into a new Supplemental Loan Agreement or to amend any existing
Supplemental Loan Agreement containing such terms and conditions as
Lender deems necessary or appropriate.

     10.06.    Payment of Proceeds.  Lender may require Borrower to
pay to Lender immediately upon Borrower's receipt thereof, all
proceeds, payments, and income from all Collateral.

     10.07.    Offset.  Lender may set off against and apply toward
the payment of the Obligations all deposit balances or other property
of Borrower and/or Guarantor held by Lender, if any, or other amounts
owing by Lender to Borrower and/or Guarantor.

     10.08.    Termination and Acceleration of Loan.  Lender may, at
its sole option, (a) suspend or terminate any obligation to Advance
funds under the Line of Credit, and/or (b) accelerate the maturity of
all principal outstanding on the Obligations and accrued interest
thereon, and make demand for immediate payment thereof, without the
necessity of prior recourse to any Collateral.

     10.09.    Take Possession of Equipment.  Lender may (a) enter
upon any place or places where the Equipment is located and kept,
through self-help and without judicial process, without first
obtaining a final judgment or giving Borrower notice and opportunity
for a hearing on the validity of Lender's claim and without any
obligation to pay rent to Borrower, and remove the Equipment therefrom
to the premises of Lender or any agent of Lender for such time as
Lender may desire, in order to effectively collect or liquidate the
Equipment and/or (b) require Borrower to assemble the Equipment and
make it available to Lender at a place to be designated by Lender
which is reasonably convenient to both Borrower and Lender.

     10.10.    Resort to Collateral.  Lender may resort to and
realize upon all or part of the Collateral in such order and manner as
Lender may elect in order to satisfy all or any part of the
Obligations outstanding, either in its own name or in the name of
Borrower as Borrower's attorney-in-fact, and Borrower hereby appoints
Lender as its attorney-in-fact, with full power of substitution, to
take any action in Borrower's name or on its behalf, as Lender may
reasonably deem necessary or appropriate to resort to or realize upon
the Collateral in accordance with this Agreement.  Except where
prohibited by law, such actions shall include, but not be limited to,
actions (a) to sell Collateral at public or private sale, or otherwise
dispose of Collateral, (b) to service, modify, renew, or preserve the
same, and (c) to receive proceeds of Collateral and to apply such
proceeds to the Obligations in such manner as Lender may elect.  If
Lender chooses to realize upon Collateral, Borrower and Guarantor
shall remain liable for any deficiency remaining after application of
proceeds to the Obligations.  Lender shall have the right to purchase
at any sale of Collateral.

     10.11.    Proceed Against Borrower and/or Guarantor.  Lender
may, without the necessity of prior recourse to any Collateral,
proceed directly against Borrower and/or Guarantor to collect the
Obligations and enforce this Agreement.

     10.12.    Appointment of Trustee, Conservator, or Receiver. 
Lender may request the appointment of a trustee, conservator, receiver
or liquidator in accordance with applicable law.

     10.13.    Remedies Under Deed of Trust.  Lender may sell or
otherwise dispose of all or any of the Land or Equipment, in a manner
provided for in the Deed of Trust and exercise all other rights and
remedies available to Lender under the Deed of Trust.

     10.14.    Notice.  Any notice required to be given by Lender of
the sale, lease, other disposition of the Collateral or any other
intended action by Lender, may be given ten (10) days prior to such
proposed action and shall constitute commercially reasonable and fair
notice thereof to Borrower and/or Guarantor.


ARTICLE XI.  FEES, CHARGES, AND EXPENSES

     11.01.    Obligation to Pay.  Borrower and Guarantor agree to
pay the reasonable expenses incurred by Lender in connection with the
following:

          (a)  Any attempt to enforce or protect any rights of
     Lender against Borrower and/or Guarantor under the terms of
     this Agreement following an Event of Default or any attempt to
     defend against any claims or counterclaims by or on behalf of
     Borrower and/or Guarantor in any litigation arising out of
     this Agreement, to the extent that Lender is successful, on
     the merits or otherwise; and/or

          (b)  The inspection, verification, protection,
     preservation, collection, sale, administration, liquidation,
     or other disposition of Collateral following an Event of
     Default; and/or

          (c)  The perfection of any security interest in
     Collateral granted by Borrower to Lender under this Agreement,
     or any Loan Document.

