GROUND LEASE AGREEMENT

THIS LEASE AGREEMENT (“Lease”) is effective as of the 4 ^th day of Jan., 2006 (the “Effective Date”), by and between Pilgrim’s Pride Corporation (“Lessor”) and Pat Pilgrim d/b/a Pat Pilgrim Farms (“Lessee”).

WHEREAS , Lessor is the record title owner of certain tracts of unimproved land in an aggregate of one-thousand six-hundred seventy nine and one-half (1,679.5) acres situated within the counties of Upshur, Titus and Camp in the State of Texas (as amended by Exhibit C attached below). Such tracts of land shall collectively be referred to as the “Property” hereinafter.

WHEREAS , Lessor desires to lease the Property to Lessee, and Lessee desires to lease the Property from Lessor to improve the Property as Lessee requires, perform services for Lessor and to develop the Property in accordance with the terms of this Lease.

NOW, THEREFORE , in consideration of the covenants, conditions and agreements contained in this Lease, Lessor and Lessee agree to the following terms and conditions:

1. RENT. Rent to be paid by Lessor shall be as described below.

2. LEASED PREMISES. Lessor leases to Lessee and Lessee leases from Lessor for the Lease Term (as defined hereafter), in consideration for payment of the rent, and upon the terms, conditions and provisions set forth herein the Property, improvements thereon, if any (the “Improvements”). The Property and the Improvements are referred to herein collectively as the “Premises, as further described in Exhibits A and B and as amended in the attached Exhibit C attached hereto and incorporated herein by reference.

Lessee has inspected the Premises and accepts its present (as-is) condition unless expressly noted otherwise in this Lease. Neither Lessor nor any agent has made any express or implied warranties as to the condition of the Premises. Lessee must satisfy itself that the Premises are physically suitable to be used as Lessee intends by independently investigating all such matters related to the use of the Premises. Lessee agrees that it is not relying on any warranty or representation made by Lessor, Lessor’s agent or any broker concerning the suitability of the Premises for the Lessee’s use.

Lessor shall deliver possession of the Premises as of the Effective Date hereof.

3. TERM.  

3.1 Lease Term. The term of this Lease (the “Lease Term”) shall be for one (1) year, commencing on January 1, 2006, and ending on December 31, 2006 (“Lease Expiration Date”), unless sooner terminated pursuant to any term or provision hereof.

3.2 Options. Lessee shall have an option to extend the Lease Term for two additional terms of one (1) year each (each an “Extended Term”). Each such option shall be exercised no later than ninety (90) days prior to the last day of the Lease Term or Extended Term by written notice to Lessor. Rent for each Extended Term shall be in an amount as mutually agreed upon by the parties in writing at the commencement of each Extended Term. All other terms and conditions of this Lease shall remain in full force and effect during any Extended Term.

3.3 Definition . As used in this Lease, the word “Option” or “Options” has the following meaning: any right or option to extend the term of this Lease.

3.4 Option(s) Personal. Each Option granted to Lessee in this Lease is personal to Lessee and may not be exercised or be assigned, voluntarily or involuntarily, by or to any person or entity other than Lessee; provided that, Lessee may freely assign, without Lessor’s consent, any Option to any Affiliate (as defined below) of Lessee. “ Affiliate ” means, with respect to any individual, partnership, limited liability company, association, corporation or other entity (each, a “ Person ”), any Person that controls, is controlled by or is under common control with such Person, together with any of its and their respective members, partners, venturers, directors, officers, stockholders, agents, employees and spouses. A Person shall be presumed to have control when it possesses the power, directly or indirectly, to direct, or cause the direction of, the management or policies of another Person, whether through ownership of voting securities, by contract, or otherwise.

3.5 Multiple Options. If Lessee has any multiple options to extend or renew this Lease, a later Option cannot be exercised unless the prior Option to extend or renew this Lease has been so exercised.

3.6 Effect of Default on Options. Lessee shall have no right to exercise an Option, notwithstanding any provision in the grant of Option to the contrary, (i) during the time commencing from the date Lessor gives to Lessee a notice of default pursuant to this Lease and continuing until the default alleged in said notice of default is cured, or (ii) during the period of time commencing on the day after a monetary obligation to Lessor is due from Lessee and unpaid (without any necessity for notice thereof to Lessee) continuing until the obligation is paid, or (iii) at any time after an event of default described in this Lease (without any necessity of Lessor to give notice of such default to Lessee) until such event of default is cured, or (iv) in the event that Lessor has given to Lessee three or more notices of default under this Lease, where a late charge has become payable under this Lease for each of such defaults, whether or not the defaults are cured, during the twelve (12)-month period prior to the time that Lessee intends to exercise such Option.

3.7 Delay in Possession. Notwithstanding said Lease Commencement Date, if for any reason Lessor cannot deliver possession of the Premises to Lessee on said date, Lessor shall not be subject to any liability therefor, nor shall such failure affect the validity of this Lease or the obligations of Lessee hereunder or extend the term hereof, but in such case, Lessee shall not be obligated to pay rent until possession of the Premises is tendered to Lessee; provided further, however, that if Lessor shall not have delivered possession of the Premises within one hundred twenty (120) days from the Lease Commencement Date, Lessee may, at Lessee's option, by notice in writing to Lessor within ten (10) days thereafter, cancel this Lease, in which event the parties shall be discharged from all obligations hereunder and neither party hereto shall have any duty, obligation, responsibility or liability to the other hereunder; provided, however, that if such written notice of Lessee is not received by Lessor within said ten (10) day period, Lessee's right to cancel this Lease hereunder shall terminate and be of no further force or effect.

3.8 Early Possession. If Lessee occupies the Premises prior to said Lease Commencement Date, such occupancy shall be subject to all provisions hereof, such occupancy shall not advance the termination date, and Lessee shall pay rent for such period at the initial monthly rates set forth below.

4. RENT.  

4.1   Rent. Subject to adjustment, if any, Lessee agrees to pay to Lessor, without offset or reduction, payment for the Premises, rent (“Rent”) at the initial rate of $13.00 per acre for a total annual aggregate Rent of $21,833.50. Such Rent shall be required to be paid by Lessee to Lessor in full on or before January 6, 2006. In the event of an increase in Rent for any Extended Term, Lessee shall be required to pay said increased Rent in full on or before the last day of the then existing Lease Term.

4.2   Late Payments . In the event Lessor fails to receive any Rent payment within ten (10) days after the date the same is due, a late payment equal to ten percent (10%) of the annual Rent due to Lessor shall be charged to Lessee

4.3   Additional Consideration . In addition to the payment of Rent, as part of the consideration for this Lease as an additional rent, Lessee covenants and agrees to bear, pay and promptly discharge as they become due and before delinquency all taxes (other than real estate property taxes, which shall borne by Lessor), charges, license fees, or similar extraordinary charges due and payable because of Lessee’s leasehold interest in the Premises. Lessee has the right in good faith to contest such taxes, assessments, license fees or charges and is obligated to pay such contested amount during the contest, plus any penalties and interest imposed if and when the amount is finally determined to be due.

5. NOTICES.  

All notices or correspondence provided for herein shall be effective only if made in writing, personally delivered with an executed acknowledgment of receipt or deposited in the United States mail, certified, postage prepaid, and addressed as follows:

To Lessor:

Pilgrim’s Pride Corporation

4845 Highway 271 North

Pittsburg, TX 75686

Attention: Risk Management

To Lessee:

Pat Pilgrim

1535 Loop 179

Pittsburg, TX 75686

Any notice shall be deemed delivered five (5) days after notice is mailed or, if personally delivered, when acknowledgment of receipt is signed, as provided above. By written notice to the other, either party may change its own mailing address.

6. SALE OF THE PREMISES

6.1 Notice by Lessor of Proposed Sale. If Lessor desires to sell, transfer, assign, or convey any of the Premises (each, a “ Transfer ”), Lessor shall deliver to Lessee notice of its desire to complete such Transfer no less than ninety (90) days prior to the intended sale date. At such time, Lessor will notify Lessee whether such Transfer will also result in an early lease termination date, which may be exercised in its sole discretion or the assumption of the Lease by the new owner. In the event the Lease is to be terminated at Transfer, Lessor will refund to Lessee the prorata portion of the Rent for the remainder of the Lease Term and any and all Options for such Premises will be cancelled.

7. USE.  

7.1 Use. The Premises shall be used and occupied solely and exclusively for Lessee for agricultural purposes to grow and harvest any commodities or crops or hay as determined by Lessee, or such other use which, in Lessor's sole opinion and discretion, is reasonably comparable approved in writing in advance by Lessor and for no other purpose.