     11.02.    Expenses Included.  As used in this Article, the term
"reasonable expenses" shall include, without limitation, reasonable
fees, charges and expenses for in-house and outside attorneys and
accountants, in-house and outside inspections and appraisals of
Collateral (including environmental audits and appraisals), fees for
in-house or outside title and lien verification, costs of sale
including advertising, repair, and amelioration or abatement of
environmental hazards, recording fees, and court costs.

     11.03.    When Payable.  Borrower shall be obligated to pay
Lender's reasonable expenses upon demand and this obligation shall be
part of the Obligations.


ARTICLE XII.  MISCELLANEOUS

     12.01.    Waivers.  The failure of Lender at any time to require
strict compliance with any provision of this Agreement shall not
affect Lender's continuing right thereafter to require compliance. 
Any suspension or waiver by Lender of an Event of Default shall not
affect any other Event of Default and Lender's remedies with respect
thereto, regardless of when said Event of Default occurs and the
nature of said Event of Default.  Any waiver, suspension, or consent
by Lender with respect to Borrower's compliance with this Agreement
must be in writing signed by Lender and shall be limited to the extent
set forth therein.

     12.02.    Amendments.  Neither this Agreement nor any of the
Loan Documents may be amended except in writing, signed by all parties
to this Agreement.

     12.03.    Assignment.  This Agreement shall bind and inure to
the benefit of Borrower, Guarantor and Lender, and their respective
Affiliates, successors, permitted assigns, heirs and legal
representatives.  Borrower shall not assign, in whole or in part, this
Agreement or any of the rights, duties, or obligations of Borrower
under this Agreement.  Any such assignment or attempted assignment
shall be void and of no effect with respect to Lender.

     12.04.    Execute Other Documents.  Borrower hereby agrees to
execute such other agreements, documents or instruments as reasonably
requested by Lender in connection with this Agreement and to take such
actions as Lender may reasonably deem necessary to carry out the
purposes hereof.

     12.05.    Notices.  All notices and other communications
required or permitted to be given hereunder shall be given in writing
and shall be personally delivered or sent by registered or certified
United States mail return receipt requested, postage prepaid,
addressed as follows (or to such other address as to which any party
to this Agreement shall have given the other parties hereto written
notice):

          If to Lender:
               Stephen R. Ogletree, President
               Agricultural Production Credit Association
               P.O. Box 120010
               Tyler, TX 75712

          If to Borrower:

               Pilgrim's Pride Corporation
               Attn: Cliff Butler, Vice-Chairman of 
               the Board and Chief Financial Officer
               P.O. Box 93
               Pittsburg, TX 75686

          If to Guarantor:

               Lonnie "Bo" Pilgrim and 
               Patty Redding Pilgrim
               P.O. Box 93
               Pittsburg, TX 75686

All notices hereunder shall be deemed given when actually delivered in
person or three (3) Business Days after having been deposited in the
United States mail, in accordance with the foregoing, as applicable.

     12.06.    Severability.  If any part of this Agreement shall be
adjudged invalid or unenforceable, whether in general or in any
particular circumstance, then such partial invalidity or unenforce-
ability shall not cause the remainder of this Agreement to be or to
become invalid or unenforceable, and if a provision hereof is held
invalid or unenforceable in one or more of its applications said
provision shall remain in effect in all valid applications that are
severable from the invalid or unenforceable application(s).  This
Agreement shall be interpreted so as to give effect and validity to
all of the provisions of this Agreement to the fullest extent
permitted by law.

     12.07.    Governing Law and Venue.  Except to the extent that
federal law is applicable, this Agreement and the rights and
obligations of the parties hereunder shall, in all respects, be
governed by and construed in accordance with the laws of the State of
Texas.  Issues with respect to perfection and foreclosure of liens in
Collateral shall be determined in accordance with the laws of the
state where the Collateral is located as of the Closing Date.  Venue
for any action between Lender, Borrower and/or Guarantor shall be in
Smith County, Texas.

     12.08.    Section Headings.  The section headings of this
Agreement are inserted herein solely for convenience of reference and
do not constitute a part of this Agreement and shall not affect the
construction or interpretation of the provisions hereof.