7.2 Compliance with Law.  

7.3 Condition of Premises.

8. ALTERATIONS AND ADDITIONS.  

9. INDEMNIFICATION  

9.1 Lessor's Obligation.  Lessor shall indemnify, defend and hold Lessee (and anyone claiming under Lessee), harmless from and against any loss, damage, claim, liability, and cost (including reasonable attorneys’ fees and disbursements) arising from (a) any default, breach or violation by Lessor under this Lease, (b)  any negligent or other tortious act or omission of Lessor, its employees or agents with respect to the Premises, or (c) any conditions or contamination existing prior to the Effective Date at, on or emanating from or onto the Premises. If Lessee recovers from the insurance carried pursuant to this Lease, Lessor is hereby released from this indemnification with respect to such party to the extent of such proceeds.

9.2 Lessee's Obligation. In addition to the indemnification requirements as set forth below in Section 34, Lessee shall indemnify, defend and hold Lessor, its Affiliates, and their respective members, partners, venturers, directors, officers, stockholders, agents, employees, spouses, legal representatives, successors and assigns (collectively, “ Lessor Affiliates ”), harmless from and against any loss, damage, claim, liability, and cost (including reasonable attorneys’ fees and disbursements) arising from (a) any default, breach or violation by Lessee under this Lease, or (b) any negligent or other tortious act or omissions of Lessee, its employees or agents with respect to the Premises.

10. INSURANCE REQUIREMENTS.  

10.1 The Parties agree to maintain in effect insurance coverage with reputable insurance companies covering worker’s compensation and employer liability (or other reasonable equivalent such as excess employer’s indemnity insurance or worker’s compensation) excess insurance, auto liability, commercial general liability, including product liability / completed operations, all with such limits as are sufficient to protect each other from the liabilities insured against by such coverage. Each Party’s insurance described herein shall be primary and not contributory with the other Party’s insurance with respect to obligations resulting from the negligence of each other.

Lessee shall have the following minimum requirements on their Certificate of Insurance.

General Liability

General Aggregate       $2,000,000

Products/Completed Operations     $1,000,000

and/or Professional Liability     $1,000,000 (if applicable)

Each Occurrence       $1,000,000

Automobile Liability

Combined Single Limit      $1,000,000

Workers Compensation      Statutory

Employers’ Liability   

Each Accident       $100,000

Policy Limit        $500,000

Each Employee       $100,000

Pilgrim's Pride Corporation is to be listed as Additional Insured on   General Liability and Auto policies . A 30-day notice of cancellation is also required. Pilgrim's Pride Corporation reserves the right to modify these requirements as deemed necessary for the risk presented to Pilgrim's Pride Corporation.

The certificate holder address should read as follows:

Pilgrim's Pride Corporation

Attn: Risk Management

4845 Highway 271 North

Pittsburg, TX 75686

10.2. Lessee shall also be required to maintain Property, Fire and Extended Coverage Insurance in an amount equal to one hundred percent (100%) of the full replacement value of the Improvements and in an amount sufficient to reimburse Lessee for all of its equipment, trade fixtures, inventory, fixtures and other personal property located on or in the Premises including leasehold improvements hereinafter constructed or installed.

10.3 Exemption of Lessor from Liability. Unless caused by the gross negligence of Lessor, Lessee hereby agrees that Lessor shall not be liable for injury to Lessee's business or any loss of income or profit therefrom or for damage to the goods, wares, merchandise or other property of Lessee, Lessee's employees, invitees, customers, or any other person in or about the Premises, nor shall Lessor be liable for injury to the person of Lessee, Lessee's employees, agents or contractors, as a result of any condition of the Premises or the Building, whether such damage or injury is caused by or results from fire, steam, electricity, gas, water or rain, or from the breakage, leakage, obstruction or other defects of pipes, sprinklers, wires, appliances, plumbing, air conditioning or lighting fixtures, or from any other cause in or about the Premises, whether the said damage or injury results from conditions arising in the Premises or in other portions of the building of which the Premises are a part, or from other sources or places and regardless of whether the cause of such damage or injury or the means of repairing the same is inaccessible to Lessee.