     12.09.    Entire Agreement.  This Agreement, the Note, and the
Loan Documents constitute the entire agreement among the parties
hereto with respect to the subject matter hereof, and supersede all
prior written and oral agreements pertaining hereto.

     12.10.    Construction.  In the event of any inconsistency in
the terms of the Note, or any of the Loan Documents, and this
Agreement, the terms of this Agreement shall control.  Should any
provision of this Agreement require judicial interpretation, the
parties hereto agree that the court interpreting or construing the
same shall not apply a presumption that the terms hereof shall be more
strictly construed against one party by reason of the rule of
construction that a document is to be more strictly construed against
the party who itself or through its agents prepared the same, it being
agreed that Borrower, Guarantor, Lender and their respective agents
have participated in the preparation hereof.

     12.11.    Remittance.  Any remittance in payment of any
Obligations or liability of Borrower to Lender made by check, draft,
or other instrument calling for payment of money shall be received by
Lender subject to final payment in cash or solvent credits.  Any and
every other bank or agency to or through which such a check, draft or
other instrument may be forwarded by Lender to obtain such final
payment, shall be deemed to be the agent of Borrower which hereby
assumes all risks of insolvency, negligence, or default for any reason
of any bank or other agency to or through which the check, draft, or
other instrument may be forwarded by Lender and any loss arising
therefrom shall be borne by Borrower.  Borrower assumes the risk and
expense of insurance on all valuables it sends to Lender.

     12.12.    Regulatory Change.  Lender's performance under any
provision of this Agreement shall be excused for the periods of time
during which such performance is prevented due to any Regulatory
Change.

     12.13.    Time of the Essence.  Time shall be of the essence in
the performance of all of Borrower's obligations under this Agreement,
the Note, the Loan Documents and any related documents as applicable.

     12.14.    Counterparts.  This Agreement may be executed in
several counterparts, each of which shall be regarded as the original
and all of which shall constitute one and the same Agreement.

     12.15.    Attorney-in-Fact.  Borrower hereby appoints as its
attorney-in-fact the president, any vice president, the treasurer, any
assistant vice president or any assistant treasurer of Lender to
endorse in the name of and in behalf of Borrower any instrument,
check, draft or commercial paper that may be delivered to Lender by
Borrower.  This power of attorney shall not be revoked as long as
there exists any Obligations owed by Borrower to Lender.
     
     12.16.    Intellectual Property License.  Lender is hereby
granted a non-exclusive, assignable license or other right to use,
without charge, Borrower's copyrights, patents, patent applications,
designs, rights of use, or any property of a similar nature, whether
owned by Borrower or with respect to which Borrower has rights under
license, sublicense or other agreements (collectively, the
"Intellectual Property Rights"), to the extent such Intellectual
Property Rights are necessary for the proper operation of, or are used
by Borrower in the operation of, the Collateral.  Such license (a) may
only be used in connection with the operation of the Collateral, (b)
shall terminate upon the payment in full of the Obligations, and (c)
shall become perpetual (and shall survive the termination of this
Agreement) upon the transfer of any of the Collateral in foreclosure
of Lender's Liens in such Collateral, whether such foreclosure is by
right of private sale, judicial sale, deed in lieu, retention in
satisfaction of the Obligations or otherwise.  Borrower agrees, at the
request of Lender, to take any and all action sand to execute, deliver
and/or record any and all instruments, documents, licenses or
agreements, as may be necessary or appropriate to confirm the
foregoing license and/or evidence such license in any public record.

     12.17.    Participations.

          (a)  Lender may, in the ordinary course of its lending
     business and in accordance with the Act, at any time sell to
     one or more Participant participating interests in the Note. 
     Borrower agrees that each Participant shall be entitled to the
     indemnity benefits of Sections 2.12 and 12.19 with respect to
     its participation; provided that no Participant shall be
     entitled to receive any greater amount pursuant to such
     Section than Lender would have been entitled to receive if no
     such transfer to the Participant occurred;

          (b)  The sale of a participating interest in the Note
     to a Participant shall operate as an assumption by the
     Participant of the duty and obligation to fund a corresponding
     percentage of the Commitment, thus releasing Lender and all
     other Participants from any duty, liability or obligation to
     fund said percentage of the Commitment;

          (c)  Lender may disclose to any Participant and any
     prospective Participant any and all financial information in
     Lender's possession concerning Borrower, Guarantor and/or the
     Collateral;

          (d)  In the event Lender distributes all or any
     portion of its net earnings to its Borrowers at any time
     during the term of this Loan under a patronage refund program,
     any such distribution to Borrower shall be calculated only on
     that portion of the Note retained by Lender and which is not
     made the subject of any participation.

     12.18.    Expense Reimbursement.  Borrower agrees to reimburse
Lender for all of the Lender's expenses incurred in connection with
the development, preparation, execution, delivery, modification,
regular review and administration of this Agreement, the Note and the
Loan Documents, including audit costs, appraisal costs, the cost of
searches, filings and filing fees, taxes and fees and disbursements of
Lender's attorneys, excluding any and all costs incurred by any
Participant in connection with Section 12.17.

     12.19.    Indemnity.  In addition to any other indemnity
provided for herein, or in the other Loan Documents, Borrower and
Guarantor hereby, jointly and severally, indemnify Lender from and
against any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind or nature whatsoever (including, without limitation, fees
and disbursements of counsel) which may be imposed on, incurred by, or
asserted against Lender in any litigation, proceeding or investigation
instituted or conducted by any governmental agency or instrumentality
or any other Person (other than Borrower or Guarantor) with respect to
(a) any aspect of, (b) any act of negligence related to, (c) any
strict liability related to, (d) any transaction contemplated by or
referred to in, and/or (e) any matter related to, this Agreement or
the other Loan Documents, or the other transactions contemplated
hereby, whether or not Lender is a party thereto, except to the extent
that any of the foregoing arises out of the gross negligence or
willful misconduct of Lender.  Borrower's and Guarantor's obligations
under this Section shall survive the termination of this Agreement and
the repayment of the Note, and shall be triggered immediately when a
third-party claim is asserted and shall apply regardless of whether
any judicial determination of liability is made.

     12.20.    Termination Statements.  Borrower acknowledges and
agrees that it is Borrower's intent that all financing statements
filed hereunder shall remain in full force and effect until this
Agreement shall have been terminated in accordance with the provisions
hereof, even if, at any time or times prior to such termination, no
Obligations shall be outstanding hereunder.  Accordingly, Borrower
waives any right which it may have under Section 9.404 of the Texas
Business and Commerce Code to demand the filing of termination
statements with respect to the Collateral, and agrees that the Lender
shall not be required to send such termination statements to Borrower,
or to file them with any filing office, unless and until this
Agreement shall have been terminated in accordance with its terms and
all Obligations paid in full in immediately available funds.  Upon
such termination and payment in full, Lender shall execute appropriate
termination statements and deliver the same to Borrower.

     12.21.    Non-liability of Lender.  The relationship between
Borrower and Lender is, and shall at all times remain, solely that of
borrower and lender, and Lender neither undertakes nor assumes any
responsibility or duty to Borrower or Guarantor to review, inspect,
supervise, pass judgment upon, or inform Borrower or Guarantor of any
matter in connection with any phase of Borrower's business, operations
or condition, financial or otherwise.  Borrower and Guarantor shall
rely entirely upon their own judgment with respect to such matters,
and any review, inspection, supervision, exercise of judgment, or
information supplied to Borrower by Lender in connection with any such
matters is for the protection of Lender, and neither Borrower nor
Guarantor nor any third party is entitled to rely thereof.

     12.22.    Article 5069-15.01, et seq.  Borrower and Lender
hereby agree that the provisions of Article 5069-15-01 et seq. of the
Revised Civil Statutes of Texas, as amended (regulating certain
revolving credit loans and revolving tri-party accounts) shall not
apply to this Agreement, the Note or the other Loan Documents.

     IN WITNESS WHEREOF, the parties have caused this Agreement to
be duly executed as of the 27th day of March, 1995.

LENDER:

AGRICULTURAL PRODUCTION            
CREDIT ASSOCIATION

Name:  Stephen R. Ogletree              
Title: President

BORROWER:

PILGRIM'S PRIDE CORPORATION

Name:  Lonnie "Bo" Pilgrim
Title: Chief Executive Officer

Name:   Cliff Butler
Title:  Chief Financial Officer

GUARANTORS:


Lonnie "Bo" Pilgrim


Patty Redding Pilgrim





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<COMMON>                                           276
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