11. DAMAGE OR DESTRUCTION.

11.1 Total Destruction. If at any time during the term of this Lease there is damage, whether or not an insured loss, (including destruction required by any authorized public authority), which totally destroys the Premises, or renders the Premises unfit for the purposes set forth herein, this Lease shall automatically terminate as of the date of such total destruction; provided, that, Lessee shall have the right within ten (10) days after the receipt of such notice to give written notice to Lessor of Lessee's intention to repair such damage at Lessee's expense, without reimbursement from Lessor, in which event this Lease shall continue in full force and effect, and Lessee shall proceed to make such repairs as soon as reasonably possible. If Lessee does not give such notice within such ten (10) day period this Lease shall be canceled and terminated as of the date of the occurrence of such damage.

11.2 Termination, Advance Payments. Upon termination of this Lease pursuant to this paragraph, an equitable adjustment shall be made concerning advance rent and any advance payments made by Lessee to Lessor. Lessor shall, in addition, return to Lessee so much of Lessee's security deposit as has not theretofore been applied by Lessor.

11.3 Waiver. Lessee waives the provisions of any statutes which relate to termination of leases when leased property is destroyed and agree that such event shall be governed by the terms of this Lease.

12. TAXES.  

12.1 Real Property   Taxes. Lessor shall pay prior to delinquency all taxes assessed against and levied upon the Premises; however, with respect to any Property added or Improvements made by Lessee to such Premises after the Effective Date, Lessee alone shall pay such tax. If the right is given to pay any of the taxes, assessments or other impositions which Lessee is herein obligated to pay either in one sum or in installments, Lessee shall pay such accounts in one payment prior to delinquency. In no event, however, shall Lessee be required to pay any franchise, income, inheritance, estate, succession, and transfer or gift taxes imposed upon Lessor, or its successors or assigns.

12.2 Personal Property Taxes. Lessee shall pay prior to delinquency all taxes assessed against and levied upon trade fixtures, furnishings, equipment and all other personal property of Lessee contained in the Premises or elsewhere. Lessee shall cause said trade fixtures, furnishings, equipment and all other personal property to be assessed and billed separately from the real property of Lessor.

13. SERVICES, UTILITIES . Services and utilities shall be furnished and the cost borne by Lessee. If any such services are not separately metered to Lessee, Lessee shall pay a reasonable proportion to be determined by Lessor of all charges jointly metered with other premises. In the event of failure by Lessor to furnish, in a satisfactory manner, any of the services and utilities to the Premises for which Lessor is responsible, if any, Lessee may furnish the same if Lessor has not undertaken to correct such failure within five (5) days after written notice, and, in addition to any other remedy Lessee may have, may deduct the amount thereof, from Monthly Rent.

14. MORTGAGING THE LEASEHOLD ESTATE, ASSIGNMENT AND SUBLETTING.  

141 Limitations of Mortgages . Lessee shall have no right to mortgage his leasehold estate and his interest in the Premises by mortgage or deed of trust. No mortgagee or trustee can acquire any rights in the Premises except as granted to Mortgagor by the Lessor.

14.2 Assignment and Subletting. Lessee shall not voluntarily or by operation of law assign, transfer, mortgage, sublet, or otherwise transfer or encumber all or any part of Lessee's interest in this Lease or in the Premises, without Lessor's prior written consent, which consent may be withheld, delayed or conditioned, in Lessor’s sole determination. Lessor shall respond to Lessee's request for consent hereunder in a timely manner and any attempted assignment, transfer, mortgage, encumbrance or subletting without such consent shall be void, and shall constitute a breach of this Lease.

14.3 No Release of Lessee. Regardless of Lessor's consent, no subletting or assignment shall release Lessee of Lessee's obligation or alter the primary liability of Lessee to pay the Rent and to perform all other obligations to be performed by Lessee hereunder. The acceptance of Rent by Lessor from any other person shall not be deemed to be a waiver by Lessor of any provision hereof. Consent to one assignment or subletting shall not be deemed consent to any subsequent assignment or subletting. In the event of default by any assignee of Lessee or any successor of Lessee, in the performance of any of the terms hereof, Lessor may proceed directly against Lessee without the necessity of exhausting remedies against such assignee. Lessor may consent to subsequent assignments or subletting of this Lease with assignees of Lessee, without notifying Lessee, or any successor of Lessee, and without obtaining its or their consent thereto and such action shall not relieve Lessee of liability under this Lease. Lessor may not consent to subsequent amendments or modifications to this Lease without the prior written consent of Lessee, which consents shall not be unreasonably withheld, delayed or conditioned.

15. DEFAULTS; REMEDIES.  

15.1 Defaults by Lessee. The occurrence of any one or more of the following events shall constitute a material default and breach of this Lease by Lessee: