8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549

CURRENT REPORT

FORM 8-K

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of Earliest Event Reported): October 12, 2005

Cal-Maine Foods, Inc.
(Exact name of registrant as specified in its charter)

Delaware	000-04892	64-0500378
(State or other jurisdiction	(Commission File Number)	(IRS Employer
of incorporation)		Identification No.)

3320 Woodrow Wilson Avenue
Jackson, MS 39207
(Address of principal executive offices (zip code))

601-948-6813
(Registrant’s telephone number, including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2 below):

[   ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

[   ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a — 12)

[   ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d- 2(b))

[   ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13d- 4(c))

Item 2.01 Completion of Acquisition or Disposition of Assets

        On October 12, 2005, Cal-Maine Foods, Inc. (“we” or “our”) completed the acquisition of 51% of the outstanding Membership Interests in Hillandale, LLC (“Hillandale”). Hillandale is a recently formed Florida limited liability company to which most of the assets, liabilities and operations of Hillandale Farms of Florida, Inc. and Hillandale Farms, Inc. (together, “Hillandale Companies”) were transferred.

        Hillandale Companies began operations in Florida over 30 years ago. They have been a major egg production and marketing company in the United States, with a strong market presence in Florida, Georgia and Alabama. During 2004, Hillandale Companies sold approximately 129.3 million dozen eggs produced by its flock of approximately 5.5 million layers at eight production facilities located in Florida and Alabama, including approximately 3.9 million dozen produced under contract arrangements with others. Hillandale is a fully integrated producer with its own feed mills, hatchery, production, processing and distribution facilities.

        We reported our entry into an agreement to form Hillandale and acquire Membership Interests in Hillandale in our Form 8-K Current Report dated July 28, 2005. Hillandale Companies were the initial members of Hillandale for formational purposes, owning 100% of the Membership Interests. They now own 49% of the Membership Interests in Hillandale.

        We purchased our 51% Membership Interest in Hillandale from Hillandale Companies for approximately $27 million. In addition, we paid approximately $19 million of the outstanding debt of Hillandale. Of the total of these amounts, approximately $18 million was funded from our own cash and cash equivalent resources and the balance of approximately $28 million was provided under a Loan Agreement, dated as of October 12, 2005, between us and Hillandale, LLC, and Metropolitan Life Insurance Company (the “Loan Agreement”).

        The Loan Agreement provides for mandatory repayments of principal of $150,000 per month beginning on January 1, 2007, with the unpaid principal balance due on November 1, 2020. The loan is secured by real property and equipment located in Florida, Alabama and Georgia, and bears interest as a base rate of 1.10% per annum over the LIBO Rate, as defined in the Loan Agreement. The Loan Agreement, a copy of which is filed as an exhibit to this Form 8-K Current Report, also contains various other terms and conditions customarily found in such agreements.

        We will purchase the remaining 49% of the Membership Interests in Hillandale in essentially equal annual installments over a period of 48 months following our initial 51% acquisition on October 12, 2005. The purchase price for the remaining Membership Interests will be equal to the then book value of the Units that represent Membership Interests.

Item 9.01 Financial Information and Exhibits

(a) Financial Statements of Business Acquired.

We intend to file Hillandale’s financial statements in a Form 8-K/A not later than 71 calendar days after the date on which this Form 8-K report is filed.

(b) Pro Forma Financial Information.

The Company intends to file pro forma financial information giving effect to the Hillandale acquisition in a Form 8-K/A not later than 71 calendar days after the date on which this Form 8-K report is filed.

(c) Exhibits.

2.2 Operating Agreement, dated October 12, 2005, of Hillandale, LLC, a Florida limited liability company.

99.1 Loan Agreement, dated as of October 12, 2005, among Cal-Maine Foods, Inc. and Hillandale, LLC, and Metropolitan Life Insurance Company.

SIGNATURES

        Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

CAL-MAINE FOODS, INC.
(Registrant)

By: /s/ Fred R. Adams, Jr.
      Fred R. Adams, Jr.
      Chairman of the Board and
      Chief Executive Officer

Dated: October 18, 2005

EX-2.2

Exhibit 2.2

HILLANDALE, LLC

OPERATING AGREEMENT

Effective July 28, 2005

OPERATING AGREEMENT

        THIS OPERATING AGREEMENT is made and entered into as of July 28, 2005 (the “Effective Date”), by and among the undersigned Members who, in consideration of the mutual covenants herein contained, agree as follows:

ARTICLE I

DEFINITIONS

        1.01     Defined Terms. The following terms used in this Agreement shall have the following meanings (unless otherwise expressly provided herein):

            (a)     “Act” shall mean the Florida Limited Liability Company Act as now in effect and as amended or superseded from time to time.

            (b)     “Agreement” shall mean this Operating Agreement as originally executed and as amended from time to time.

            (c)     “As Converted Basis” shall mean, when referring to allocations, prorations or similar calculations with respect to Common Units, the number of Common Units outstanding on the applicable date assuming the conversion of all outstanding convertible securities, provided, however, outstanding warrants, options or other rights to subscribe for or purchase any Membership Interests shall not be taken into account except as may be expressly provided for herein.

            (d)     “Business Day” shall mean any day other than a Saturday, Sunday or other day on which commercial banks in the City of Jackson, Mississippi are authorized or required by law or executive order to close.

            (e)     “Board or Board of Directors” shall mean the group of Directors selected in accordance with Article IV herein and given the authority set forth herein.

            (f)     “Capital Account” as of any given date shall mean the Capital Contribution to the Company by a Member as adjusted up to the date in question pursuant to Article IX.

            (g)     “Capital Contribution” shall mean any contribution to the capital of the Company in cash, property or services by a Member whenever made.

            (h)     “Certificate” shall mean the Articles of Organization of the Company, as filed with the Secretary of State of the State of Florida and as the same may be amended from time to time. (i) “Code” shall mean the Internal Revenue Code of 1986, as amended, or corresponding provisions of subsequent superseding federal revenue laws.

            (j)     “Common Units” shall have the meaning set forth in Section 1.01(v).

            (k)     “Company” shall refer to “Hillandale, LLC.” If “Company” is used in reference to the Code or any Treasury Regulation, then for purposes of applying the Code or Treasury Regulation, “Company” shall be understood to constitute a “partnership.”

            (l)     “Deficit Capital Account” shall mean with respect to any Member, the deficit balance, if any, in such Member’s Capital Account as of the end of the taxable year, after giving effect to the following adjustments: (i) credit to such Capital Account any amount which such Member is obligated to restore under Section 1.704-1(b)(2)(ii)(c) of the Treasury Regulations, as well as any addition thereto pursuant to the next to last sentence of Sections 1.704-2(g)(1) and (i)(5) of the Treasury Regulations, after taking into account thereunder any changes during such year in partnership minimum gain (as determined in accordance with Section 1.704-2(d) of the Treasury Regulations) and in the minimum gain attributable to any partner nonrecourse debt (as determined under Section 1.704-2(i)(3) of the Treasury Regulations); and (ii) debit to such Capital Account the items described in Sections 1.704-1(b)(2)(ii)(d)(4), (5) and (6) of the Treasury Regulations. This definition of Deficit Capital Account is intended to comply with the provision of Treasury Regulations Section 1.704-1(b)(2)(ii)(d) and 1.704-2, and will be interpreted consistently with those provisions.

            (m)     “Distributable Cash” means all cash, revenues and funds received by the Company from Company operations, less the sum of the following to the extent paid or set aside by the Company: (i) all principal and interest payments on indebtedness of the Company and all other sums paid to lenders; (ii) all cash expenditures incurred incident to the normal operation of the Company’s business; (iii) such Reserves as the Directors deem reasonably necessary to the proper operation of the Company’s business.

            (n)     “Economic Interest” shall mean a Member’s or Economic Interest Owner’s share of one or more of the Company’s Net Profits, Net Losses and distributions of the Company’s assets pursuant to this Agreement and the Act, but shall not include any right to participate in the management or affairs of the Company, including, the right to vote on, consent to or otherwise participate in any decision of the Members.

            (o)     “Economic Interest Owner” shall mean the owner of an Economic Interest who is not a Member.

            (p)     “Effective Date” is defined in the preamble of this Agreement.

            (q)     “Entity” shall mean any general partnership, limited partnership, limited liability company, limited liability partnership, corporation, joint venture, trust, business trust, unincorporated entity, cooperative or association or any foreign trust or foreign business organization.

            (r)     “Fiscal Year” shall mean the Company’s fiscal year, which shall end on the last day of December of each year.

            (s)     “Gifting Member” shall mean any Member or Economic Interest Owner who gifts, bequeaths or otherwise transfers for no consideration (by operation of law or otherwise, except with respect to bankruptcy) all or any part of its Membership Interest or Economic Interest.

            (t)     “Majority Interest” shall mean one or more units of voting Membership Interests which taken together exceed fifty percent (50%) of the voting rights of Membership Interests present at any meeting and entitled to vote at which a quorum is present.

            (u)     “Member” shall mean each party who executes a counterpart of this Agreement as a Member and each of the parties who may hereafter become Members. If a Person is a Member immediately prior to the purchase or other acquisition by such Person of an Economic Interest, such Person shall have all the rights of a Member with respect to such purchased or otherwise acquired Membership Interest or Economic Interest, as the case may be. If “Member” is used in reference to the Code or any Treasury Regulation, then for purposes of applying the Code or Treasury Regulation, a “Member” shall be understood to constitute a “partner.”

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            (v)     “Membership Interest” shall mean a Member’s entire interest in the Company including such Member’s Economic Interest and the right to participate in the management of the business and affairs of the Company, including the right to vote on, consent to, or otherwise participate in any decision or action of or by the Members granted pursuant to this Agreement and the Act. Membership Interests shall be denominated in units and the total number of units of Membership Interests which the Company shall have authority to issue is 1,000 units of Common Membership Interests (“Common Units”).

            (w)     “Net Profits” and “Net Losses” shall mean the income, gain, loss, deductions, and credits of the Company in the aggregate or separately stated, as appropriate, determined in accordance with Section 10.05 at the close of each fiscal year.

            (x)     “Person” shall mean any individual or Entity, and the heirs, executors, administrators, legal representatives, successors, and assigns of such “Person” where the context so permits.

            (y)     “Reserves” shall mean, with respect to any fiscal period, funds set aside or amounts allocated during such period to reserves which shall be maintained in amounts deemed sufficient by the Members for working capital and to pay taxes, insurance, debt service, or other costs or expenses incident to the ownership or operation of the Company’s business.

            (z)     “Resigning Member” shall have the meaning set forth in Section 13.01(d).

            (aa)     “Securities Acts” shall have the meaning set forth in Section 16.15.

            (bb)     “Selling Member” shall mean any Member or Economic Interest Owner which sells, assigns, pledges, hypothecates or otherwise transfers for consideration all or any portion of its Membership Interest or Economic Interest.

            (cc)     “Transferring Member” shall collectively mean a Selling Member and a Gifting Member.

            (dd)     “Treasury Regulations” shall include proposed, temporary and final regulations promulgated under the Code in effect as of the date of filing the Certificate and the corresponding sections of any regulations subsequently issued that amend or supersede such regulations.

            (ee)     “Withdrawal Event” shall mean the death, retirement, resignation, expulsion, bankruptcy or dissolution of a Member or occurrence of any other event which constitutes an event of disassociation of a Member as provided in the Act.

            (ff)     “'33 Act” shall have the meaning set forth in Section 8.08(b).

        1.02     Other Definitional Provisions. All definitions contained in this Agreement are equally applicable to the singular and plural forms of the terms defined. The words “hereof”, “herein”, and “hereunder” and words of similar import referring to this Agreement refer to this Agreement as a whole and not to any particular provision of this Agreement. Unless otherwise specified, all Article and Section references pertain to this Agreement. All accounting terms not specifically defined herein shall be construed in accordance with generally accepted accounting principles. Terms used herein that are defined in the Act, unless otherwise defined herein, shall have the meanings specified in the Act.

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ARTICLE II

FORMATION OF COMPANY

        2.01 Formation. On July 28, 2005, James J. Taylor Jr., acting in his capacity as the attorney for the Company, organized the Company as a Florida limited liability company by executing and delivering the Certificate to the Florida Secretary of State in accordance with and pursuant to the Act.

        2.02     Name. The name of the Company is “Hillandale, LLC”. The name of the Company may be amended from time to time by the Directors.

        2.03     Principal Place of Business. The principal place of business of the Company within the State of Florida shall be at 247 Northwest Hillandale Glen, Lake City, Florida 32055. The Company may locate its places of business and registered office at any other place or places as the Directors may from time to time deem advisable.

        2.04     Registered Office and Registered Agent. The registered agent for service of process and the registered office shall be that Person and location reflected in the Certificate as filed in the office of the Secretary of State. The Board of Directors may, from time to time, change the registered agent or office through appropriate filings with the Secretary of State. In the event the registered agent ceases to act as such for any reason or the registered office shall change, the Board of Directors shall promptly designate a replacement registered agent or file a notice of change of address as the case may be.

        2.05     Term. The term of the Company shall begin with the date of filing of the Certificate with the Secretary of State of the State of Florida, and shall continue perpetually, unless the Company is earlier terminated in accordance with either the provisions of this Agreement or the Act.

ARTICLE III

BUSINESS OF COMPANY

        3.01     Permitted Businesses. The business of the Company shall be:

            (a)     To engage in any lawful act or activity for which limited liability companies may be organized under the Act.

            (b)     To exercise all other powers necessary to or reasonably connected with the Company’s business which may be legally exercised by limited liability companies under the Act.

            (c)     To engage in all activities necessary, customary, convenient, or incident to any of the foregoing.

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ARTICLE IV

BOARD OF DIRECTORS

        4.01     General Powers. Except as may otherwise be provided by law, by the Certificate or by this Agreement, the property, affairs and business of the Company shall be managed by or under the direction of the Board of Directors, and the Board of Directors may exercise all the powers of the Company.

        4.02     Number and Term of Office. The number of Directors may be modified from time to time by resolution of the Board of Directors, but in no event shall the number of Directors be less than one. The initial number of Directors constituting the Board of Directors shall be five. Each Director (whenever elected) shall hold office until his successor has been duly elected and qualified, or until his earlier death, resignation or removal.

        4.03     Election of Directors. Except as set forth in the Certificate and as otherwise provided in Sections 4.12 and 4.13 of this Agreement, the Directors shall be elected at each annual meeting of the Members. If the annual meeting for the election of Directors is not held on the date designated therefor, the Directors shall cause the meeting to be held as soon thereafter as convenient but in no event longer than 60 days following the designated date or, if no such date is designated for the applicable year, no longer than 60 days following the anniversary of the last annual meeting date.

        4.04     Annual and Regular Meetings. The annual meeting of the Board of Directors for the purpose of electing officers and for the transaction of such other business as may come before the meeting shall be held as soon as possible following adjournment of the annual meeting of the Members at the place of such annual meeting of the Members. Notice of such annual meeting of the Board of Directors need not be given. The Board of Directors from time to time may by resolution provide for the holding of regular meetings and fix the place (which may be within or without the State of Florida) and the date and hour of such meetings. Notice of regular meetings need not be given, provided, however, that if the Board of Directors shall fix or change the time or place of any regular meeting, notice of such action shall be mailed promptly, or sent by telegram, facsimile or cable, to each Director who shall not have been present at the meeting at which such action was taken, addressed to him at his usual place of business, or shall be delivered to him personally. Notice of such action need not be given to any Director who attends the first regular meeting after such action is taken without protesting the lack of notice to him, prior to or at the commencement of such meeting, or to any Director who submits a signed waiver of notice, whether before or after such meeting.

        4.05     Special Meetings; Notice. Special meetings of the Board of Directors shall be held whenever called by the Chairman of the Board or, in the event of his absence or disability, by the Chief Operating Officer, at such place (within or without the State of Florida), date and hour as may be specified in the respective notices or waivers of notice of such meetings. Special meetings of the Board of Directors may be called on 24 hours’ notice, if notice is given to each Director personally or by telephone or facsimile, or on five days’ notice, if notice is mailed to each Director, addressed to him at his usual place of business. Notice of any special meeting need not be given to any Director who attends such meeting without protesting the lack of notice to him, prior to or at the commencement of such meeting, or to any Director who submits a signed waiver of notice, whether before or after such meeting, and any business may be transacted thereat.

        4.06     Quorum; Voting. At all meetings of the Board of Directors, the presence of Directors representing a majority of the duly elected Directors then on the Board of Directors shall constitute a quorum for the transaction of business. Except as otherwise required by law or the Certificate, a majority vote of the Directors present at any meeting at which a quorum is present shall be the act of the Board of Directors.

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        4.07     Adjournment. By majority vote of the Directors present, whether or not a quorum is present, such Directors may adjourn any meeting of the Board of Directors to another time or place. No notice need be given of any adjourned meeting unless the time and place of the adjourned meeting are not announced at the time of adjournment, in which case notice conforming to the requirements of Section 4.05 shall be given to each Director.

        4.08     Action Without a Meeting. Any action required or permitted to be taken at any meeting of the Board of Directors may be taken without a meeting if all members of the Board of Directors consent thereto in writing, and such writing or writings are filed with the minutes of proceedings of the Board of Directors.

        4.09     Regulations; Manner of Acting. To the extent consistent with applicable law, the Certificate and this Agreement, the Board of Directors may adopt such rules and regulations for the conduct of meetings of the Board of Directors and for the management of the property, affairs and business of the Company as the Board of Directors may deem appropriate. The Directors shall act only as a Board, and the individual Directors shall have no power as such.

        4.10     Action by Telephonic Communications. Members of the Board of Directors may participate in a meeting of the Board of Directors by means of conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other, and participation in a meeting pursuant to this provision shall constitute presence in person at such meeting.

        4.11     Resignation. Any Director may resign at any time by delivering a written notice of resignation, signed by such Director, to the Chairman of the Board, or the Chief Operating Officer. Unless otherwise specified therein, such resignation shall take effect upon delivery.

        4.12     Removal of Directors. Except as set forth in the Certificate, any Director may be removed at any time, either for or without cause, upon the affirmative vote of the holders of outstanding units of Membership Interests of the Company with a majority of voting rights of Members entitled to vote for the election of such Director, cast at an annual meeting or a special meeting of Members called for that purpose. Any vacancy in the Board of Directors caused by any such removal may be filled at such meeting by the Members entitled to vote for the election of the Director so removed. If such Members do not fill such vacancy at such meeting (or in the written instrument effecting such removal, if such removal was effected by consent without a meeting), such vacancy may be filled in the manner provided in Section 4.13 of this Agreement.

        4.13     Vacancies and Newly Created Director Positions. Except as set forth in the Certificate, if any vacancies shall occur in the Board of Directors, by reason of death, resignation, removal or otherwise, or if the authorized number of Directors shall be increased, the Directors then in office shall continue to act, and such vacancies and newly created Director positions may be filled by a majority vote of the Directors then in office, although less than a quorum. A Director elected to fill a vacancy or a newly created Director position shall hold office until his successor has been elected and qualified or until his earlier death, resignation or removal. Any such vacancy or newly created Director position may also be filled at any time by vote of the Members.

        4.14     Compensation. The amount, if any, which each Director shall be entitled to receive as compensation for his services as such shall be fixed from time to time by resolution of the Board of Directors.

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        4.15     Reliance on Accounts and Reports, etc. A member of the Board of Directors, or a member of any Committee designated by the Board of Directors, shall, in the performance of his duties, be fully protected in relying in good faith upon the records of the Company and upon such information, opinions, reports or statements presented to the Company by any of the Company’s officers or employees, or Committees of the Board of Directors, or by any other person as to matters the member reasonably believes are within such other person’s professional or expert competence and who has been selected with reasonable care by or on behalf of the Company, including without limitation independent certified public accountants and appraisers.

ARTICLE V

EXECUTIVE COMMITTEE AND OTHER COMMITTEES

        5.01     How Constituted. The Board of Directors may designate one or more Committees, including an Executive Committee, each such Committee to consist of such number of Directors as from time to time may be fixed by the Board of Directors. The Board of Directors may designate one or more Directors as alternate members of any such Committee, who may replace any absent or disqualified member or members at any meeting of such Committee. In addition, unless the Board of Directors has so designated an alternate member of such Committee, in the absence or disqualification of a member of such Committee, the member or members thereof present at any meeting and not disqualified from voting, whether or not he or they constitute a quorum, may unanimously appoint another member of the Board of Directors to act at the meeting in the place of any such absent or disqualified member. Thereafter, members (and alternate members, if any) of each such Committee may be designated at the annual meeting of the Board of Directors. Any such Committee may be abolished or redesignated from time to time by the Board of Directors. Each member (and each alternate member) of any such Committee (whether designated at an annual meeting of the Board of Directors or to fill a vacancy or otherwise) shall hold office until his successor shall have been designated or until he shall cease to be a Director, or until his earlier death, resignation or removal.

        5.02     Powers. Each Committee shall have and may exercise such powers of the Board of Directors as may be provided by resolution of the Board, provided, that neither the Executive Committee nor any such other Committee shall have the power or authority to:

(i)         approve or adopt, or recommend to the Members, any action or matter expressly required by the Act to be submitted to Members for approval,

(ii)         adopt, amend or repeal any of this Agreement;

(iii)         authorize distributions;

(iv)         fill vacancies on the Board of Directors or on any of its committees;

(v)         approve a plan of merger not requiring Member approval;

(vi)         authorize or approve reacquisition of Membership Units except according to a formula or method prescribed by the Board of Directors; or

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(vii)         authorize or approve the issuance or sale or contract for sale of units, or determine the designation or relative rights, preferences and limitations of a class or series of units, except that the Board of Directors may authorize a committee (or a senior executive officer of the Company) to do so within limits specifically prescribed by the Board of Directors.

        5.03     Quorum; Voting. Except as may be otherwise provided in the resolution creating such Committee, at all meetings of any Committee the presence of members (or alternate members) constituting a majority of the total authorized membership of such Committee shall constitute a quorum for the transaction of business. The act of a majority of the members present at any meeting at which a quorum is present shall be the act of such Committee.

        5.04     Action without a Meeting. Any action required or permitted to be taken at any meeting of any such Committee may be taken without a meeting, if all members of such Committee shall consent to such action in writing and such writing or writings are filed with the minutes of the proceedings of the Committee.

        5.05     Regulations; Manner of Acting. Each such Committee may fix its own rules of procedure and may meet at such place (within or without the State of Florida), at such time and upon such notice, if any, as it shall determine from time to time. Each such Committee shall keep minutes of its proceedings and shall report such proceedings to the Board of Directors at the meeting of the Board of Directors next following any such proceeding. The members of any such Committee shall act only as a Committee, and the individual members of such Committee shall have no power as such.

        5.06     Action by Telephonic Communications. Members of any Committee designated by the Board of Directors may participate in a meeting of such Committee by means of conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other, and participation in a meeting pursuant to this provision shall constitute presence in person at such meeting.

        5.07     Resignation. Any member (and any alternate member) of any Committee may resign at any time by delivering a written notice of resignation, signed by such member, to the Chairman of the Board or the Chief Operating Officer. Unless otherwise specified therein, such resignation shall take effect upon delivery.

        5.08     Removal. Any member (any alternate member) of any Committee may be removed at any time, with or without cause, by resolution adopted by the Board of Directors.

        5.09     Vacancies. If any vacancy shall occur in any Committee, by reason of death, resignation, removal or otherwise, the remaining members (and any alternate members) shall continue to act, and any such vacancy may be filled by the Board of Directors or the remaining members of the Committee as provided in Section 5.01 hereof.

ARTICLE VI

OFFICERS

        6.01     Authority. The Board of Directors shall have the power and authority to delegate to one or more other persons powers to manage or control the business and affairs of the Company, including without limitation the power to delegate to agents and employees of the Company or to delegate by agreement to other persons. By accepting their election to the Board of Directors, each of the Directors shall be deemed to have delegated various powers and authority to the officers of the Company set forth herein and to such other officers as they may elect or appoint (or as appointed by other officers pursuant to delegated authority to do so).

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        6.02     Titles. The officers of the Company shall be chosen by the Board of Directors and shall be a Chief Operating Officer and any other officers the Board of Directors appoint as described below. The Board of Directors may also elect a Chairman of the Board. Any number of offices may be held by the same person. No officer need be a Director of the Company.

        6.03     Election. Unless otherwise determined by the Board of Directors, the officers of the Company shall be elected by the Board of Directors at the annual meeting of the Board of Directors, and shall be elected to hold office until the next succeeding annual meeting of the Board of Directors. In the event of the failure to elect officers at such annual meeting, officers may be elected at any regular or special meeting of the Board of Directors. Each officer shall hold office until his successor has been elected and qualified, or until his earlier death, resignation or removal.

        6.04     Compensation. The compensation of all officers of the Company, if any, shall be fixed by the Board of Directors.

        6.05     Removal and Resignation; Vacancies. Any officer may be removed with or without cause at any time by the Board of Directors. Any officer may resign at any time by delivering a written notice of resignation, signed by such officer, to the Board of Directors. Unless otherwise specified therein, such resignation shall take effect upon delivery. Any vacancy occurring in any office of the Company by death, resignation, removal or otherwise, shall be filled by the Board of Directors.

        6.06     Authority and Duties. The officers of the Company shall have such authority and shall exercise such powers and perform such duties as may be specified in this Agreement, except that in any event each officer shall exercise such powers and perform such duties as may be required by law.

        6.07     The Chairman of the Board. The Chairman of the Board, if one is appointed by the Board of Directors, shall preside at all meetings of the Members and Directors. He shall also perform all duties and exercise all powers usually pertaining to the office of a Chairman of the Board of a corporation. The Chairman of the Board shall perform such other duties and have such other powers as the Board of Directors may from time to time prescribe.

        6.08     The Chief Operating Officer. Subject to the direction of the Board of Directors, the Chief Operating Officer shall perform all duties and exercise all powers usually pertaining to the office of a President of a corporation. In the absence of the Chairman of the Board, the Chief Operating Officer shall preside at all meetings of the Members and Directors. The Chief Operating Officer shall have general supervision and management of the business policy of the Company. He shall have the authority to sign, in the name and on behalf of the Company, checks, orders, contracts, leases, notes, drafts and other documents and instruments in connection with the business of the Company and conveyances of real estate and other documents and instruments to which the seal of the Company is affixed. He shall have the authority to cause the employment or appointment of such employees and agents of the Company as the conduct of the business of the Company may require, to fix their compensation, and to remove or suspend any employee or agent elected or appointed by the Board of Directors. The Chief Operating Officer shall perform such other duties and have such other powers as the Board of Directors may from time to time prescribe.

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        6.09     Additional Officers. The Board of Directors may appoint such other officers and agents as it may deem appropriate, and such other officers and agents shall hold their offices for such terms and shall exercise such powers and perform such duties as may be determined from time to time by the Board of Directors. The Board of Directors from time to time may delegate to any officer or agent the power to appoint subordinate officers or agents and to prescribe their respective rights, terms of office, authorities and duties. Any such officer or agent may remove any such subordinate officer or agent appointed by him, with or without cause.

        6.10     Notice of Employment and Removal of Officers. Absent a written agreement signed by a duly authorized officer of the Company to the contrary, all employment with the Company, including any employment of officers, is “at will.” Election to an office does not itself constitute employment with the Company and does not change the nature of any employment. The employment of officers, like that of all other employees and/or services of officers, may be terminated at any time, with or without cause, and without further obligation.

        6.11     Security. The Board of Directors may direct that the Company secure the fidelity of any or all of its officers or agents by bond or otherwise.

ARTICLE VII

MEMBERS

        7.01     Names and Addresses of Members. The names and addresses of the Members as of the Effective Date and the number of units they own are as set forth on Exhibit A of this Agreement. Additional Members may be added subsequent to the Effective Date in accordance with the terms and conditions of this Agreement.

        7.02     Limitation of Liability. Each Member’s liability shall be limited as set forth in this Agreement, the Act and other applicable law.

        7.03     Company Debt Liability. A Member will not be personally liable for any debts or losses of the Company beyond his respective Capital Contributions and any obligation of the Member under Section 9.01 or 9.02 to make Capital Contributions, except as provided herein by separate written agreement or instrument, or as otherwise required by law.

        7.04     Sale of Assets; Mergers, Consolidations.

            (a)     As a condition to any merger or consolidation of the Company or the sale, lease or exchange of substantially all of the Company’s property and assets, the Board of Directors of the Company shall first adopt a resolution approving the proposed transaction and declaring its advisability. Further, the above transaction shall be submitted to the Members at an annual or special meeting for the purpose of acting on the transaction. Due notice of the time, place and purpose of the meeting together with a copy of the agreement relating to such merger or consolidation or such sale, lease or exchange of substantially all of the Company’s assets, should be mailed to each Member or Economic Interest Owner, whether voting or non-voting, at the Member’s or Economic Interest Owner’s address as it appears on the records of the Company at least five (5) days prior to the date of the meeting. At the meeting, the transaction shall be considered and a vote taken for its approval or rejection. The transaction must be approved by a Majority Interest of the Members entitled to vote thereon.

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            (b)     Notwithstanding the requirements of subsection (a) of this section, unless required by the Certificate, no vote of Members shall be necessary to approve a merger if (i) the Company survives the merger, (ii) the agreement of merger does not amend in any respect, this Agreement, (iii) each unit of Membership Interest of the Company outstanding immediately prior to the effective date of the merger is to be in an identical outstanding or treasury unit of the surviving entity after the effective date of the merger, and (iv) either no Membership Interest and no equity interest are to be issued or delivered under the plan of merger, or the authorized unissued units or the treasury Common Units of the Company to be issued or delivered under the plan of merger plus those initially issuable upon conversion of any equity interest to be issued or delivered under such plan do not exceed twenty percent (20%) of the Common Units of the Company immediately prior to the effective date of the merger.

        7.05     Priority and Return of Capital. Except as may be expressly provided in or pursuant to this Agreement, no Member or Economic Interest Owner shall have priority over any other Member or Economic Interest Owner, either as to the return of Capital Contributions or as to Net Profits, Net Losses or distributions; provided that this Section shall not apply to loans (as distinguished from Capital Contributions) which a Member has made to the Company.

        7.06     Annual Meeting. The annual meeting of the Members of the Company for the election of Directors and for the transaction of such other business as may properly come before such meeting shall be held at such place, either within or without the State of Florida, at 9:00 A.M. on the second Tuesday of each September of each year (or, if such day is a legal holiday, then on the next succeeding business day), or at such other date and hour, as may be fixed from time to time by resolution of the Board of Directors and set forth in the notice or waiver of notice of the meeting.

        7.07     Special Meetings. Special meetings of the Members may be called at any time by the Chairman of the Board (or, in the event of his absence or disability, by the Chief Operating Officer), or by the Board of Directors. A special meeting shall be called by the Chairman of the Board (or, in the event of his absence or disability, by the Chief Operating Officer), immediately upon receipt of a written request therefor by Members holding in the aggregate not less than 10% of the outstanding units of the Company at the time entitled to vote at any meeting of the Members. If such officers or the Board of Directors shall fail to call such meeting within 20 days after receipt of such request, any Member executing such request may call such meeting. Any such special meeting of the Members shall be held at such place, within or without the State of Florida, as shall be specified in the notice or waiver of notice thereof.

        7.08     Notice of Meetings; Waiver. The Chief Operating Officer shall cause written notice of the place, date and hour of each meeting of the Members, and, in the case of a special meeting, the purpose or purposes for which such meeting is called, to be given personally or by mail, not less than ten nor more than 60 days before the date of the meeting, to each Member of record entitled to vote at such meeting. If such notice is mailed, it shall be deemed to have been given to a Member when deposited in the United States mail, postage prepaid, directed to the Member at his address as it appears on the record of Members of the Company, or, if he shall have filed with the Chief Operating Officer a written request that notices to him be mailed to some other address, then directed to him at such other address. Such further notice shall be given as may be required by law.

        Whenever notice is required to be given to Members hereunder, a written waiver, signed by a Member, whether before or after the time stated therein, shall be deemed equivalent to notice. Neither the business to be transacted at, nor the purpose of, any regular or special meeting of the Members need be specified in a written waiver of notice. The attendance of any Member at a meeting of Members shall constitute a waiver of notice of such meeting, except when the Member attends a meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business on the ground that the meeting is not lawfully called or convened.

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        7.09     Quorum. Except as otherwise required by law or by the Certificate, the presence in person or by proxy of the holders of record of a majority of the units of Membership Interests entitled to vote at a meeting of Members shall constitute a quorum for the transaction of business at such meeting.

        7.10     Voting. Except as set forth in this Agreement, if, pursuant to Section 8.05 of this Agreement, a record date has been fixed, every holder of record of units of Membership Interests entitled to vote at a meeting of Members shall be entitled to one vote for each unit of Membership Interest outstanding in his name on the books of the Company at the close of business on such record date. If no record date has been fixed, then every holder of record of units of Membership Interests entitled to vote at a meeting of Members shall be entitled to one vote for each unit standing in his name on the books of the Company at the close of business on the day next preceding the day on which notice of the meeting is given, or, if notice is waived, at the close of business on the day next preceding the day on which the meeting is held. Except as otherwise required by law or by the Certificate, the vote of a majority of the units of Membership Interests represented in person or by proxy at any meeting at which a quorum is present shall be sufficient for the transaction of any business at such meeting.

        7.11     Voting by Ballot. No vote of the Members need be taken by written ballot or conducted by inspectors of election, unless otherwise required by law. Any vote which need not be taken by ballot may be conducted in any manner approved by the meeting.

        7.12     Adjournment. If a quorum is not present at any meeting of the Members, the Members present in person or by proxy shall have the power to adjourn any such meeting from time to time until a quorum is present. Notice of any adjourned meeting of the Members of the Company need not be given if the place, date and hour thereof are announced at the meeting at which the adjournment is taken, provided, however, that if the adjournment is for more than 30 days, or if after the adjournment a new record date for the adjourned meeting is fixed pursuant to Section 8.05 of this Agreement, a notice of the adjourned meeting, conforming to the requirements of Section 7.08 hereof, shall be given to each Member of record entitled to vote at such meeting. At any adjourned meeting at which a quorum is present, any business may be transacted that might have been transacted on the original date of the meeting.

        7.13     Proxies. Any Member entitled to vote at any meeting of the Members or to express consent to or dissent from corporate action without a meeting may, by a written instrument signed by such Member or his attorney-in-fact, authorize another person or persons to vote at any such meeting and express such consent or dissent for him by proxy. No such proxy shall be voted or acted upon after the expiration of three years from the date of such proxy, unless such proxy provides for a longer period. Every proxy shall be revocable at the pleasure of the Member executing it, except in those cases where applicable law provides that a proxy shall be irrevocable. A Member may revoke any proxy which is not irrevocable by attending the meeting and voting in person or by filing an instrument in writing revoking the proxy or by filing another duly executed proxy bearing a later date with the Chief Operating Officer .

        7.14     Organization; Procedure. At every meeting of Members the presiding officer shall be the Chairman of the Board or, in the event of his absence or disability, the Chief Operating Officer or, in the event of his absence or disability, a presiding officer chosen by a majority of the Members present in person or by proxy. The Chief Operating Officer or an appointee of the presiding officer shall act as secretary of the meeting. The order of business and all other matters of procedure at every meeting of Members may be determined by such presiding officer.

        7.15     Consent of Members in Lieu of Meeting. Whenever the vote of the Members at a meeting thereof is required or permitted to be taken for or in connection with any action, such action may be taken without a meeting, without prior notice and without a vote of Members, if the holders of outstanding units of voting Membership Interests having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all units of Membership Interests entitled to vote thereon were present and voted shall consent in writing to such corporate action being taken. Prompt notice of the taking of such action without a meeting by less than unanimous written consent shall be given to those Members who have not so consented in writing.

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        7.16     Telephonic Meetings Permitted. The Members may permit any or all Members to participate in an annual, regular or special meeting by, or conduct such meeting through the use of, any means of communication by which all Members participating may simultaneously hear each other during the meeting. A Member participating in a meeting by this means is deemed to be present in person at the meeting.

ARTICLE VIII

MEMBERSHIP INTEREST

        8.01     Certificates of Units, Uncertificated Units. The Membership Interests of the Company shall be represented by unit certificates, provided that the Board of Directors may provide by resolution that some or all of any or all classes or series of Membership Interests of the Company shall be uncertificated units. Any such resolution shall not apply to units represented by a certificate until each certificate is surrendered to the Company. Notwithstanding the adoption of such a resolution by the Board of Directors, every holder of units of Membership Interests or Economic Interests in the Company represented by certificates and upon request every holder of uncertificated units of Membership Interests or Economic Interests shall be entitled to have a certificate signed by, or in the name of the Company, by the Chairman of the Board, or Chief Operating Officer, representing the number of units of Membership Interests or Economic Interests registered in certificate form. Such certificate shall be in such form as the Board of Directors may determine, to the extent consistent with applicable law, the Certificate and this Agreement.

        8.02     Signatures; Facsimile. All of such signatures on the certificate may be a facsimile, engraved or printed, to the extent permitted by law. In case any officer, transfer agent or registrar who has signed, or whose facsimile signature has been placed upon a certificate shall have ceased to be such officer, transfer agent or registrar before such certificate is issued, it may be issued by the Company with the same effect as if he were such officer, transfer agent or registrar at the date of issue.

        8.03     Lost, Stolen or Destroyed Certificates. The Chief Operating Officer of the Company may cause a new certificate of units of Membership Interests or Economic Interests or uncertificated units of Membership Interests or Economic Interests to be issued in place of any certificate therefor issued by the Company, alleged to have been lost, stolen or destroyed, upon delivery to the Chief Operating Officer of an affidavit of the owner or owners of such certificate, or his or their legal representative setting forth such allegation. The Chief Operating Officer may require the owner or owners of such lost, stolen or destroyed certificate, or his or their legal representative, to give the Company a bond sufficient to indemnify it against any claim that may be made against it on account of the alleged loss, theft or destruction of any such certificate or the issuance of any such new certificate or uncertificated units.

        8.04     Transfer of Units. Upon surrender to the Company or the transfer agent of the Company of a certificate for units of Membership Interests or Economic Interests, duly endorsed or accompanied by appropriate evidence of succession, assignment or authority to transfer, the Company shall issue a new certificate to the person entitled thereto, cancel the old certificate and record the transaction upon its books. Within a reasonable time after the transfer of uncertificated units of Membership Interests or Economic Interests, the Company shall send to the registered owner thereof a written notice containing the information normally required to be set forth or stated on certificates. Subject to the provisions of the Certificate and this Agreement, the Board of Directors may prescribe such additional rules and regulations as it may deem appropriate relating to the issue, transfer and registration of units of Membership Interests or Economic Interests of the Company.

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        8.05     Record Date. In order to determine the Members entitled to notice of or to vote at any meeting of Members or any adjournment thereof, or entitled to express consent to corporate action in writing without a meeting, or entitled to receive payment of any dividend or other distribution or allotment of any rights, or entitled to exercise any rights in respect of any change, conversion or exchange of units of Membership Interests or Economic Interests or for the purpose of any other lawful action, the Board of Directors may fix, in advance, a record date, which shall not be more than 60 nor less than ten days before the date of such meeting, nor more than 60 days prior to any other action. A determination of Members of record entitled to notice of or to vote at a meeting of Members shall apply to any adjournment of the meeting, provided, however, that the Board of Directors may fix a new record date for the adjourned meeting.

        8.06     Registered Members. Prior to due surrender of a certificate for registration of transfer, the Company may treat the registered owner as the person exclusively entitled to receive dividends and other distributions, to vote, to receive notice and otherwise to exercise all the rights and powers of the owner of the units of Membership Interests or Economic Interests represented by such certificate, and the Company shall not be bound to recognize any equitable or legal claim to or interest in such units of Membership Interests or Economic Interests on the part of any other person, whether or not the Company shall have notice of such claim or interest. Whenever any transfer of units of Membership Interests or Economic Interests shall be made for collateral security, and not absolutely, it shall be so expressed in the entry of the transfer if, when the certificates are presented to the Company for transfer or uncertificated units of Membership Interests or Economic Interests are requested to be transferred, both the transferor and transferee request the Company to do so.

        8.07     Transfer Agent and Registrar. The Board of Directors may appoint one or more transfer agents and registrars, and may require all certificates representing units of Membership Interests or Economic Interests to bear the signature of any such transfer agents or registrars.

        8.08     Restrictive Endorsements. Each certificate representing units of Membership Interests or Economic Interests now or hereafter held by a Member or Economic Interest Owner or delivered in substitution or exchange for any of the foregoing certificates shall be stamped with legends in substantially the following form:

            (a)     “The units represented by this Certificate are subject to an Operating Agreement dated as of July 28, 2005, a copy of which is on file at the offices of the Company and will be furnished by the Company to the holder hereof upon written request. Such Operating Agreement provides, among other things, for the granting of certain restrictions on the sale, transfer, pledge, hypothecation or other disposition of the units represented by this Certificate. By acceptance of this Certificate, each holder hereof agrees to be bound by the provisions of such Operating Agreement. The Company reserves the rights to refuse to transfer the units represented by this Certificate unless and until the conditions to transfer set forth in such Operating Agreement have been fulfilled”; and

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            (b)     “The securities represented by this Certificate have been acquired for

        investment and have not been registered under the Securities Act of 1933, as amended (the “'33 Act”), or under any state securities or ‘Blue Sky’ laws. Said securities may not be sold, transferred, assigned, pledged, hypothecated or otherwise disposed of, unless and until registered under the Act and the rules and regulations thereunder and all applicable state securities or ‘Blue Sky’ laws or exempted therefrom under the Act and all applicable state securities or ‘Blue Sky’ laws.”

        Each Member and Economic Interest Owner agrees that he, she or it will deliver all certificates for units of Membership Interests or Economic Interests owned by him, her or it to the Company for the purpose of affixing such legends thereto.

ARTICLE IX

CONTRIBUTIONS TO THE COMPANY AND CAPITAL ACCOUNTS

        9.01     Members’ Capital Contributions. Each existing Member has made such Capital Contributions for such number of units as are set forth on Exhibit A attached hereto.

        9.02     Additional Contributions. Except as referenced in Section 9.01, no Member shall be required to make any Capital Contributions. To the extent approved by the Board of Directors, from time to time, the Members may be permitted to make additional Capital Contributions if and to the extent they so desire, and if the Board of Directors determines that such additional Capital Contributions are necessary or appropriate in connection with the conduct of the Company’s business (including without limitation, expansion or diversification). In such event, the Members shall have the opportunity (but not the obligation) to participate in such additional Capital Contributions on a pro rata basis in accordance with their Common Units on an As Converted Basis.

      9.03     Capital Accounts.

            (a)     A separate Capital Account will be maintained for each Member. Each Member’s Capital Account will be increased by (1) the amount of money contributed by such Member to the Company; (2) the fair market value of property or services contributed by such Member to the Company (net of liabilities secured by such contributed property that the Company is considered to assume or take subject to under Section 752 of the Code); (3) allocations to such Member of Net Profits and Net Losses; and (4) allocations to such Member of income described in Section 705(a)(1)(B) of the Code. Each Member’s Capital Account will be decreased by (1) the amount of money distributed to such Member by the Company; (2) the fair market value of property distributed to such Member by the Company (net of liabilities secured by such distributed property that such Member is considered to assume or take subject to under Section 752 of the Code); (3) allocations to such Member of expenditures described in Section 705(a)(2)(B) of the Code; and (4) allocations to the account of such Member of Company loss and deduction as set forth in such Regulations, taking into account adjustments to reflect book value.

            (b)     If a permitted sale or exchange of a Membership Interest or an Economic Interest in the Company occurs, the Capital Account of the transferor shall become the Capital Account of the transferee to the extent it relates to the transferred Membership Interest or Economic Interest in accordance with Section 1.704-1(b)(2)(iv) of the Treasury Regulations.

            (c)     The manner in which Capital Accounts are to be maintained pursuant to this Section 9.03 is intended to comply with the requirements of Section 704(b) of the Code and the Treasury Regulations promulgated thereunder. If in the opinion of the Company’s accountants the manner in which Capital Accounts are to be maintained pursuant to the preceding provisions of this Section 9.03 should be modified in order to comply with Section 704(b) of the Code and the Treasury Regulations thereunder, then notwithstanding anything to the contrary contained in the preceding provisions of this Section 9.03, the method in which Capital Accounts are maintained shall be so modified; provided, however, that any change in the manner of maintaining Capital Accounts shall not materially alter the economic agreement between or among the Members.

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            (d)     Upon liquidation of the Company (or any Member’s Membership Interest or Economic Interest Owner’s Economic Interest), liquidating distributions will be made pro rata in accordance with the number of Common Units of the Members and Economic Interest Owners. Liquidation proceeds will be paid within sixty (60) days of the end of the taxable year of liquidation (or, if later, within one hundred twenty (120) days after the date of the liquidation.) The Company may offset damages for breach of this Agreement by a Member or Economic Interest Owner whose interest is liquidated (either upon the withdrawal of the Member or the liquidation of the Company) against the amount otherwise distributable to such Member.

        9.04     Withdrawal or Reduction of Members’ Contributions to Capital. A Member shall not receive out of the Company’s property any part of its Capital Contribution until all liabilities of the Company, except liabilities to Members on account of their Capital Contributions, have been paid or there remains property of the Company sufficient to pay them.

ARTICLE X

ALLOCATIONS, INCOME TAX, DISTRIBUTIONS, ELECTIONS AND REPORTS

        10.01     Allocations of Profits and Losses from Operations. The Net Profits and Net Losses of the Company for each fiscal year will be allocated pro rata in accordance with the number of units of Common Units owned by each Member or Economic Interest Owner.

        10.02     Special Allocations to Capital Accounts. Notwithstanding Section 10.01 hereof:

            (a)     No allocations of loss, deduction and/or expenditures described in Section 705(a)(2)(B) of the Code shall be charged to the Capital Accounts of any Member if such allocation would cause such Member to have a Deficit Capital Account. The amount of the loss, deduction and/or Code Section 705(a)(2)(B) expenditure which would have caused a Member to have a Deficit Capital Account shall instead be charged to the Capital Accounts of any Members which would not have a Deficit Capital Account as a result of the allocation, in proportion to their respective Capital Contributions, or, if no such Members exist, then to the Members in accordance with their interests in Company profits pursuant to Section10.01.

            (b)     If any Member unexpectedly receives any adjustments, allocations, or distributions described in Sections 1.704-1(b)(2)(ii)(d)(4),(5), or (6) of the Treasury Regulations, which create or increase a Deficit Capital Account of such Member, then items of Company income and gain (consisting of a pro rata portion of each item of Company income, including gross income, and gain for such year and, if necessary, for subsequent years) shall be specially credited to the Capital Account of such Member in an amount and manner sufficient to eliminate (to the extent required by the Treasury Regulations) the Deficit Capital Account so created as quickly as possible. This Section 10.02(b) is intended to be interpreted to comply with the alternate test for economic effect set forth in Section 1.704-1(b)(2)(ii)(d) of the Treasury Regulations.

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            (c)     If any Member would have a Deficit Capital Account at the end of any Company taxable year which is in excess of the sum of any amount that such Member is obligated to restore to the Company under Treasury Regulations Section 1.704-1(b)(2)(ii)(c) and such Member’s unit of minimum gain as defined in Section 1.704-2(g)(1) of the Treasury Regulations (which is also treated as an obligation to restore in accordance with Section 1.704-1(b)(2)(ii)(d) of the Treasury Regulations), the Capital Account of such Member shall be specially credited with items of Company income (including gross income) and gain in the amount of such excess as quickly as possible.

            (d)        Notwithstanding any other provision of this Section 10.02, if there is a net decrease in the Company’s minimum gain (as defined in Treasury Regulation Section 1.704-2(d)) during a taxable year of the Company, then, the Capital Accounts of each Member shall be allocated items of income (including gross income) and gain for such year (and if necessary for subsequent years) equal to that Member’s unit of the net decrease in the Company’s minimum gain. This Section 10.02(d) is intended to comply with the minimum gain chargeback requirement of Section 1.704-2 of the Treasury Regulations and shall be interpreted consistently therewith. If in any taxable year that the Company has a net decrease in the Company’s minimum gain, the minimum gain chargeback requirement would cause a distortion in the economic arrangement among the Members and it is not expected that the Company will have sufficient other income to correct that distortion, the Members may in their discretion (and shall, if requested to do so by a Member) seek to have the Internal Revenue Service waive the minimum gain chargeback requirement in accordance with Treasury Regulation Section 1.704-2(f)(4).

            (e)     Items of Company loss, deduction and expenditures described in Section 705(a)(2)(B) of the Code which are attributable to any nonrecourse debt of the Company and are characterized as Member nonrecourse deductions under Section 1.704-2(i) of the Treasury Regulations shall be allocated to the Members’ Capital Accounts in accordance with said Section 1.704-2(i) of the Treasury Regulations.

            (f)     Beginning in the first taxable year in which there are allocations of “nonrecourse deductions” (as described in Section 1.704-2(b) of the Treasury Regulations) such deductions shall be allocated to the Members in accordance with, and as a part of, the allocations of Company profit or loss for such period.

            (g);     In accordance with Section 704(c)(1)(A) of the Code and Section 1.704-1(b)(2)(i)(iv) of the Treasury Regulations, if a Member contributes property with a fair market value that differs from its adjusted basis at the time of contribution, income, gain, loss and deductions with respect to the property shall, solely for federal income tax purposes, be allocated among the Members so as to take account of any variation between the adjusted basis of such property to the Company and its fair market value at the time of contribution.

            (h)     Pursuant to Section 704(c)(1)(B) of the Code, if any contributed property is distributed by the Company other than to the contributing Member within five (5) years of being contributed, then, except as provided in Section 704(c)(2) of the Code, the contributing Member shall be treated as recognizing gain or loss from the sale of such property in an amount equal to the gain or loss that would have been allocated to such Member under Section 704(c)(1)(A) of the Code if the property had been sold at its fair market value at the time of the distribution.

            (i)     In the case of any distribution by the Company to a Member or Economic Interest Owner, such Member or Economic Interest Owner shall be treated as recognizing gain in an amount equal to the lesser of:

        (i)     the excess (if any) of (A) the fair market value of the property (other than money) received in the distribution over (B) the adjusted basis of such Member’s Membership Interest or Economic Interest Owner’s Economic Interest in the Company immediately before the distribution reduced (but not below zero) by the amount of money received in the distribution, or

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        (ii)     the Net Precontribution Gain (as defined in Section 737(b) of the Code) of the Member or Economic Interest Owner. The Net Precontribution Gain means the net gain (if any) which would have been recognized by the distributee Member or Economic Interest Owner under Section 704(c)(1)(B) of the Code if all property which (A) had been contributed to the Company within five (5) years of the distribution, and (B) is held by the Company immediately before the distribution, had been distributed by the Company to another Member or Economic Interest Owner. If any portion of the property distributed consists of property which had been contributed by the distributee Member or Economic Interest Owner to the Company, then such property shall not be taken into account under this Section 10.02(i) and shall not be taken into account in determining the amount of the Net Precontribution Gain. If the property distributed consists of an interest in an entity, the preceding sentence shall not apply to the extent that the value of such interest is attributable to the property contributed to such entity after such interest had been contributed to the Company.

            (j)     In connection with a Capital Contribution of money or other property (other than a deminimis amount) by a new or existing Member or Economic Interest Owner as consideration for an Economic Interest or Membership Interest, or in connection with the liquidation of the Company or a distribution of money or other property (other than a deminimis amount) by the Company to a retiring Member or Economic Interest Owner as consideration for an Economic Interest or Membership Interest, the Capital Accounts of the Members shall be adjusted to reflect a revaluation of Company property (including intangible assets) in accordance with Treasury Regulation Section 1.704-1(b)(2)(iv)(f). If under Section 1.704-1(b)(2)(iv)(f) of the Treasury Regulations, Company property that has been revalued is properly reflected in the Capital Accounts and on the books of the Company at a book value that differs from the adjusted tax basis of such property, then depreciation, depletion, amortization and gain or loss with respect to such property shall be united among the Members in a manner that takes account of the variation between the adjusted tax basis of such property and its book value, in the same manner as variations between the adjusted tax basis and fair market value of property contributed to the Company are taken into account in determining the Members’ units of tax items under Section 704(c) of the Code.

            (k)     All recapture of income tax deductions resulting from sale or disposition of Company property shall be allocated to the Member or Members to whom the deduction that gave rise to such recapture was allocated hereunder to the extent that such Member is allocated any gain from the sale or other disposition of such property.

            (l)     Any credit or charge to the Capital Accounts of the Members pursuant to Section10.02 (b), (c), and/or (d) hereof shall be taken into account in computing subsequent allocations of profits and losses pursuant to Section 10.01, so that the net amount of any items charged or credited to Capital Accounts pursuant to Sections 10.01 and 10.02 shall to the extent possible, be equal to the net amount that would have been allocated to the Capital Account of each Member pursuant to the provisions of this Article if the special allocations required by Sections 10.02 (b), (c), and/or (d) hereof had not occurred.

        10.03    Distributions.

            (a)     Except as otherwise provided herein, all distributions of cash or other property shall be made to the Members pro rata in proportion to the respective Common Units of the Members on the record date of such distribution. Except as provided in this Section 10.03 or in Section 10.04, all distributions of Distributable Cash and property shall be made at such time as determined by the Board of Directors. All amounts withheld pursuant to the Code or any provisions of state or local tax law with respect to any payment or distribution to the Members from the Company shall be treated as amounts distributed to the relevant Member or Members pursuant to this Section 10.03.

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        10.04     Limitation Upon Distributions. No distribution shall be declared and paid if, after giving effect to the distribution, (i) the Company would be unable to pay its debts as they become due, or (ii) the assets of the Company would be less than the sum of its liabilities, except liabilities to Members on account of their contributions plus the amount that would be needed, if the Company were to be dissolved at the time of the distribution, to satisfy the preferential rights of holders of other Membership Interests or Economic Interests upon dissolution which are superior to the rights of the Member receiving the distribution.

        10.05     Accounting Principles. The profits and losses of the Company shall be determined in accordance with generally accepted accounting principles applied on a consistent basis.

        10.06     Interest On and Return of Capital Contributions. No Member shall be entitled to interest on its Capital Contribution or to return of its Capital Contribution, except as otherwise specifically provided for herein.

        10.07     Loans to Company. Nothing in this Agreement shall prevent any Member from making secured or unsecured loans to the Company by agreement with the Company.

        10.08     Accounting Period. The Company's accounting period shall be the Company's Fiscal Year.

        10.09     Records and Reports. At the expense of the Company, the Company shall maintain records and accounts of all operations and expenditures of the Company. At a minimum the Company shall keep at its principal place of business the following records:

            (a)     A current list of the full name and last known business, residence, or mailing address of each Member and Economic Interest Owner, both past and present;

            (b)     A copy of the Certificate of the Company and all amendments thereto, together with executed copies of any powers of attorney pursuant to which any amendment has been executed;

            (c)     Copies of the Company’s federal, state, and local income tax returns and reports, if any, for the three (3) most recent years; and

            (d)     Copies of the Company’s currently effective written Agreement and all amendments thereto, copies of any operating agreements of the Company no longer in effect, copies of any writings permitted or required with respect to a Member’s obligation to contribute cash, property or services, and copies of any financial statements of the Company for the three (3) most recent years.

        10.10     Returns and Other Elections. The Board of Directors shall cause the preparation and timely filing of all tax returns required to be filed by the Company pursuant to the Code and all other tax returns deemed necessary and required in each jurisdiction in which the Company does business. Copies of such returns, or pertinent information therefrom, shall be furnished to the Members within a reasonable time after the end of the Company’s Fiscal Year. All elections permitted to be made by the Company under federal or state laws shall be made as determined by the Board of Directors.

        10.11     Tax Matters Partner. A Member chosen by the Board of Directors shall be designated as the tax matters partner as defined in §6231 of the Code. Such Member shall have such duties, rights and obligations as are assigned to or imposed upon the tax matters partner by or under the Code.

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ARTICLE XI

TRANSFERABILITY AND OTHER RIGHTS
REGARDING TRANSFERS OF UNITS

        11.01     General. Except as otherwise specifically approved by the Board of Directors, neither a Member nor an Economic Interest Owner shall have the right to:

            (a)     sell, assign, pledge, hypothecate, transfer, exchange or otherwise transfer for consideration, (collectively, “sell”),

            (b)     gift, bequeath or otherwise transfer for no consideration (whether or not by operation of law, except in the case of bankruptcy) all or any part of its Membership Interest or Economic Interest.

ARTICLE XII

ADDITIONAL MEMBERS

        From the date of the formation of the Company, any Person or Entity acceptable to the Board of Directors may become a Member in this Company by the issuance by the Company of Membership Interests for such consideration as the Board of Directors shall determine. Each new Member must execute a counterpart or joinder to this Agreement. No new Members shall be entitled to any retroactive allocation of losses, income or expense deductions incurred by the Company. The Board of Directors may, at their option, at the time a Member is admitted, close the Company books (as though the Company’s tax year had ended) or make pro rata allocations of loss, income and expense deductions to a new Member for that portion of the Company’s tax year in which a Member was admitted in accordance with the provisions of Section 706(d) of the Code and the Treasury Regulations promulgated thereunder.

ARTICLE XIII

DISSOLUTION, DISSOCIATION AND TERMINATION

        13.01     Dissolution.

            (a)     The Company shall be dissolved only upon the vote of a Majority Interest of the Members entitled to vote.

            (b)     As soon as possible following the occurrence of any of the events specified in this Section 13.01 effecting the dissolution of the Company, the appropriate representative of the Company shall execute a Certificate of Dissolution in such form as shall be prescribed by the Florida Secretary of State and file same with the Florida Secretary of State’s office.

            (c)     If a Member who is an individual dies or a court of competent jurisdiction adjudges him to be incompetent to manage his person or his property, the Member’s executor, administrator, guardian, conservator, or other legal representative may exercise all of the Member’s rights for the purpose of settling his estate or administering his property.

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            (d)     Except as expressly permitted in this Agreement, a Member shall not voluntarily resign or take any other voluntary action which directly causes a Withdrawal Event. Unless otherwise approved by the Board of Directors, a Member who resigns (a “Resigning Member”) or whose Membership Interest is otherwise terminated by virtue of a Withdrawal Event, regardless of whether such Withdrawal Event was the result of a voluntary act by such Member, shall not be entitled to receive any distributions to which such Member would not have been entitled had such Member remained a Member. Except as otherwise expressly provided herein, a Resigning Member shall become an Economic Interest Owner. Damages for breach of this Section 13.01(d) shall be monetary damages only (and not specific performance), and such damages may be offset against distributions by the Company to which the Resigning Member would otherwise be entitled.

        13.02     Effect of Filing of Dissolving Statement. Upon the filing by the Florida Secretary of State of a Certificate of Dissolution, the Company shall cease to carry on its business, except insofar as may be necessary for the winding up and liquidation of its business, but its separate existence shall continue.

        13.03     Winding Up, Liquidation and Distribution of Assets.

            (a)     Upon dissolution, an accounting shall be made by the Company’s independent accountants of the accounts of the Company and of the Company’s assets, liabilities and operations, from the date of the last previous accounting until the date of dissolution. The officers or other designee of the Board of Directors shall immediately proceed to wind up the affairs of the Company.

            (b)     If the Company is dissolved and its affairs are to be wound up, the officers or other designee of the Board of Directors shall:

        (i)     Sell or otherwise liquidate all of the Company’s assets as promptly as practicable (except to the extent the Board of Directors may determine to distribute any assets to the Members in kind),

        (ii)     Allocate any profit or loss resulting from such sales to the Members’ and Economic Interest Owners’ Capital Accounts in accordance with Article X hereof,

        (iii)     Discharge all liabilities of the Company, including liabilities to Members and Economic Interest Owners who are creditors, to the extent otherwise permitted by law, other than liabilities to Members and Economic Interest Owners for distributions, and establish such Reserves as may be reasonably necessary to provide for contingent liabilities of the Company (for purposes of determining the Capital Accounts of the Members and Economic Interest Owners, the amounts of such Reserves shall be deemed to be an expense of the Company),

        (iv)     Distribute the remaining assets in the following order:

        (A)     If any assets of the Company are to be distributed in kind, the net fair market value of such assets as of the date of dissolution shall be determined by independent appraisal or other reasonable means established by the Board of Directors. Such assets shall be deemed to have been sold as of the date of dissolution for their fair market value, and the Capital Accounts of the Members and Economic Interest Owners shall be adjusted pursuant to the provisions of Article IX and Section 9.03 of this Agreement to reflect such deemed sale.

21

        (B)     The assets of the Company shall be distributed to the Members, either in cash or in kind, as determined by the Board of Directors, with any assets distributed in kind being valued for this purpose at their fair market value as determined pursuant to Section 13.03(b)(i). Distributions shall be done pro rata on the basis of Common Units held by each Member or Economic Interest Owner.

            (c)     Notwithstanding anything to the contrary in this Agreement, upon a liquidation within the meaning of Section 1.704-1(b)(2)(ii)(g) of the Treasury Regulations, if any Member has a Deficit Capital Account (after giving effect to all contributions, distributions, allocations and other Capital Account adjustments for all taxable years, including the year during which such liquidation occurs), such Member shall have no obligation to make any Capital Contribution, and the negative balance of such Member’s Capital Account shall not be considered a debt owed by such Member to the Company or to any other person for any purpose whatsoever.

            (d)     Upon completion of the winding up, liquidation and distribution of the assets, the Company shall be deemed terminated.

            (e)     The Members, the Board of Directors and the officers of the Company shall comply with any applicable requirements of applicable law pertaining to the winding up of the affairs of the Company and the final distribution of its assets.

        13.04     Return of Contribution Nonrecourse to Other Members. Except as provided by law or as expressly provided in this Agreement, upon dissolution, each Member or Economic Interest Owner shall look solely to the assets of the Company for the return of its Capital Contribution. If the Company property remaining after the payment or discharge of the debts and liabilities of the Company is insufficient to return the cash contribution of one or more Members or Economic Interest Owners, such Member or Members or Economic Interest Owner shall have no recourse against any other Member.

ARTICLE XIV

INDEMNIFICATION

        The Company shall indemnify the Directors and make advances for expenses to the maximum extent permitted under the Act.

ARTICLE XV

OTHER OPERATIONAL MATTERS

        15.01     Books of Account and Records. Proper and complete records and books of account shall be kept or shall be caused to be kept by the officers in which shall be entered fully and accurately all transactions and other matters relating to the Company’s business in such detail and completeness as is customary and usual for businesses of the type engaged in by the Company. Such books and records shall be maintained as provided in Section 10.09. The books and records shall at all times be maintained at the principal executive office of the Company and shall be open to the reasonable inspection and examination of the Members, Economic Interest Owners or their duly authorized representatives during reasonable business hours.

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        15.02     Execution of Instruments. The Board of Directors may authorize any officer or agent to enter into any contract or execute and deliver any instrument in the name and on behalf of the Company. Any such authorization may be general or limited to specific contracts or instruments.

        15.03     Company Indebtedness. No loan shall be contracted on behalf of the Company, and no evidence of indebtedness shall be issued in its name, unless authorized by the Board of Directors. Such authorization may be general or confined to specific instances. Loans so authorized may be effected at any time for the Company from any bank, trust company or other institution, or from any firm, corporation or individual. All bonds, debentures, notes and other obligations or evidences of indebtedness of the Company issued for such loans shall be made, executed and delivered as the Board of Directors shall authorize. When so authorized by the Board of Directors, any part of or all the properties, including contract rights, assets, business or goodwill of the Company, whether then owned or thereafter acquired, may be mortgaged, pledged, hypothecated or conveyed or assigned in trust as security for the payment of such bonds, debentures, notes and other obligations or evidences of indebtedness of the Company, and of any interest thereon, by instruments executed and delivered in the name of the Company.

        15.04     Deposits. Any funds of the Company may be deposited from time to time in such banks, trust companies or other depositaries as may be determined by the Board of Directors or the Chief Operating Officer, or by such officers or agents as may be authorized by the Board of Directors or the Chief Operating Officer to make such determination.

        15.05     Checks. All checks or demands for money and notes of the Company shall be signed by such officer or officers or such agent or agents of the Company, and in such manner, as the Board of Directors or the Chief Operating Officer from time to time may determine.

        15.06     Sale, Transfer, etc. of Securities. To the extent authorized by the Board of Directors, the Chief Operating Officer may sell, transfer, endorse, and assign any shares of stock, units, bonds or other securities owned by or held in the name of the Company, and may make, execute and deliver in the name of the Company, under its corporate seal, any instruments that may be appropriate to effect any such sale, transfer, endorsement or assignment.

        15.07     Voting as Stockholder. Unless otherwise determined by resolution of the Board of Directors, the Chief Operating Officer shall have full power and authority on behalf of the Company to attend any meeting of stockholders of any corporation in which the Company may hold stock, or any meeting of the owners of any other form of business and to act, vote (or execute proxies to vote) and exercise in person or by proxy all other rights, powers and privileges incident to the ownership of such stock or other ownership interest. Such officers acting on behalf of the Company shall have full power and authority to execute any instrument expressing consent to or dissent from any action of any such corporation or other business entity without a meeting. The Board of Directors may by resolution from time to time confer such power and authority upon any other person or persons.

ARTICLE XVI

MISCELLANEOUS PROVISIONS

        16.01     Notices. Any notice, demand, or communication required or permitted to be given by any provision of this Agreement shall be deemed to have been sufficiently given or served for all purposes if delivered personally to the party or to an executive officer of the party to whom the same is directed or, if sent by registered or certified mail, postage and charges prepaid, addressed to the Member’s and/or Company’s address, as appropriate, which is set forth in this Agreement. Except as otherwise provided herein, any such notice shall be deemed to be given three (3) business days after the date on which the same was deposited in a regularly maintained receptacle for the deposit of United States mail, addressed and sent as aforesaid.

23

        16.02     Application of Law. This Agreement, and the application of interpretation hereof, shall be governed exclusively by its terms and by the laws of the State of Florida, and specifically the Act.

        16.03     Waiver of Action for Partition. Each Member and Economic Interest Owner irrevocably waives during the term of the Company any right that it may have to maintain any action for partition with respect to the property of the Company.

        16.04     Amendments. This Agreement may not be amended except by a vote of a Majority Interest of the Members entitled to vote following the recommendation of the Board of Directors in favor of the amendment or a decision of the Board of Directors to submit the same to the Members without a recommendation.

        16.05     Execution of Additional Instruments. Each Member hereby agrees to execute such other and further statements of interest and holdings, designations, powers of attorney and other instruments necessary to comply with any laws, rules or regulations.

        16.06     Construction. Whenever the singular number is used in this Agreement and when required by the context, the same shall include the plural and vice versa, and the masculine gender shall include the feminine and neuter genders and vice versa.

        16.07     Headings; Table of Contents. The headings and table of contents in this Agreement are inserted for convenience only and are in no way intended to describe, interpret, define, or limit the scope, extent or intent of this Agreement or any provision hereof.

        16.08     Waivers. The failure of any party to seek redress for violation of or to insist upon the strict performance of any covenant or condition of this Agreement shall not prevent a subsequent act, which would have originally constituted a violation, from having the effect of an original violation.

        16.09     Rights and Remedies Cumulative. The rights and remedies provided by this Agreement are cumulative and the use of any one right or remedy by any party shall not preclude or waive the right to use any or all other remedies. Said rights and remedies are given in addition to any other rights the parties may have by law, statute, ordinance or otherwise.

        16.10     Severability. If any provision of this Agreement or the application thereof to any person or circumstance shall be invalid, illegal or unenforceable to any extent, the remainder of this Agreement and the application thereof shall not be affected and shall be enforceable to the fullest extent permitted by law.

        16.11     Heirs, Successors and Assigns. Each and all of the covenants, terms, provisions and agreements herein contained shall be binding upon and inure to the benefit of the parties hereto and, to the extent permitted by this Agreement, their respective heirs, legal representatives, successors and assigns.

        16.12     No Third Party Beneficiaries. None of the provisions of this Agreement shall be for the benefit of or enforceable by any creditor or other person to whom any debts, liabilities or obligations are owed by (or who otherwise has any claim against) the Company.

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        16.13     Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original but all of which shall constitute one and the same instrument.

        16.14     Books and Records. Except to the extent otherwise required by law, the books and records of the Company shall be kept at such place or places within or without the State of Mississippi as may be determined from time to time by the Board of Directors.

        16.15     Investment Representations. Each Member and Economic Interest Owner, if any, understand (1) that the Membership Interests and Economic Interests evidenced by this Agreement have not been registered under the Securities Act of 1933, or any other state securities law (collectively, the “Securities Acts”) because the Company is issuing these Membership Interests and Economic Interests in reliance upon the exemptions from the registration requirements of the Securities Acts providing for issuance of securities not involving a public offering, (2) that the Company has relied upon the fact that the Membership Interests and Economic Interests are to be held by each Member or Economic Interest Owner for investment, and (3) that exemption from registrations under the Securities Acts would not be available if the Membership Interests and Economic Interests were acquired by a Member or Economic Interest Owner with a view to distribution.

        Accordingly, each Member and Economic Interest Owner hereby confirms to the Company that such Member and Economic Interest Owner is acquiring the Membership Interests and Economic Interests for such own Member’s and Economic Interest Owner’s account, for investment and not with a view to the resale or distribution thereof. Each Member and Economic Interest Owner agrees not to transfer, sell or offer for sale any portion of the Membership Interests or Economic Interests unless there is an effective registration or other qualification relating thereto under the Securities Acts or unless the holder of Membership Interests or Economic Interests delivers to the Company an opinion of counsel, satisfactory to the Company, that such registration or other qualification under the Securities Acts and applicable state securities laws is not required in connection with such transfer, offer or sale. Each Member and Economic Interest Owner understands that the Company is under no obligation to register the Membership Interests or Economic Interests or to assist such Member or Economic Interest Owner in complying with any exemption from registration under the Securities Acts if such Member or Economic Interest Owner should, at a later date, wish to dispose of the Membership Interest or Economic Interest. Furthermore, each Member or Economic Interest Owner realizes that the Membership Interests and Economic Interests are unlikely to qualify for disposition under Rule 144 of the Securities and Exchange Commission unless such Member or Economic Interest Owner is not an “affiliate” of the Company and the Membership Interest or Economic Interest has been beneficially owned and fully paid for by such Member or Economic Interest Owner for at least two (2) years.

        Prior to acquiring the Membership Interests and Economic Interests, each Member and Economic Interest Owner has made an investigation of the Company and its business and has had available to each such Member and Economic Interest Owner all information with respect thereto which such Member needed to make an informed decision to acquire the Membership Interest or Economic Interest. Each Member and Economic Interest Owner considers himself or itself to be a person possessing experience and sophistication as an investor which are adequate for the evaluation of the merits and risks of such Member’s or Economic Interest Owner’s investment in the Membership Interest or Economic Interest.

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        16.16     Binding Arbitration. The Company, Members and Economic Interest Owners agree that any controversy, claim or dispute arising out of or relating to the construction, interpretation, performance, breach, termination, enforceability or validity of this Agreement or this arbitration provision shall be exclusively and finally resolved by arbitration by a single arbitrator in accordance with the Rules of Commercial Arbitration of the American Arbitration Association. The arbitration proceeding shall be conducted at the Company’s headquarters in Lake City, Florida, and shall afford the parties with opportunities to present and rebut evidence relating to the applicable issues. Judgment upon the award rendered by the arbitrator may be entered by any court having jurisdiction thereof. No party to the arbitration shall appeal to any court an order of the arbitrator. The arbitrator may allocate among the parties to the arbitration the costs, fees and other expenses (including but not limited to attorneys’ fees and expenses) relating to an arbitration in any manner that the arbitrator shall determine to be appropriate in his absolute discretion.

        16.17     Waiver of Appraisal Rights. No Member or Economic Interest Owner is entitled to appraisal rights as to any Membership Interest or Economic Interest.

        16.18     Limited Liability Company Agreement. This Agreement, although styled as an “Operating Agreement” shall constitute the Company’s “limited liability company agreement” under the Act.

        16.19     Entire Agreement. This Agreement constitutes the entire agreement among the parties with respect to the subject matter hereof and supercedes all other prior and contemporaneous agreements and understandings, both written and oral, among the parties or any of them with respect to the subject matter hereof.

*  *  *

[Signatures on following page.]

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        WITNESS our execution of this Agreement as of the Effective Date.

HILLANDALE FARMS, INC.,

A Florida Corporation

By /s/ Jack E. Hazen

      Jack E. Hazen

      Its President

HILLANDALE FARMS OF FLORIDA, INC.,

A Florida Corporation

By /s/ Jack E. Hazen

      Jack E. Hazen

      Its President

27

Exhibit A

Name	Capital Contribution	Common Membership Units
Hillandale Farms, Inc.	82.454%	82.454%
Hillandale Farms of Florida, Inc.	17.546%	17.546%

EX-99.1

Exhibit 99.1

CAL-MAINE FOODS, INC.

and

HILLANDALE, LLC

_________________

LOAN AGREEMENT

Dated as of October 12, 2005

_________________

Secured Promissory Note Due December 1, 2020

TABLE OF CONTENTS

		Page
SECTION 1.	LOAN; ISSUE OF NOTE; SECURITY; INTEREST.	1
1.1.	Authorization	1
1.2.	Loan; Closing	1
1.3.	Security	1
1.4.	Interest Rate	2
SECTION 2.	REPRESENTATIONS AND WARRANTIES.	7
2.1.	Financial Statements	7
2.2.	No Material Changes	8
2.3.	Liens	8
2.4.	Organization, Authority and Good Standing; Subsidiaries	8
2.5.	Title to Properties	9
2.6.	Leases and Liens	9
2.7.	Licenses	9
2.8.	Litigation	9
2.9.	No Burdensome Provisions	9
2.10.	Compliance with Other Instruments	10
2.11.	Disclosure	10
2.12.	ERISA	10
2.13.	Regulation G; Use of Proceeds	11
2.14.	Tax Liability	11
2.15.	Governmental Action	11
2.16.	Offering of Note	11
2.17.	Hazardous Waste	12
2.18.	Separate Property; No Flood Zone	12
2.19.	No Affiliation	12
2.20.	No Foreign Person	12
2.21.	Title to Property and Collateral	12
2.22.	Additional Representations and Warranties	12
SECTION 3.	CONDITIONS OF THE LOAN	12
3.1.	Opinion of Company's Counsel	13
3.2.	Legality	13
3.3.	Proceedings	13
3.4.	Representations True; No Default	13
3.5.	Collateral Documents	13
3.6.	Opinion of Lender's Counsel	13
3.7.	Environmental Audit Results	13
3.8.	INTENTIONALLY DELETED	13
3.9.	Title Requirements	13
SECTION 4.	REPRESENTATION OF LENDER	14

i

4.1.	Acquisition for Investment	14
SECTION 5.	FINANCIAL STATEMENTS; COMPLIANCE CERTIFICATES; ADDITIONAL INFORMATION; AND INSPECTION.	14
5.1.	Financial Statements and Reports	14
5.2.	Inspection	16
SECTION 6.	PRINCIPAL PAYMENT OF NOTE.	17
6.1.	Principal Payments - Mandatory and Optional Prepayment	17
6.2.	Prepayment of Note Upon Change of Control	17
6.3.	Prepayment Price	18
6.4.	Interest After Date Fixed for Principal Payment	19
SECTION 7.	AFFIRMATIVE COVENANTS.	19
7.1.	To Pay Note	19
7.2.	Maintenance of Office	19
7.3.	To Keep Books	19
7.4.	Payment of Taxes; Corporate Existence; Maintenance of Properties	19
7.5.	To Insure	20
SECTION 8.	RESTRICTIVE COVENANTS.	21
8.1.	Additional Funded Debt	21
8.2.	Consolidated Tangible Net Worth	21
8.3.	Current Ratio	21
8.4.	Cash Flow Coverage	21
8.5.	Restricted Investments; Pledge of Stock	21
8.6.	Merger, Consolidation, Sale or Lease	22
8.7.	Transactions with Affiliates	23
8.8.	Encumbrances On and Transfers of the Collateral	23
8.9.	Capital Expenditures	23
8.10.	Distributions	23
8.11.	Fiscal Year and Tax Status	23
8.12.	Investments in Other Persons	24
8.13.	Sale and Leaseback Transactions	24
8.14.	Inconsistent Agreements	24
8.15.	Change in Business or Accounting	24
8.16.	Charter and Bylaws	24
SECTION 9.	DEFINITIONS.	24
SECTION 10.	DEFAULTS AND REMEDIES	29
10.1.	Events of Default; Acceleration	29
10.2.	Suits for Enforcement	32
10.3.	Remedies Not Waived	32
10.4.	Remedies Cumulative	32
10.5.	Costs and Expenses	32

ii

SECTION 11.	MISCELLANEOUS.	32
11.1.	Loss, Theft, Destruction or Mutilation of Note	32
11.2.	Expenses	32
11.3.	Stamp Taxes, Recording Fees, etc.	33
11.4.	Successors and Assigns	33
11.5.	Payment	33
11.6.	Notices	33
11.7.	Severability	34
11.8.	Law Governing; Modification	34
11.9.	Headings	34
11.10.	Counterparts	34
11.11.	Final Credit Agreement	34

EXHIBIT A — FORM OF NOTE

EXHIBIT B — FACILITIES

EXHIBIT C — LIENS

EXHIBIT D — OWNERSHIP OF COMPANY AND SUBSIDIARIES

EXHIBIT E — NOTICE OF ELECTION

iii

CAL-MAINE FOODS, INC.

and

HILLANDALE, LLC

LOAN AGREEMENT

October 12, 2005

Metropolitan Life Insurance Company
Agricultural Investments
8717 West 110th Street
Suite 700
Overland Park, Kansas 66210

Attention: Senior Vice-President

        CAL-MAINE FOODS, INC., a Delaware corporation, and HILLANDALE, LLC, a Florida limited liability company (herein individually and collectively called the “Company”), jointly and severally, agree with you as follows:

SECTION 1.     LOAN; ISSUE OF NOTE; SECURITY; INTEREST.

        1.1.     Authorization. The Company has duly authorized the issuance of secured promissory note due December 1, 2020 (the “Maturity Date”) in the aggregate principal amount of $28,000,000.00 (the “Note”), such Note to be in the form and have terms and provisions substantially as set forth in Exhibit “A”.

        1.2.    Loan; Closing. The Company hereby agrees to borrow from you, and you, subject to the terms and conditions herein set forth, hereby agree to lend to the Company, $28,000,000.00 on or about the date hereof (the “Closing Date”).

        The loan will be evidenced by and, subject to all other conditions precedent having been met, be made against delivery to you at 10 o’clock a.m. CST, on the Closing Date, at the offices of Young Williams, P.A., Jackson, Mississippi, or at such other time and place as the parties may agree, of the Note payable to you or assigns, dated the Closing Date, duly executed by the Company and in the aggregate principal amount of such loan. Delivery of the Note hereunder shall be made against payment to the Company or the holders of liens on the Facility (as hereinafter defined) in Federal Reserve or other funds of $28,000,000.00 as the principal amount of such loan.

        1.3.    Security. Payment of the Note shall be secured by (i) a mortgage and security agreement and financing statement to be entered into by the Company which will create a first lien on all property, plant and equipment (except as excluded therein) owned by Hillandale, LLC at each location described in Exhibit “B” lying within the State of Florida (collectively referred to along with all other locations described in Exhibit “B” as the “Facility”), (ii) a deed of trust, security agreement and financing statement to be entered into by the Company which will create

Loan Agreement, Page 1

a first lien on all property, plant and equipment (except as excluded therein) owned by Hillandale, LLC at the location described in Exhibit “B” lying within the State of Georgia, (iii) a mortgage and security agreement and financing statement to be entered into by the Company which will create a first lien on all property, plant and equipment (except as excluded therein) owned by Hillandale, LLC at the location described in Exhibit “B” lying within the State of Alabama (such mortgages and deed of trust described in subparagraphs (i), (ii) and (iii) herein being collectively referred to as the “Deed of Trust”), a lien on the leasehold interest of Hillandale, LLC on such of the locations described in Exhibit “B” as are leased (and not owned in fee), together with all property, plant and equipment (except as excluded therein) owned by Hillandale, LLC and located thereon, and (iv) a security agreement between the Company, as debtor, and you, as secured party (the “Security Agreement”) granting a first priority security interest in, interalia, all equipment, fixtures and other personal property (except as excluded therein) utilized in connection with, or located at, the Facility as described in said Security Agreement, which security interest will be perfected by one or more financing statements. The Deed of Trust, the Leasehold Assignment, and the Security Agreement shall each be dated and delivered on the Closing Date and, together all other documents evidencing or securing the Loan, are collectively referred to herein as the “Collateral Documents”.

        1.4.    Interest Rate.

        (A)     Defined Terms. As used herein:

        (1)     “Base Rate” shall mean 110 basis points (1.10%) per annum in excess of the LIBO Rate.

        (2)     “Base Rate Tranche” means the outstanding principal balance of the Note from time to time accruing interest at the Base Rate.

        (3)     The “Base Rate Interest Determination Date” applicable to a Base Rate Interest Period will be the fifth New York Working Day on which dealings in deposits in U.S. dollars are transacted in the London Interbank market next preceding the first day of such Interest Period.

        (4)     “Base Rate Interest Period” shall refer only to the time during which the Base Rate is in effect with respect to the Base Rate Tranche of the Loan, commencing on the date hereof and, with respect to subsequent Base Rate Interest Periods, on the day next following the last day of the immediately preceding Base Rate Interest Period, and ending (i) in the case of the first Base Rate Interest Period, on the last day of the third calendar month after the month in which the date hereof occurs, and (ii) in the case of subsequent Base Rate Interest Periods, the last day of the third month after the end of the immediately preceding Base Rate Interest Period; provided, however, that no Base Rate Interest Period shall extend beyond the Maturity Date.

Loan Agreement, Page 2

        (5)     “Interest Period” shall refer to the time during which the Base Rate is in effect, for the Base Rate Tranche, or the time during which a Swapped Rate is in effect, for one or more Swapped Rate Tranches, as herein provided.

        (6)     “Interest Rate” shall mean the per annum rate of interest (under the Base Rate Tranche and/or the Swapped Rate Tranche) to be paid by the Company on any outstanding principal due under the Note. The Interest Rate from the date hereof up to, and including, the last day of the third calendar month after the month in which the date hereof occurs shall be equal to five and nineteen one-hundredths percent (5.19%) per annum; and the Interest Rate for each subsequent Interest Period shall be either (a) the sum of (x) the LIBO Rate; plus (y) 110 basis points (1.10%) ((x) plus (y)) shall hereinafter be referred to as the “Base Rate”) or (b) the Swapped Rate then in effect for one or more Swapped Rate Tranches, in accordance with the terms hereof.

        (7)     “LIBO Rate” for any Base Rate Interest Period means the rate determined by you on the related Base Rate Interest Determination Date on the basis of offered rates for deposits in U.S. dollars having a ninety (90) day maturity as reflected on the LIBO Page (as defined below) or such other “on-line” market service selected by you in your sole discretion, as of 11:00 A.M., London time, on the Base Rate Interest Determination Date relating to such Base Rate Interest Period.

        (8)     “LIBO Page” means (i) the appropriate Bloomberg Financial Markets Services Screen or any successor index on such service under the heading “USD,” or (ii) the display designated as page 3750 on the Dow Jones Telerate Service, or such other page as may replace page 3750 on that service (or such other service as may be nominated as the information vendor by the British Bankers’ Association for the purpose of displaying British Bankers’ Association interest settlement rates for U.S. dollar deposits as the composite offered rate for London interbank deposits).

        (9)     “London Working Day” shall mean any day on which dealings in United States Dollars are transacted in the London Interbank market.

        (10)     “New York Working Day” shall mean any day other than a Saturday, Sunday or a day on which commercial banks in New York City are required or authorized to be closed.

        (11)     “Notice of Election” shall mean, as to each Swapped Rate Tranche, written notice in the form of Exhibit “E” attached hereto and made a part hereof by this reference, sent by the Company via facsimile transmission to you at (until further notice) (309) 662-9632, attention: Regional Manager, specifying the amount of such Swapped Rate Tranche (which must be no less than $2,000,000 and in integral multiples of $10,000) and the length of the Swapped Rate Interest Period.

        (12)     “Swapped Rate Interest Period” shall refer only to the time during which a Swapped Rate is in effect with respect to one or more Swapped Rate Tranches and shall mean the period commencing, as to each Swapped Rate Tranche, on the first day of the first month following Lender’s receipt of a Notice of Election as to such Swapped Rate Tranche (but in no event sooner than the first day of the fourth month occurring after the month in which the date hereof occurs), and ending, at the Company’s election (as provided below), on the second, third, fourth, fifth, seventh or tenth anniversary of the day prior to such commencement date; provided, however, that the Company shall not be entitled to select any Swapped Rate Interest Period that would extend beyond the Maturity Date.

Loan Agreement, Page 3

        (13)     “Swapped Rate Determination Date” shall mean, as to each Swapped Rate Tranche, the Working Day on which a Notice of Election is received by you, if received before 2:00 p.m., CST on a Working Day, or the next Working Day, if received by you after 2:00 p.m. CST; provided, however, that any Notice of Election received by you more than fifteen (15) days, or less than one (1) day, prior to the end of any Swapped Rate Interest Period shall not be effective as to the subject Swapped Rate Tranche and the principal balance of such Tranche shall thereafter accrue interest at the Base Rate unless and until a subsequent Notice of Election is duly made.

        (14)     “Swapped Rate” for any Swapped Rate Interest Period shall mean, for each Swapped Rate Tranche, the sum of (i) the interest rate for “Interest Rate Swaps” on the applicable Swapped Rate Determination Date, as reported on the next Working Day following the Swapped Rate Determination Date by the Federal Reserve Bank and published at its webpage http.www.federalreserve.gov/releases/h15/update (or, in the absence thereof, such other source or information vendor as you deem necessary or reasonable in your sole discretion), and (ii) 110 basis points (1.10%) per annum.

        (15)     “Swapped Rate Tranche” shall mean up to (but not more than) four (4) portions of the outstanding principal balance from time to time under the Note for which the Company duly delivers to you a Notice of Election to have such portions accrue interest at a Swapped Rate.

        (16)     “Working Day” shall mean any day which is both a London Working Day and a New York Working Day.

        (B)     Payments of Interest. The unpaid principal balance of the Note shall bear interest at the Interest Rate in effect from time to time as herein provided. The Company covenants and agrees that it will pay interest pursuant to the terms hereof on the first day of each month, commencing on the first day of the first full month subsequent to the Closing Date and on the first day of each subsequent month to and including the Maturity Date.

        (C)     Special LIBO and Swapped Rate Provisions.

        (1)     Taxes. All payments made by the Company on account of the loan evidenced by the Note shall be made free and clear of, and without deduction for or on account of, any present or future stamp or other taxes, levies, imposts, duties, charges, fees, deductions, withholding restrictions or conditions of any nature whatsoever now or hereafter imposed, levied, collected, withheld or assessed by any country (or by any political subdivision or taxing authority thereof or therein) (collectively, “Taxes”). If any Taxes are required to be withheld from any amounts payable to you pursuant to this Agreement, the Note and Collateral Documents (as herein defined), the amounts so payable to you shall be increased to the extent necessary to yield to you (after payment of all Taxes) interest or any such other amounts payable hereunder at the rates or in the amounts specified herein. Whenever any Tax is payable by you, the Company shall promptly pay same and as promptly as possible thereafter the Company shall send you an original official receipt showing payment thereof. The Company shall indemnify you against and shall hold you harmless from any incremental taxes, interest or penalties that may become payable by you as a consequence of the failure of the Company to pay any Taxes or the failure of the Company to deliver to you an original official receipt therefor. The Company shall indemnify you for and hold you harmless from any loss, cost, or expense (including, without limitation, counsel fees) relating to the foregoing and to any present or future claim of liability for any registration charge or any stamp, excise or similar taxes, including any interest equalization tax, and any penalties or interest with respect thereto, that may be imposed by any jurisdiction in connection with the loan, evidenced by the Note. Your determination of any liability hereunder shall be conclusive absent manifest error. The Company’s liability hereunder shall survive repayment of the indebtedness evidenced by the Note.

Loan Agreement, Page 4

        (2)     Costs. Notwithstanding anything contained herein to the contrary, if:

        (a)     the circumstances described in subsections (3) or (4) below shall occur; or

        (b)     any law, regulation, treaty or directive or any change therein or in the interpretation or application thereof or compliance by you with any request or directive (whether or not having the force of law) from any central bank or other governmental authority, agency or instrumentality enacted or adopted after the date hereof:

        (i)     subjects you to any tax, levy, impost, fee, charge, duty, deduction or withholding of any kind whatsoever with respect to the loan evidenced by the Note, or changes the bases of taxation of payments to you of principal, commitment fee, interest or any other amount payable hereunder (except for changes in the rate of tax on your overall net income and Taxes (as defined in subsection(1) above)); or

        (ii)     imposes, modifies or holds applicable any reserve, special deposit, compulsory loan or similar requirements against assets held by, deposits or other liabilities in or for the account of, advances or loans by, or other credit extended by, or any other acquisition of funds by, any office of yours; or

        (iii)     imposes on you any other condition.

        (3)     You shall have determined that compliance by you with any law or regulation, request or directive regarding capital adequacy (whether or not having the force of law) or with any authority, central bank or comparable agency, has or would have the effect of reducing the rate of return on your capital as a consequence of their obligations hereunder to a level below that which you could have achieved but for such adoption, change or compliance (taking into consideration your policies with respect to capital adequacy); or

        (4)     A prepayment when permitted under the terms hereof and the terms of the Note, of any portion of the loan evidenced by the Note (a) on a date other than on the date of expiration of an Interest Period, whether such prepayment is optional or mandatory, or (b) on any day (whether or not on such an expiration date) if notice of such prepayment shall not have been given to you at least thirty (30) days prior to such prepayment (the provisions of this subpart (d) shall not be deemed to permit a prepayment in contravention of the provisions of Subsection 6.1 hereof); or

Loan Agreement, Page 5

        (5)     The Company shall default in the payment of the principal amount of or interest on the Loan; or

        (6)     The Maturity Date of the Loan shall be accelerated by you; or the Company fails to make a prepayment evidenced by the Note, when permitted under the terms hereof and the terms of the Note, which the Company has notified you it would make; or

        (7)     There occurs a conversion of the Interest Rate from one based on the Base Rate to one based on a Swapped Rate, or from one based on a Swapped Rate to one based on the Base Rate, on a date other than the last day of an applicable Interest Period; or

        (8)     Any other event should occur which would impose any additional condition on you with respect to such amounts, and if any other similar measure should result, in your opinion, in an increase in the cost to you of making or maintaining indebtedness at the Base Rate or a Swapped Rate hereunder or a reduction in the amount of interest receivable by you in respect thereof,

and the result of any of the foregoing is to increase the cost to you of making, renewing or maintaining advances or extensions of credit or to reduce any amount receivable thereunder, or you incur any other cost, loss or expense, including, but not limited to, any interest or fees which are or would have been payable by you to lenders of funds actually obtained by you or, if not actually obtained, would have been obtained if you had decided to obtain same, in order to make or maintain its eurodollar loans hereunder, then, in any such case, the Company shall pay you, on the second New York Working Day following its demand, any additional amounts necessary to compensate you for such cost, loss, expense or reduced amount receivable (hereinafter referred to as “Rate Breakage”). If you become entitled to claim any additional amounts pursuant to this Section (C), you shall promptly notify the Company of the event by reason of which it has become so entitled and shall certify any additional amounts so payable. Such certification submitted by you to the Company shall be conclusive absent manifest error.

        (9)     Legality. Notwithstanding any other provisions herein, if any law, regulation, treaty or directive or any change therein or in the interpretation or application thereof makes it unlawful for you to make or maintain loans bearing interest with reference to the LIBO Rate or a Swapped Rate as contemplated by this Agreement, then you shall give the Company prompt notice thereof and any portion of the Loan then bearing interest with reference to the LIBO Rate or a Swapped Rate shall bear interest at a rate most nearly equivalent thereto, as determined in your sole discretion (unless it shall not be illegal to allow the LIBO Rate or the Swapped Rate to remain the basis for the applicable Interest Rate until the end of the current Interest Period related thereto, in which case the LIBO Rate or the Swapped Rate, as the case may be, shall be applicable until the end of such Interest Period).

Loan Agreement, Page 6

        (10)     Conversion to Alternative Rate. Anything herein to the contrary notwithstanding, if, at the time of or prior to the determination of the LIBO Rate or any Swapped Rate, you determine (which determination shall be conclusive) that (i) by reason of circumstances affecting the London Interbank Market or credit markets generally, adequate and fair means do not or will not exist for determining the rate in question, or (ii) the applicable rate, as determined by you, will not accurately reflect the cost to you of making or maintaining the Loan at the rate in question, then you shall give the Company notice thereof, and the Loan (or the applicable Tranche thereof, as the case may be) shall bear interest, a rate most nearly equivalent thereto, as determined by you in your sole discretion.

        (D)     The obligation evidenced by the Note shall bear interest from and after the occurrence of an Event of Default at the Overdue Interest Rate. The applicable Overdue Interest Rate shall apply to the indebtedness evidenced by the Note both before or after any judgment on the indebtedness evidenced by the Note.

        (E)     In the event the interest provisions hereof or any exaction provided for herein or in the Collateral Documents shall result for any reason and at any time during the term of this loan in an effective rate of interest which transcends the limit of the usury or any other law applicable to this loan, all sums in excess of those lawfully collectible as interest for the period in question shall, without further agreement or notice between or by any party hereto, be applied on principal immediately upon receipt and effect as though the payor had specifically designated such extra sums to be so applied to principal, and the holder of the Note shall accept such extra payment or payments as a premium-free prepayment. If any such amounts are in excess of the principal then outstanding, such excess shall be paid to the Company. In no event shall any agreed-to or actual exaction as consideration for the Loan transcend the limits imposed or provided by the law applicable to this transaction or the Company in the jurisdictions in which the Facility or any other security for payment of such Note is located for the use or detention of money or for forbearance in seeking its collection.

SECTION 2.    REPRESENTATIONS AND WARRANTIES.

        The Company represents and warrants that:

        2.1.    Financial Statements. You have been furnished with copies of the consolidated balance sheet of Cal-Maine Foods, Inc. and its Subsidiaries as of the Saturday nearest May 31 in each of the years 1986 to 2005, inclusive, and the related consolidated statements of operations, changes in stockholders’ equity and changes in financial position of the Company and its Subsidiaries for the fiscal years ended on said dates, accompanied in each case by the opinion of its independent certified public accountants.

        Said financial statements, including the related schedules and notes, are complete and correct and fairly present (a) the financial condition of the Company and its Subsidiaries as at the respective dates of said balance sheets and (b) the results of the operations and changes in financial position of the Company and its Subsidiaries for the fiscal years ended on said dates, all in conformity with generally accepted accounting principles applied on a consistent basis (except as otherwise stated therein or in the notes thereto) throughout the periods involved.

Loan Agreement, Page 7

        2.2.    No Material Changes. There has been no material adverse change in the business, operations, properties, assets, prospects or condition, financial or other, of the Company and its Subsidiaries subsequent to May 31, 2005.

        2.3.    Liens. Exhibit “C” hereto correctly sets forth all material Liens securing Indebtedness for money borrowed of the Company and its Subsidiaries existing on the date hereof.

        2.4.    Organization, Authority and Good Standing; Subsidiaries. Exhibit “D” hereto correctly sets forth the name and jurisdiction of incorporation of each entity comprising the Company and a listing of the majority stockholders (by name or category) and partners of the Company and their respective interests in the Company as of the date set forth thereon. The shares of stock and/or partnership and/or limited liability company interests listed in Exhibit “D” have been duly issued and are fully paid and non-assessable. More than fifty percent (50%) of the outstanding Voting Stock of Cal-Maine Foods, Inc. is owned by Fred Adams, Jr. and his immediate family (as defined in Section 6.2), and more than fifty percent (50%) of the Voting Stock of Cal-Maine Foods, Inc. and its ownership interests in Hillandale, LLC are and shall remain free and clear of all Liens notwithstanding any subsequent transfer or transfers to members of the immediate family of Fred Adams, Jr. (as defined in Section 6.2). Except as indicated on Exhibit “D”, no person or entity has any right, contingent or otherwise, to purchase any such shares of stock and/or ownership interests. Cal-Maine Foods, Inc. is a duly organized and validly existing corporation in good standing under the laws of the State of Delaware, and Hillandale, LLC is a duly organized and validly existing limited liability company in good standing under the laws of the State of Florida, and each such entity has full power and authority to own its properties and assets and to carry on the business which it now owns and carries on. Cal-Maine Foods, Inc. has no Subsidiaries other than Cal-Maine Farms, Inc., South Texas Applicators, Inc., Southern Equipment Distributors, Inc., CMF of Kansas, LLC, Hillandale, LLC and American Egg Products, LLC as of the date hereof. Exhibit “D” also correctly sets forth (a) the name and jurisdiction of incorporation of each Subsidiary of the Company, and (b) a statement of the capitalization of each such Subsidiary and the ownership of its stock. The shares of stock in such Subsidiaries listed in Exhibit “D” as owned by the Company are so owned as of the date of this Agreement, free and clear of all Liens, and all such shares of stock have been duly issued and are fully paid and non-assessable. Unless indicated on Exhibit “D”, no person or entity has any right, contingent or otherwise, to purchase any such shares of stock. Cal-Maine Farms, Inc. and South Texas Applicators, Inc. are duly organized and validly existing corporations in good standing under the laws of the State of Delaware, and have full power and authority to own their properties and assets and to carry on the businesses which they now own and carry on. Southern Equipment Distributors, Inc. is a duly organized and validly existing corporation in good standing under the laws of the State of Mississippi, and it has full power and authority to own its properties and assets and to carry on the business which it now owns and carries on. CMF of Kansas, LLC is a duly organized and validly existing limited liability company in good standing under the laws of the State of Delaware, and has full power and authority to own its properties and assets and to carry on the business which it now owns and carries on. The Company and each of its Subsidiaries are duly qualified and in good standing as foreign corporations in each jurisdiction wherein the nature of the property owned or leased by them or the nature of the business transacted by them makes such qualification necessary. There are no Subsidiaries of Cal-Maine Farms, Inc., South Texas Applicators, Inc., Southern Equipment Distributors, Inc., Hillandale, LLC or CMF of Kansas, LLC as of the date hereof.

Loan Agreement, Page 8

        2.5.    Title to Properties. The Company and its Subsidiaries have good and marketable fee title to all the real properties (other than leaseholds) and good and marketable title to all other material property reflected on the balance sheet of the Company and its Subsidiaries as of May 31, 2005 referred to in Section 2.1, or purported to have been acquired by the Company or its Subsidiaries after said date, excepting, however, property sold or otherwise disposed of subsequent to said date in the ordinary course of business.

        2.6.    Leases and Liens. None of the properties or assets reflected in the consolidated balance sheet of the Company and its Subsidiaries as of May 31, 2005 referred to in Section 2.1, or acquired by the Company or its Subsidiaries after said date, is held by the Company or its Subsidiaries subject to any Lien which would not be permitted by Section 7.4(a) or which is not disclosed in Exhibit “C” hereto. The Company and its Subsidiaries enjoy peaceful and undisturbed possession under all of the leases under which they are operating as Lessee, and all such leases are valid, including, without limitation, in each instance, good title being vested in the lessor thereunder, and subsisting and in full force and effect.

        2.7.    Licenses. The Company and its Subsidiaries possess and shall continue to possess all trademarks, trade names, copyrights, patents, governmental licenses, franchises, certificates, consents, permits and approvals necessary to enable them to carry on their business in all material respects as now conducted and to own and operate the properties material to their business as now owned and operated, without known conflict with the rights of others. All such trademarks, trade names, copyrights, patents, licenses, franchises, certificates, consents, permits and approvals which are material to the operations of the Company and its Subsidiaries, taken as a whole, are valid and subsisting.

        2.8.    Litigation. To the best knowledge of the Company after due inquiry and investigation, there are no actions, suits or proceedings (whether or not purportedly on behalf of the Company or any of its Subsidiaries) pending or threatened against or affecting the Company or any of its Subsidiaries at law or in equity or before or by any federal, state, municipal or other governmental department, commission, board, bureau, agency or instrumentality, domestic or foreign, or before any arbitrator of any kind, which involve any of the transactions herein contemplated or the possibility of any material and adverse change in the business, operations, properties, assets, prospects or condition, financial or other, of the Company and its Subsidiaries; and neither the Company nor any its Subsidiaries is in default or violation of any law or any rule, regulation, judgment, order, writ, injunction, decree or award of any court, arbitrator or federal, state, municipal or other governmental department, commission, board, bureau, agency or instrumentality, domestic or foreign, which default or violation might have a material adverse effect on the business, operations, properties, prospects or condition, financial or other, of the Company and its Subsidiaries, taken as a whole, and for which sufficient reserves have been set aside to pay, in the event of an adverse judgment, all damages claimed thereunder.

        2.9.    No Burdensome Provisions. Neither the Company nor any of its Subsidiaries is a party to any agreement or instrument or subject to any charter or other corporate or legislative restriction or any judgment, order, writ, injunction, decree, award, rule or regulation which materially and adversely affects or in the future may (so far as the Company can now reasonably foresee) materially and adversely affect the business, operations, properties, assets, prospects or condition, financial or other, of the Company and its Subsidiaries, taken as a whole.

Loan Agreement, Page 9

        2.10.    Compliance with Other Instruments. Neither the Company nor any of its Subsidiaries is in default in the performance, observance or fulfillment of any of the obligations, covenants or conditions contained in any bond, debenture, note or other evidence of Indebtedness of the Company or its Subsidiaries or contained in any instrument under or pursuant to which any thereof has been issued or made and delivered. Neither the execution and delivery of this Agreement and the Collateral Documents by the Company, the consummation by the Company of the transactions herein and therein contemplated, nor compliance by the Company with the terms, conditions and provisions hereof and thereof and of the Note will violate any provision of law or rule or regulation thereunder or any order, injunction or decree of any court or other governmental body to which the Company or its Subsidiaries is a party or by which any term thereof is bound or conflict with or result in a breach of any of the terms, conditions or provisions of the corporate charter or by-laws or limited liability company agreement of the Company or its Subsidiaries or of any agreement or instrument to which the Company or its Subsidiaries is a party or by which the Company or its Subsidiaries is bound, or constitute a default thereunder, or result in the creation or imposition of any Lien of any nature whatsoever upon any of the properties or assets of the Company or its Subsidiaries (other than the Liens created by the Collateral Documents). No consent of the stockholders or partners or other action of the Company or its Subsidiaries is required for the execution, delivery and performance of this Agreement, the Collateral Documents or the Note by the Company other than as delivered to you prior to Closing, if any.

        2.11.    Disclosure. Neither this Agreement, the Collateral Documents nor any of the Exhibits hereto, nor any certificate or other data furnished to you in writing by or on behalf of the Company or its Subsidiaries in connection with the transactions contemplated by this Agreement contains any untrue statement of a material fact or omits a material fact necessary to make the statements contained herein or therein not misleading. To the best knowledge of the Company after due inquiry and investigation, there is no fact which materially and adversely affects or in the future may (so far as the Company can now reasonably foresee) materially and adversely affect the business, operations, properties, assets, prospects or condition, financial or other, of the Company and its Subsidiaries, taken as a whole, which has not been disclosed to you in writing.

        2.12.    ERISA. The Company represents, warrants and covenants that it is acting on its own behalf and that as of the date hereof, it is not an employee benefit plan as defined in Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), which is subject to Title I of ERISA, nor a plan as defined in Section 4975(e)(1) of the Internal Revenue Code of 1986, as amended, each of the foregoing hereinafter referred to collectively as a “Plan”, and the assets of the Company do not constitute “plan assets” of one or more such Plans within the meaning of Department of Labor Regulation Section 2510.3-101. The Company also represents, warrants and covenants that it will not be reconstituted as a Plan or as an entity whose assets constitute “plan assets”.

Loan Agreement, Page 10

        2.13.    Regulation G; Use of Proceeds. Neither the Company nor any of its Subsidiaries owns or has any present intention of acquiring any “margin stock” as defined in Regulation G (12 C.F.R., Chapter II, Part 207) of the Board of Governors of the Federal Reserve System (herein called “margin stock”). The proceeds from the issuance of the Note will be used by the Company to finance the acquisition of a fifty-one percent (51%) interest in Hillandale, LLC. None of such proceeds will be used, directly or indirectly, for the purpose of purchasing or carrying any margin stock or for the purpose of reducing or retiring any indebtedness which was originally incurred to purchase or carry margin stock or for any other purpose which might constitute this transaction a “purpose credit” within the meaning of said Regulation G. Neither the Company nor its Subsidiaries nor any agent acting on their behalf has taken or will take any action which might cause the transaction contemplated herein to violate said Regulation G, Regulation T (12 C.F.R., Chapter II, Part 220) or Regulation X (12 C.F.R., Chapter II, Part 224) or any other regulation of the Board of Governors of the Federal Reserve System or to violate the Securities Exchange Act of 1934, in each case as now in effect or as the same may hereafter be in effect.

        2.14.    Tax Liability. The Company and its Subsidiaries have filed all tax returns which are required to be filed and have paid all taxes which have become due pursuant to such returns and all other taxes, assessments, fees and other governmental charges upon the Company and its Subsidiaries and upon their properties, assets, income and franchises which have become due and payable by the Company or its Subsidiaries except those wherein the amount, applicability or validity are being contested by the Company or its Subsidiaries by appropriate proceedings in good faith and in respect of which adequate reserves have been established. In the opinion of the Company, all tax liabilities of the Company and its Subsidiaries were adequately provided for as of May 31, 2005 and are now so provided for on the books of the Company and its Subsidiaries.

        2.15.    Governmental Action. No action of, or filing with, any governmental or public body or authority is required to authorize, or is otherwise required in connection with, the execution, delivery and performance by the Company of this Agreement, the Collateral Documents or the Note (other than recordation of the Deed of Trust and/or Leasehold Assignments and financing statements among the public records of the counties in which the components of the Facility are located and the filing of financing statements with respect to the Collateral (as defined in the Security Agreement) in the Office of the Secretary of State of the State of Florida, all of which will have been duly recorded or filed on or prior to the Closing Date).

        2.16.    Offering of Note. Neither the Company nor any agent acting on its behalf has, either directly or indirectly, sold or offered for sale or disposed of, or attempted or offered to dispose of, the Note or any part thereof, or any similar obligation of the Company, to, or has solicited any offers to buy any thereof from, or has otherwise approached or negotiated in respect thereof with, any Person or Persons other than you and no more than six other institutional investors; and the Company agrees that neither it nor any agent acting on its behalf will sell or offer for sale or dispose of, or attempt or offer to dispose of, any thereof to, or solicit any offers to buy any thereof from, or otherwise approach or negotiate in respect thereof with, any Person or Persons so as thereby to bring the issuance or delivery of the Note within the provisions of Section 5 of the Securities Act of 1933, as amended.

Loan Agreement, Page 11

        2.17.    Hazardous Waste. Neither the Facility nor any portion thereof nor any other property owned or controlled at any time by the Company or its Subsidiaries has been or will be used by the Company or its Subsidiaries, or any tenant of the Facility or any portion thereof or such other property, for the production, release, storage, handling or disposal of hazardous or toxic wastes or materials other than those fuels, pesticides, herbicides and other chemicals customarily used in agricultural operations of the type currently conducted by the Company or its Subsidiaries at the Facility or such other property, all of which have been and will be used in accordance with all applicable laws and regulations.

        2.18.    Separate Property; No Flood Zone. All real property parcels comprising the Facility are taxed and billed separately from other real property, whether or not subject to the Deed of Trust, and none of the improvements located at the Facility are located within a flood zone in an area designated as having special flood hazards, as defined by the Flood Disaster Prevention Act of 1973, as amended.

        2.19.    No Affiliation. No director, officer or majority stockholder of the Company or any Subsidiary is an officer or director of yours or is a relative of an officer or director of yours within the following categories: a son, daughter or descendant of either; a stepson, stepdaughter, stepfather, stepmother; father, mother or ancestor of either, or a spouse. It is expressly understood that for the purpose of determining any of the foregoing relationships, a legally adopted child of a person is considered a child of such person by blood.

        2.20.    No Foreign Person. To the best knowledge of the Company after due inquiry and investigation, neither the Company nor any of its Subsidiaries nor any stockholder of the Company (except for a minority of the stockholders of Cal-Maine Foods, Inc.) or any Subsidiary is, and no legal or beneficial interest in a stockholder of the Company or any Subsidiary is or will be held, directly or indirectly, by, a “foreign person” under the International Foreign Investment Survey Act of 1976, the Agricultural Foreign Investment Disclosure Act of 1978, the Foreign Investments in Real Property Tax Act of 1980, the amendments of such Acts or regulations promulgated pursuant to such Acts.

        2.21.    Title to Property and Collateral. As of the Closing Date, the Company has good and marketable title in fee simple to such of the Property (as defined in the Deed of Trust) as constitutes real property and good and merchantable title to the Collateral (as defined in the Security Agreement) subject in each case to no Liens other than the Liens of the Collateral Documents and Permitted Encumbrances.

        2.22.    Additional Representations and Warranties. As of the date hereof, the representations and warranties contained in the Borrower’s Affidavit or any other document executed herewith are true and correct.

SECTION 3.    CONDITIONS OF THE LOAN.

        Your obligation to make the loan, as provided in Section 1.2, on the Closing Date shall be subject to the conditions precedent that you have received on or before the Closing Date in form and substance satisfactory to your counsel, such assurances and evidence as you may require of the performance by the Company of all its agreements theretofore to be performed hereunder, to the accuracy of its representations and warranties herein contained and to the satisfaction, prior thereto or concurrently therewith, of the following further conditions:

Loan Agreement, Page 12

        3.1.    Opinion of Company’s Counsel. You shall have received on the Closing Date from Young Williams, P.A., 2000 Amsouth Plaza, Jackson, Mississippi 39201, counsel for the Company, and from Florida counsel for the Company, favorable opinions as to such matters incident to the transactions contemplated by this Agreement as you may reasonably request.

        3.2.    Legality. You shall have satisfied yourself that the loan being made by you on the Closing Date shall qualify on the Closing Date as a legal investment for life insurance companies under the New York Insurance Law (without resort to any provision of such law, such as Section 1405(a)(8) thereof, permitting limited investments by you without restriction as to the character of the particular investment) and such loan shall not subject you to any penalty or other onerous condition under or pursuant to any applicable law or governmental regulation; and you shall have received such certificates or other evidence as you may reasonably request to establish compliance with this condition.

        3.3.    Proceedings. All proceedings to be taken in connection with the transactions contemplated by this Agreement and the Collateral Documents, and all documents incidental thereto, shall be satisfactory in form and substance to you; and you shall have received copies of all documents which you may reasonably request in connection with said transactions and copies of the records of all corporate proceedings in connection therewith in form and substance satisfactory to you.

        3.4.    Representations True; No Default. The representations and warranties of the Company in this Agreement and in the Collateral Documents shall be true on and as of the Closing Date with the same effect as though such representations and warranties had been made on and as of the Closing Date; on the Closing Date no event which is, or with notice or lapse of time or both would be, an Event of Default shall have occurred and be continuing; and you shall have received an affidavit, dated the Closing Date, of the Company to each such effect.

        3.5.    Collateral Documents. You shall have received on the Closing Date fully executed original counterparts of each of the Collateral Documents.

        3.6.    Opinion of Lender’s Counsel. You shall have received on the Closing Date from Lowndes, Drosdick, Doster, Kantor & Reed, P.A., 215 North Eola Drive, Orlando, Florida 32801, counsel for you, a favorable opinion as to such matters incident to the transactions contemplated by this Agreement as you may reasonably request.

        3.7.    Environmental Audit Results. The results of the environmental audit of the Facility, and any remedial action required to be taken by the Company as a result of such audit, are complete and satisfactory to you.

        3.8.    INTENTIONALLY DELETED.

        3.9.    Title Requirements. You shall be furnished on the Closing Date with a ALTA-1970 Form of mortgagee title insurance policies issued by a title insurance company acceptable to you insuring that the Deed of Trust (and/or any Leasehold Assignments) is a first lien and that title to the Facility is not subject to other liens or assessments except for the Deed of Trust (and/or any Leasehold Assignments) and the other recorded documents securing the Loan, and such encumbrances as agreed to in writing by you and the Company and insuring the Deed of Trust (and/or any Leasehold Assignments) for $28,000,000.00 in the aggregate. The title insurance policy shall contain no exceptions other than those which are approved and accepted by you. The title insurance is to contain such endorsements as may be required by you and shall be paid for by the Company. You shall also be furnished with such UCC searches as you may require relating to the Company and the Facility. Any such objectionable filings contained therein shall be released or amended as you may reasonably require.

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SECTION 4.    REPRESENTATION OF LENDER.

        4.1.    Acquisition for Investment. This Agreement is made with you in reliance upon your representation to the Company (which, by your acceptance hereof, you confirm) that you are acquiring the Note for your own account for the purpose of investment and not with a view to, or for sale in connection with, the distribution thereto; provided, however, that the disposition of your property shall at all times be within your control. In the event that you do sell or otherwise dispose of the Note, you agree to notify the Company at least sixty (60) days in advance of any such sale or disposition.

SECTION 5.    FINANCIAL STATEMENTS; COMPLIANCE CERTIFICATES; ADDITIONAL INFORMATION; AND INSPECTION.

        5.1.    Financial Statements and Reports. From and after the date hereof and so long as you (or a nominee designated by you) shall hold the Note, the Company will deliver to you in duplicate:

        (a)     as soon as practicable after the end of each quarter in each fiscal year of the Company, and in any event within 60 days after the end of each quarter in each fiscal year of the Company, the interim consolidated statements of earnings, stockholders’ equity and cash flows of the Company and its Subsidiaries for such period and for that part of the fiscal year ended with such period and the consolidated balance sheet of the Company and its Subsidiaries as at the end of such period, all in reasonable detail, prepared in conformity with generally accepted accounting principles applied on a basis consistent with that of previous years (except as otherwise stated therein or in the notes thereto) and certified by the Chief Financial Officer of the Company (or in his or her absence, the Chief Executive Officer) as presenting fairly the financial condition and results of operations of the Company and its Subsidiaries as at the end of and for the fiscal periods to which they relate, subject to the Company’s year-end adjustments;

        (b)     as soon as practicable after the end of each fiscal year, and in any event within 90 days after the end of each fiscal year, the consolidated balance sheet and related consolidated statements of earnings, stockholders’ equity and cash flows of the Company and its Subsidiaries as of the end of and for such year, setting forth in each case in comparative form the corresponding figures of the previous fiscal year, all in reasonable detail, prepared in conformity with generally accepted accounting principles applied on a basis consistent with that of previous years (except as otherwise stated therein or in the notes thereto) and accompanied by a report or opinion of independent certified public accountants selected by the Company stating that such financial statements present fairly the consolidated financial condition and results of operations and changes in financial position of the Company and its Subsidiaries in accordance with generally accepted accounting principles consistently applied (except for changes with which such accountants concur) and that the examination of such accountants in connection with such financial statements has been made in accordance with generally accepted auditing standards;

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        (c)     concurrently with the financial statements delivered pursuant to Section 5.1(b), the written statement of said accountants, which accountants shall be reasonably acceptable to you, that in the ordinary course of making their normal examination necessary for their report or opinion on said financial statements they have obtained no knowledge of any Event of Default or event which, with notice or lapse of time or both, would become an Event of Default or, if such accountants shall have obtained knowledge of any such Event of Default or event, they shall disclose in such statement the Event or Events of Default and/or such event or events and the nature and status thereof, but such accountants shall not be liable, directly or indirectly, to anyone for any failure to obtain knowledge of any such Event of Default or event;

        (d)     concurrently with the financial statements delivered pursuant to Sections 5.1(a) and 5.1(b), a certificate of the Chief Financial Officer of the Company (or in his or her absence, the Chief Executive Officer) (1) setting forth, as of the end of the preceding fiscal year, the extent to which the Company and its Subsidiaries have complied with the requirements of Sections 8.1 through 8.16, inclusive, including in each case a brief description, together with all necessary computations, of the manner in which such compliance was determined and the respective amounts as of the end of or for such fiscal year of Consolidated Tangible Net Worth pursuant to Section 8.2, Total Funded Debt and Total Capitalization pursuant to Section 8.1, cash flow coverage ratio pursuant to Section 8.4, and the amount available for dividends pursuant to Section 8.10, (2) stating that a review of the activities of the Company and its Subsidiaries during the preceding fiscal year has been made under his or her supervision to determine whether the Company has fulfilled all of its obligations under this Agreement, the Collateral Documents and the Note, (3) stating that, to the best of his or her knowledge, the Company is not and has not been in default in the fulfillment of any of the terms, covenants, provisions or conditions hereof and thereof and no Event of Default or event which, with notice or lapse of time or both, would become an Event of Default exists or existed or, if any such default or Event of Default or event exists or existed, specifying such default, Event of Default or event and the nature and status thereof, and (4) giving, in the event of the formation or acquisition of a Subsidiary during the preceding fiscal year, the name of such Subsidiary, its jurisdiction of incorporation and a brief description of its business;

        (e)     as soon as practicable, copies of all financial statements, proxy statements and reports as the Company or its Subsidiaries shall send or make available generally to their stockholders and, if requested by you, to any governmental agency or agencies and regular periodic reports, if any, which the Company or its Subsidiaries may file with any governmental agency or agencies;

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        (f)     promptly upon any officer of the Company becoming aware of the existence of a condition, event or act which constitutes an Event of Default or an event of default under any other evidence of Indebtedness of the Company or of any Subsidiary, or an event which, with notice or lapse of time or both, would constitute such an Event of Default or event of default, a written notice specifying the nature and period of existence thereof and what action the Company or such Subsidiary, as the case may be, is taking or proposes to take with respect thereto;

        (g)     promptly upon any officer of the Company becoming aware of the occurrence of any (1) “reportable event,” as defined in Section 4043(b) of ERISA, or (2) non-exempted “prohibited transaction,” as defined in Sections 406 and 408 of ERISA and Section 4975 of the Internal Revenue Code of 1986, as amended in connection with any “employee pension benefit plan,” as defined in Section 3 of ERISA, or any trust created thereunder, a written notice specifying the nature thereof, what action the Company or such Subsidiary is taking or proposes to take with respect thereto and, when known, any action taken by the Internal Revenue Service or the Pension Benefit Guaranty Corporation with respect thereto;

        (h)     promptly upon any officer of the Company becoming aware of the occurrence of (1) any surrender of assets of the Company or its Subsidiaries in satisfaction of any Indebtedness, (2) the dissolution of any material operating partnership or real estate ownership partnership of the Company or its Subsidiaries, (3) the termination or expiration of any material lease of real property to which the Company or its Subsidiaries is lessee, or (4) the commencement of any litigation, including any arbitration or mediation, and of any proceedings before any governmental agency which could materially and adversely affect the business, properties, prospects or financial condition of the Company and its Subsidiaries taken as a whole (including any such action commenced by counterclaim), written notice specifying the nature thereof and what action the Company or such Subsidiary, as the case may be, is taking with respect thereto; and

        (i)     such other information as to the business and properties of the Company and its Subsidiaries, including consolidating financial statements of the Company and its Subsidiaries, and financial statements and other reports filed with any governmental department, bureau, commission or agency, as you may from time to time reasonably request.

        5.2.    Inspection. From and after the date hereof and so long as you (or a nominee designated by you) shall hold the Note, you shall have the right to (i) visit and inspect, at your expense, any of the properties, all at such reasonable times and as often as you may reasonably request, of the Company and its Subsidiaries, to examine their books of account and those of their Subsidiaries, and to discuss the affairs, finances and accounts of the Company or any Subsidiary with each of their officers and managers and independent public accountants, and (ii) contact such third parties doing business with the Company and its Subsidiaries, and to engage in such other auditing procedures as you deem reasonable to ensure the validity of your security interests or the accuracy of the Company’s representations, warranties and certifications. In connection with such inspections, you and your engineers, contractors and other representatives shall have the right to perform such environmental audits and other environmental examinations of the Facility as you deem necessary or advisable from time to time. Such environmental audits and examinations shall be at the Company’s cost and expense.

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SECTION 6.    PRINCIPAL PAYMENT OF NOTE.

        6.1.    Principal Payments — Mandatory and Optional Prepayment. (A) The Company covenants and agrees that it will monthly pay $150,000.00 principal on the unpaid Note on the first day of each month, commencing January 1, 2007 to and including November 1, 2020. Such mandatory principal payments on the Note shall be applied to the outstanding Base Rate Tranche and any Swapped Rate Tranches in proportion to the outstanding principal balances of each at the time of each such payment. All remaining principal thereafter shall be paid December 1, 2020. All mandatory principal payments pursuant to this Section 6.1 shall be made together with interest accrued on the unpaid balance of the Note as required in the Note, but without prepayment premium.

        (B)     The Company may, at its option, prepay the Base Rate Tranche in whole or in part (in integral multiples of $10,000) at par on the first day of any Base Rate Interest Period more than twelve (12) months after the date hereof. The Swapped Rate Tranche may be prepaid in whole or in part (in integral multiples of $10,000) on the first day of any month more than twelve (12) months after the date hereof in an amount equal to the Prepayment Price, as hereafter defined, together with accrued interest as required in the Note to the date of such prepayment, provided the Company shall give notice of any such prepayment to the holder of the Note not less than 30 nor more than 60 days prior to the date fixed in such notice for prepayment (the “Prepayment Date”). Principal shall be applied to the outstanding principal balance in the inverse order of maturity. No other prepayments of the Note shall be permitted.

        6.2.    Prepayment of Note Upon Change of Control. In the event that a Change of Control Date (as hereinafter defined) shall occur, the Company will, within 10 days after such Change of Control Date, give you written notice thereof and shall describe in reasonable detail the facts and circumstances giving rise thereto. Upon the occurrence of a Change of Control Date, the Company will prepay, if you shall so request, all of the Note which you then hold at the Prepayment Price (as hereinafter defined) plus interest accrued to the date of prepayment. Said request (the “Prepayment Notice”) shall be made by you in writing not later than the later of (a) 60 days after the Change of Control Date and (b) 50 days after you receive notice of the Change of Control Date, and said request shall specify the date (also referred to as the “Prepayment Date”) upon which the Company shall prepay the Note held by you, which date shall be not less than 30 days nor more than 60 days from the date of the Prepayment Notice.

        The term “Change of Control Date” shall mean the first day on which any Person, or group of related Persons, (i) shall acquire beneficial ownership of fifty percent (50%) or more of the Voting Stock or partnership or limited liability company interests of the Company, as the case may be; (ii) shall acquire all or substantially all of the assets of the Company; or (iii) shall acquire beneficial ownership of 50% or more of the outstanding Voting Stock or other interest of an entity with or into which the Company has merged or consolidated, whether pursuant to a statutory merger or consolidation or otherwise. A transfer of such shares of stock or other interest under the terms of a will or by intestate succession shall not be deemed a transfer under the terms of this paragraph. For purposes of this Section 6.2 only, the term “Person” shall not include Fred Adams, Jr. or any members of his immediate family within the following categories: a son, daughter or spouse or descendant of either; a stepson, stepdaughter, stepfather or stepmother; father, mother, or ancestor of either; or a spouse; and with respect to Hillandale LLC, the term “Person” shall not include Cal-Maine Foods, Inc. It is expressly understood that for the purpose of determining any of the foregoing relationships, a legally adopted child of a person is considered a child of such person by blood.

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        6.3.    Prepayment Price. On any Prepayment Date, the Company shall prepay the Note held by you at the Prepayment Price plus interest accrued thereon to the Prepayment Date. Payment of the Prepayment Price shall be made as provided in Section 11.5.

        The Prepayment Price shall be determined by you in good faith, as of 5:00 p.m., New York time, on the fifth Business Day prior to the Prepayment Date. Such Prepayment Price, as calculated by you, will be binding upon the Company, absent manifest error. Promptly upon such determination you shall notify the Company in writing of the amount of such Prepayment Price, setting forth in reasonable detail the computation thereof.

        The term “Prepayment Price” shall mean the greater of (x) par, or (y) the sum of the values of (1) each remaining mandatory principal payment prior to the next interest rate adjustment date, if any, or maturity, as the case may be, and (2) the principal payment at maturity (if there is an interest rate adjustment date, the entire outstanding principal balance as of such date shall be deemed due and payable solely for purposes of determining the Prepayment Price) (each such mandatory payment and such payment at maturity being herein referred to as a “Payment”) plus the value of all related scheduled interest payments on the Note to be prepaid during the period from the Prepayment Date to the date of each Payment. The value of each Payment and such related scheduled interest payments shall be determined by discounting, at the applicable Treasury Rate, such Payment and such related scheduled interest payments from the respective scheduled payment dates of such Payment and such related scheduled interest payments to the Prepayment Date. The Treasury Rate with respect to each Payment and such related scheduled interest payments is the yield which shall be imputed, by linear interpolation, from the current weekly yield of those United States Treasury Notes having maturities as close as practicable to the scheduled payment date of the Payment, as published in the most recent Federal Reserve Statistical Release H.15 (519) or any successor publication thereto.

        The Company hereby expressly acknowledges and agrees (i) that the prepayment premium provided for herein is reasonable, (ii) that legal counsel of the Company’s own choosing has advised the Company with respect to such prepayment premium, (iii) that any prepayment made at a time when it is otherwise restricted under the Note will result in material loss and damage to the holder of the Note, requiring such holder to secure reinvestments at additional costs which might not produce the same economic benefit to such holder as the economic benefits under the Note, (iv) that the foregoing prepayment premium is a reasonable estimate of such loss and damage, and (v) the Company shall be estopped hereafter from claiming differently as to any of the foregoing. The foregoing prepayment premium is not intended to be a penalty, but instead shall serve as liquidated damages to provide you with the benefit of your bargain.

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        6.4.    Interest After Date Fixed for Principal Payment. In the event the Company shall fail to pay the Note or any payment owing in respect of the Note according to the terms thereof and hereof (inclusive of any other permitted payments of which the Company has notified you) within fifteen (15) days of the date fixed for such principal payment, such payment shall bear interest at the Overdue Interest Rate from and after the sixteenth (16th) day following such date until paid and, so far as may be lawful, any overdue installment of interest shall bear interest at said rate from and after said sixteenth (16th) day until paid. Until the earlier of such sixteenth (16th) day or the date payment is received by you, interest shall continue to accrue at the current interest rate on the outstanding principal balance.

SECTION 7.    AFFIRMATIVE COVENANTS.

        The Company covenants and agrees that so long as the Note shall be outstanding:

        7.1.    To Pay Note. The Company will punctually pay or cause to be paid the principal and interest (and prepayment premium, if any) to become due in respect of the Note according to the terms thereof and hereof (inclusive of any other permitted payments of which the Company has notified you).

        7.2.    Maintenance of Office. The Company will maintain an office at 3320 Woodrow Wilson Drive, Jackson, Mississippi 39207 (or such other place in the United States of America as the Company may designate in writing to the holder of the Note).

        7.3.    To Keep Books. The Company will, and will cause each of its Subsidiaries to, keep proper books of record and account in accordance with generally accepted accounting principles.

        7.4.    Payment of Taxes; Corporate Existence; Maintenance of Properties. The Company will, and will cause each of its Subsidiaries to,

        (a)     pay and discharge promptly all taxes, assessments and governmental charges or levies imposed upon them, their income or profits or their property before the same shall become in default, as well as all lawful claims and liabilities of any kind (including claims and liabilities for labor, materials and supplies) which, if unpaid, might by law become a Lien upon its property; provided, however, that neither the Company nor any Subsidiary shall be required to pay any such tax, assessment, charge, levy or claim if the amount, applicability or validity thereof shall currently be contested in good faith by appropriate proceedings and if the Company or such Subsidiary shall have set aside on its books reserves in respect thereof (segregated to the extent required by generally accepted accounting principles) deemed adequate in the opinion of the Board of Directors or general partner or limited liability company manager;

        (b)     subject to Section 8.6A, do all things necessary to preserve and keep in full force and effect their corporate or partnership or limited liability company existence, rights (charter and statutory) and franchises; provided, however, that neither the Company nor any Subsidiary shall be required to preserve any right or franchise if the Board of Directors or general partner or limited liability company manager shall reasonably determine that the preservation thereof is no longer desirable in its conduct of business; and

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        (c)     maintain and keep all of their properties used or useful in the conduct of their business in good condition, repair and working order and supplied with all necessary equipment and make all necessary repairs, renewals, replacements, betterments and improvements thereof, all as may be necessary so that the business carried on in connection therewith may be properly and advantageously conducted at all times; provided, however, that nothing in this Section 7.4(c) shall prevent the Company or any Subsidiary from discontinuing the operation and maintenance of any of their properties (other than Collateral), if such discontinuance is, in the judgment of the Company or such Subsidiary, immaterial to the Company as a whole and desirable in the conduct of the business of the Company or such Subsidiary.

        7.5.    To Insure. The Company will, and will cause each of its Subsidiaries to (in addition to the insurance required to be maintained pursuant to Paragraph 1.05 of the Deed of Trust and Section 2(e) of the Security Agreement):

        (a)     keep all of their insurable properties owned by them insured against all risks usually insured against by persons operating like properties in the same geographical areas where the properties are located, all in amounts sufficient to prevent the Company or such Subsidiary, as the case may be, from becoming a coinsurer within the terms of the policies in question, but in any event in amounts not less than 100% of the then full replacement value thereof;

        (b)     maintain public liability insurance against claims for personal injury, death or property damage suffered by others upon or in or about any premises occupied by it or occurring as a result of its maintenance or operation of any airplanes, automobiles, trucks or other vehicles or other facilities (including, but not limited to, any machinery used therein or thereon) or as the result of the use of products sold by it or services rendered by it;

        (c)     maintain such other types of insurance with respect to its business as is usually carried by persons of comparable size engaged in the same or similar business and similarly situated; and

        (d)     maintain all such worker’s compensation or similar insurance as may be required under the laws of any State or jurisdiction in which it may be engaged in business.

        All insurance for which provision has been made in Section 7.5(b) and Section 7.5(c) shall be maintained in at least such amounts as such insurance is usually carried by persons of comparable size engaged in the same or a similar business and similarly situated; and all insurance herein provided for shall be effected under a valid and enforceable policy or policies issued by insurers of recognized responsibility, except that the Company or such Subsidiary may effect worker’s compensation or other similar insurance in respect of operations in any State or other jurisdiction either through an insurance fund operated by such State or other jurisdiction or by causing to be maintained a system or systems of self-insurance which are in accord with applicable laws.

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SECTION 8.    RESTRICTIVE COVENANTS.

        The Company covenants and agrees that so long as the Note shall be outstanding:

        8.1.    Additional Funded Debt. The Company and its Subsidiaries shall not, directly or indirectly, create, assume, incur, become liable for or with respect to any additional Funded Debt unless, immediately thereafter, the ratio of Total Funded Debt to Total Capitalization is not greater than 60%. For purposes of the calculations required under this Section 8.1, it shall be understood and agreed that guarantees of Debt owed by Delta Egg Farm, LLC given by the Company shall be included in Total Funded Debt.

        8.2.    Consolidated Tangible Net Worth. The Company and its Subsidiaries shall not permit the Consolidated Tangible Net Worth to be less than Ninety Million Dollars ($90,000,000.00) plus forty-five percent (45%) of the Company’s cumulative Net Income determined on a consolidated basis in accordance with GAAP for each Fiscal Year to have completely elapsed as of the date of determination, commencing with the Fiscal Year ending May 28, 2005, but specifically excluding any annual net losses reported by the Company.

        8.3.    Current Ratio. The Company and its Subsidiaries will not permit the ratio of Consolidated Current Assets to Consolidated Current Liabilities (excluding Consolidated Current Deferred Taxes) to be less than 1.25:1.0.

        8.4.    Cash Flow Coverage. The Company and its Subsidiaries shall not at any time permit the ratio of Operating Cash Flow to Fixed Charges to be less than 1.25:1.0.

        8.5.    Restricted Investments; Pledge of Stock.

        (A)     The Company or any Subsidiary shall not make any Restricted Investments; provided, however, so long as no Event of Default is then existing or would result therefrom, the Company or any Subsidiary may make Permitted Investments. The Company shall not purchase or otherwise acquire for value any of its capital stock now or hereafter outstanding, or permit any of its Subsidiaries to purchase or otherwise acquire for value any stock of the Company; provided that the Company may, as long as no Event of Default or event that with the giving of notice or lapse of time or both would be an Event of Default exists or would result, purchase its outstanding common shares in any Fiscal Year in an aggregate amount not to exceed in each fiscal year: (A) Five Hundred Thousand and No/100 Dollars ($500,000), if at the time of each such purchase the ratio of Total Funded Debt to Total Capitalization after giving pro forma effect to the purchase is greater than or equal to 60% and (B) One Million and No/100 Dollars ($1,000,000), if at the time of such purchase the ratio of Total Funded Debt to Total Capitalization after giving pro forma effect to the purchase is less than 60%; provided that if during any fiscal year the ratio of Total Funded Debt to Total Capitalization increases so it equals or exceeds 60%, purchases made up to that point under this clause (B) shall be permitted and any additional purchases shall only be made under the permissions of clause (A) until the ratio is less than 60%. In addition, Borrower may, as long as no Event of Default or event that with the giving of notice or lapse of time or both would be an Event of Default exists or would result, purchase any amount of its outstanding common shares in any Fiscal year if, after giving effect to each such purchase, the ratio of Total Funded Debt to Total Capitalization would be less than 55%; provided that if during any fiscal year the ratio of Total Funded Debt to Total Capitalization increases to 55% or greater, prior purchases made under the provisions of this paragraph shall be permitted and any additional purchases shall only be made under the permissions of clauses (A) and (B) in the previous sentence until the ratio is less than 55%.

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        (B)     Notwithstanding any subsequent transfer or transfers to members of his immediate family (as defined on Section 6.2), more than fifty percent (50%) of the Company’s outstanding Voting Stock currently owned by Fred Adams, Jr. shall remain free and clear of any and all Liens at all times. All of the membership interests in Hillandale, LLC shall remain free and clear of any and all Liens at all times.

        (C)     Except as set forth in Section 8.5A, above, Cal-Maine Foods, Inc. shall timely complete its acquisition of all of the membership interests in Hillandale, LLC.

        8.6.    Merger, Consolidation, Sale or Lease.

        (A)     The Company will not consolidate with or merge into any Person, or permit any Person to merge into it, or sell, transfer or otherwise dispose of all or substantially all of their properties and assets, unless:

        (1)     the successor formed by or resulting from such consolidation or merger (if other than the Company) or the transferee to which such sale, transfer or other disposition shall be made shall be a solvent corporation duly organized and existing under the laws of the United States of America or any State thereof and authorized to do business in the States of Mississippi, Florida, Alabama, Georgia and Texas;

        (2)     the due and punctual performance and observance of all the obligations, terms, covenants, agreements and conditions of this Agreement, the Collateral Documents and the Note to be performed or observed by the Company shall, by written instrument furnished to the holder of the Note, be expressly assumed by such successor (if other than the Company) or transferee; and

        (3)     at the time of such transaction and assumption, and immediately after giving effect thereto, no Event of Default or event which, with notice or lapse of time or both, would constitute an Event of Default shall have occurred and be continuing.

        (B)     Except as permitted in Section 8.6A above, the Company will not, and will not permit any Subsidiary to, sell, assign, transfer or otherwise dispose of (other than in the ordinary course of business) any of its properties and assets to any Person, provided, however, the Company may, and may permit its Subsidiaries to, sell, assign, transfer or otherwise dispose of no more than fifteen percent (15%) of its Consolidated Assets in any one fiscal year if at the time of such transaction or transactions, and immediately after giving effect thereto, no Event of Default or event which, with notice or lapse of time or both, would constitute an Event of Default shall have occurred and be continuing, and provided further that no Collateral shall be part of such assets sold, assigned, transferred or disposed.

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        8.7.    Transactions with Affiliates. The Company will not, and will not permit any Subsidiary to, engage in any transaction with an Affiliate on terms more favorable to the Affiliate than would have been obtainable in arm’s length dealing in the ordinary course of business with a Person not an Affiliate. The Company agrees that, to the extent there are any inter-company loans involving the Company or any Subsidiary on a date on which an Event of Default exists, no payment of any amounts owing in connection therewith may be made until the earlier of your waiver of such Event of Default or the repayment in full of all amounts owing to you in connection with the Loan. To the extent any amounts are received in any manner whatsoever in connection with such inter-company loans by an obligee thereof during the period described in the immediately preceding sentence, such amounts shall be held in trust for and paid over to you until you are in receipt of all amounts owing to you in connection with the Loan. For purposes of this Section 8.7 only, the term “Affiliates” shall exclude any wholly-owned Subsidiary of the Company.

        8.8.    Encumbrances On and Transfers of the Collateral. Except for Permitted Encumbrances, the Company and its Subsidiaries will not create, incur, assume or suffer to exist any Lien on any of the Collateral or any interest therein. Except as permitted by Sections 8.6A and 8.6B hereof, the Company and its Subsidiaries will not sell, convey, lease, assign or otherwise transfer all or any of the Collateral or any interest therein, whether voluntarily or by operation of law. In addition, and notwithstanding anything to the contrary in any security agreement or other instrument securing real property, the Company may sell or otherwise dispose of, free from such liens, furniture, furnishings, equipment, tools, appliances, machinery, fixtures, or appurtenances subject to such liens, which may become worn out, undesirable, obsolete, disused or unnecessary for use in the operation of the Facility not exceeding in value at the time of disposition thereof Two Hundred Fifty Thousand Dollars ($250,000.00) for any single transaction, or a total of Five Hundred Thousand Dollars ($500,000) in any one Fiscal Year, upon replacing the same by, or substituting for the same, other furniture, furnishings, equipment, tools, appliances, machinery, fixtures, or appurtenances not necessarily of the same character, but of at least equal value to the Company and costing not less than the amount realized from the property sold or otherwise disposed of, which shall forthwith become, without further action, subject to such liens and security interests.

        8.9.    Capital Expenditures. The Company shall not make, nor will it permit any Subsidiary to make, any expenditures for fixed or capital assets but excluding expenditures for rolling stock which would cause the aggregate of all such expenditures made by the Company and its Subsidiaries in any period of four (4) consecutive fiscal quarters to exceed the consolidated depreciation of the Company and the Subsidiaries for such period. For purposes of determining total fixed or capital assets under this Section 8.9 only, assets acquired by Cal-Maine Foods, Inc. through its recent acquisition of membership interests in Hillandale, LLC shall be excluded.

        8.10.    Distributions. The Company shall not make, or incur any liability to make, any distributions and/or dividends if either the Loan is in default or if such distributions and/or dividends would give rise to an Event of Default.

        8.11.    Fiscal Year and Tax Status. Neither the Company nor any Subsidiary shall change its Fiscal Year without prior written notice to you.

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        8.12.    Investments in Other Persons. Neither the Company nor its Subsidiaries shall make any loan or advance to, or investment in, any other Person, or purchase or otherwise acquire any shares of capital stock, obligations or other securities of, or make any capital contribution to, or otherwise invest in, any other Person, or acquire all or substantially all of the assets or properties of any other Person, except for Permitted Investments.

        8.13.    Sale and Leaseback Transactions. The Company and its Subsidiaries will not enter into any sale and leaseback transactions more than 180 days after the date of acquisition or occupancy of such asset, whichever shall be the later to occur, with the intention of leasing it back except

        (a)     where the lease, including renewals, does not exceed three years;

        (b)     where the transaction represents a sale by an Affiliate to the Company or by the Company to an Affiliate; or

        (c)     where the proceeds of the sale of the assets to be leased are at least equal to their Fair Market Value and the proceeds are applied to the purchase or acquisition (or, in the case of real property, the construction) of assets to be used in the Company’s business or to the retirement of Funded Debt.

        8.14.    Inconsistent Agreements. The Company and its Subsidiaries shall not enter into any agreement containing any provision which would be violated or breached by the Loan or by the performance by the Company of its obligations hereunder or under the Note.

        8.15.    Change in Business or Accounting. The Company shall not make any material change in the nature or conduct of its business, or make or permit any significant change in accounting policies or reporting practices except for any such change required or permitted by GAAP or the Internal Revenue Service.

        8.16.    Charter and Bylaws. The Company will not amend, modify or change in any material manner the organizational documents or bylaws of the Company without your prior written consent.

SECTION 9.    DEFINITIONS.

        For all purposes of this Agreement, except as otherwise expressly provided or unless the context otherwise requires:

        “Affiliate” means any Person which, directly or indirectly, controls or is controlled by or is under common control with the Company or any Subsidiary or which beneficially owns or holds or has the power to direct the voting power of 5% or more of any class of Voting Stock or other equity interest of the Company or any Subsidiary or which has 5% or more of its Voting Stock (or in the case of a Person which is not a corporation, 5% or more of its equity interest) beneficially owned or held, directly or indirectly, by the Company or any Subsidiary. For purposes of this definition, “control” means the power to direct the management and policies of a Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms “controlling” and “controlled” have meanings correlative to the foregoing.

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        “Board of Directors” means the board of directors of the Company or of a Subsidiary so specified or indicated by the context or, if duly authorized to exercise the power of the Board of Directors, any duly authorized committee thereof.

        “Business Day” shall mean any day on which banks are required to be open to carry on their normal business in the State of New York.

        “Capital Lease” means and includes at any time any lease of property, real or personal, which in accordance with GAAP would at such time be required to be capitalized on a balance sheet of the lessee.

        “Capital Lease Obligation” means at any time the capitalized amount of the rental commitment under a Capital Lease which in accordance with GAAP would at such time be required to be shown on a balance sheet.

        “Collateral” means all property and assets, and proceeds thereof, subjected, or intended to be subjected, at any time to the Liens of any of the Collateral Documents.

        “Company” shall mean, individually and collectively, Cal-Maine Foods, Inc., a Delaware corporation, and Hillandale, LLC, a Florida limited liability company, and, subject to Section 8.6A hereof, their respective successors and assigns.

        “Consolidated Assets” means, as of the date of determination thereof, the aggregate of all assets which in accordance with GAAP would be so classified and appear as assets on the consolidated balance sheet of the Company and its Subsidiaries.

        “Consolidated Current Assets” means, as of the date of determination thereof, the aggregate of all assets which in accordance with GAAP would be so classified and appear as current assets on the consolidated balance sheet of the Company and its Subsidiaries.

        “Consolidated Current Deferred Taxes” means, as of the date of determination thereof, the aggregate of all current deferred taxes which, in accordance with GAAP, would be so classified and appear as current deferred taxes on the consolidated balance sheet of the Company and its Subsidiaries.

        “Consolidated Current Liabilities” means, as of the date of determination thereof, the aggregate of all liabilities which in accordance with GAAP would be so classified and appear as current liabilities on the consolidated balance sheet of the Company and its Subsidiaries.

        “Consolidated Tangible Net Worth” means, as of any date of determination, the sum of the capital stock (including nonredeemable preferred stock but subtracting treasury stock) and additional paid-in capital plus retained earnings (or minus accumulated deficit) of the Company and its Subsidiaries, on a consolidated basis determined in conformity with GAAP, minus intangible assets such as organization costs and franchise costs, intangible assets recorded in accordance with Financial Accounting Standards No. E7, deferred debits not relating to future tax benefits and all Goodwill, trade names, trademarks, patents and other like intangibles (except for the Company’s investment in “Eggland’s Best”).

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        “Contingent Liabilities” means any agreement, undertaking or arrangement by which any Person (i) guarantees, endorses or otherwise becomes or is contingently liable upon (by direct or indirect agreement, contingent or otherwise, to provide funds for payment, to supply funds to, or otherwise to invest in, a debtor, or otherwise to assure a creditor against loss) the debt, obligation or other liability of any other Person (other than by endorsements of instruments in the course of collection), or (ii) guarantees the payment of dividends or other distributions upon the shares of any other Person, or (iii) undertakes or agrees (contingently or otherwise) (a) to purchase, repurchase or otherwise acquire any Debt, obligation or liability or any security therefor, or (b) to provide funds for the payment or discharge thereof (whether in the form of loans, advances, stock purchases, capital contributions or otherwise), or (c) to make- payment other than for values received, or (d) to maintain solvency, assets, level of income, or other financial condition. The amount of any Person’s obligation under any Contingent Liability shall (subject to any limitation set forth therein) be deemed to be the outstanding principal amount (or maximum permitted principal amount, if larger) of the Debt, obligation or other liability guaranteed or supported thereby.

        “Debt” of any Person means: (i) all obligations of such Person for borrowed money and all obligations evidenced by bonds, debentures, notes, acceptances or other similar instruments; (ii) all obligations relative to the face amount of all letters of credit, if drawn, and banker’s acceptances issued for the account of such Person; (iii) all obligations as lessee under leases which have been or should be, in accordance with GAAP, recorded as capitalized lease liabilities; (iv) all obligations of such Person to pay the deferred purchase price of property or services (other than accounts payable arising in the ordinary course of business payable on terms customary in the trade), (v) indebtedness secured by a Lien on property owned or being purchased by such Person whether or not such indebtedness shall have been assumed by such Person or is limited in recourse; (vi) all Contingent Liabilities of such Person in respect of any Debt of any Person, and (vii) any hedging obligations, if and to the extent such obligations must appear as a liability upon a balance sheet of such Person prepared in accordance with GAAP, consistently applied.

        “Default” means any event which, with the giving of notice or the passage of time or both, would constitute, become or mature into an Event of Default.

        “ERISA” means the Employee Retirement Income Security Act of 1974, as amended.

        “Events of Default” has the meaning specified in Section 10.1.

        “Fair Market Value” means, with respect to any asset, the value of the consideration obtainable in a sale of such asset in the open market at a specified date assuming a sale by a willing seller to a willing purchaser dealing at arm’s length and arranged in an orderly manner over a reasonable period of time having regard to the nature and characteristics of such asset.

        “Fiscal Year” means the 12 consecutive calendar months ending on the Saturday nearest May 31 of each calendar year; references to a Fiscal Year with a number corresponding to any calendar year (e.g., the “1997 Fiscal Year”) refer to the Fiscal Year ending on the Saturday nearest May 31 of such calendar year.

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        “Fixed Charges” means, as of any date of determination, the sum of the following for the Company and the Subsidiaries (calculated without duplication on a consolidated basis) for the completed four quarter period immediately proceeding the date of determination or with respect to clause (ii) below, as of the date of determination: (i) all cash interest paid or payable for such period; (ii) the current maturities of long term Debt as carried on the Company’s consolidated balance sheet as of the date of determination (including payments made under capital leases); and (iii) all cash dividends paid on the capital stock of the Company for such period.

        “Funded Debt” of any Person means all Debt that matures more than one year from the date of determination or matures within one year from such date but is renewable or extendable, at the option of the debtor, to a date more than one year from such date or arises under a committed revolving credit or similar agreement that obligates the lender to extend credit during a period of more than one year from such date (in each case including amounts of Funded Debt required to be paid or prepaid within one year from the date of determination).

        “GAAP” means, as to a particular Person and at a particular time of determination, such accounting principles as, in the opinion of the independent public accountants regularly employed by such Person, conform at such time of determination to generally accepted accounting principles.

        “Goodwill” means, with respect to any Person for any period, the goodwill of such Person for such period determined in accordance with GAAP as in effect from time to time.

        “Indebtedness” means and includes (i) all indebtedness or obligations for money borrowed or for the purchase price of property (exclusive of orders or commitments made in the ordinary course of business for future delivery of goods or services prior to the time the obligation to pay becomes firm) and any notes payable and drafts accepted representing extensions of credit, whether or not representing indebtedness or obligations for money borrowed or for the purchase price of property, (ii) indebtedness or obligations secured by or constituting any Lien existing on property owned by the Person whose Indebtedness is being determined, whether or not the indebtedness or obligations secured thereby shall have been assumed, (iii) Capital Lease Obligations, (iv) guarantees and endorsements of (other than endorsements for purposes of collection in the ordinary course of business), and obligations to purchase goods or services for the purpose of supplying funds for the purchase or payment of, or measured by, indebtedness, liabilities or obligations of others (whether or not representing money borrowed) and other contingent obligations in respect of, or to purchase or otherwise acquire or service, indebtedness, liabilities or obligations of others (whether or not representing money borrowed) and (v) all indebtedness, liabilities or obligations (whether or not representing money borrowed) in effect guaranteed by an agreement, contingent or otherwise, to make a loan, advance or capital contribution to or other investment in the debtor for the purpose of assuring or maintaining a minimum equity, asset base, working capital or other balance sheet condition for any date, or to provide funds for the payment of any liability, dividend or stock liquidation payment, or otherwise to supply funds to or in any manner invest in the debtor for such purpose. A renewal or extension of any Indebtedness without increase in the principal amount thereof shall not be deemed to be the incurrence of the Indebtedness so renewed or extended. In case any corporation shall become a Subsidiary, such corporation shall be deemed to have incurred at the time it becomes a Subsidiary all Indebtedness of such corporation outstanding immediately thereafter.

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        “Lien” means any mortgage, lien, pledge, security interest, encumbrance or charge of any kind, whether or not consensual, any conditional sale or other title retention agreement or any Capital Lease.

        “Net Income” means, for any period, the net income (or loss) of such Person for such period (taken as a single accounting period) determined in conformity with GAAP, excluding (to the extent otherwise included therein) any gains or losses, together with any related provision for taxes, realized upon any sale of assets other than in the ordinary course of business.

        “Operating Cash Flow” means, as of any date of determination, the sum of (A) plus (B), with

        (A)     equal to the quotient obtained by dividing by 3 the sum of (i) the Net Income of the Company and the Subsidiaries determined on a consolidated basis for the completed twelve quarter period immediately preceding the date of determination plus (ii), to the extent deducted in determining Net Income, all cash franchise and income taxes paid or payable by the Company and the Subsidiaries during the completed twelve quarter period immediately preceding the date of determination and with

        (B)     equal to the sum of, but without duplication and only in each case to the extent deducted in determining Net Income, (i) depreciation and amortization expenses for the completed four quarter period immediately preceding the date of determination; plus (ii) all cash interest paid or payable by the Company and the Subsidiaries for the completed four quarter period immediately preceding the date of determination.

        “Overdue Interest Rate” means the lesser of (a) five percent (5%) per annum over the Base Rate in effect immediately prior to the time the Overdue Interest Rate is applicable, and (b) the maximum interest rate provided by law.

        “Permitted Encumbrances” means those Liens described on Exhibit C to the Deed of Trust.

        “Permitted Investments” means (i) investments in one or more Affiliates or any Person which, concurrently with such investment, becomes a Subsidiary or Affiliate, (ii) property to be used in the ordinary course of business; (iii) current assets arising from the sale of goods and services in the ordinary course of business; (iv) direct obligations of the United States of America, or any agency thereof fully guaranteed by the United States of America, provided that such obligations mature within one year from the date acquired; (v) certificates of deposit maturing within one year from the date acquired or money market accounts issued by a bank or trust company organized under the laws of the United States or any of its states, and having capital surplus and undivided profits aggregating at least $100,000,000 and maintaining an equivalent Standard & Poor’s Corporation (“S&P”) or Moody’s Investors Service, Inc. (“Moody’s) rating of “A”/“A2” or higher, (vi) commercial paper rated with the highest rating given by S&P or Moody’s and maturing not more than 270 days from the date acquired; (vii) certain issues of preferred stock known as “Dutch-Auction Preferred,” “Capital-Market Preferred,” “Remarked Preferred,” “Variable-Rate Preferred,” or similar terms, rated with the highest rating given by S&P or Moody’s; and (vii) purchases of substantially all the assets or properties of another Person.

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        “Person” includes an individual, a corporation, a partnership, a limited liability company, a joint venture, a trust, an unincorporated organization or a government or any agency or political subdivision thereof.

        “Restricted Investments” with respect to any Person means any investments which are not Permitted Investments.

        “Rolling Period” means, in any Fiscal Year, such fiscal quarter and the three preceding fiscal quarters.

        “Subsidiary” with respect to any Person means any corporation, association, partnership or other business entity of which more than 50% of the total voting power of shares of stock or other ownership interests entitled to vote in the election of directors, managers or trustees thereof is at the time owned or controlled, directly or indirectly, by any Person or one or more of the other Subsidiaries of that Person or a combination thereof.

        “Total Capitalization” means, as of any date of determination, the sum of (i) Consolidated Tangible Net Worth plus (ii) Total Funded Debt.

        “Total Consolidated Assets” means the sum of the assets of the Company and its Subsidiaries, on a consolidated basis determined in accordance with GAAP, consistently applied.

        “Total Funded Debt” means, as of any date of determination, the sum of all Funded Debt for the Company and its Subsidiaries on a consolidated basis.

        “Voting Stock”, as applied to the stock of any corporation, shall mean stock of any class or classes (however designated) having ordinary voting power for the election of a majority of the directors of such corporation, other than stock having such power only by reason of the happening of a contingency.

        All accounting terms used herein and not expressly defined in this Agreement shall have the meanings respectively given to them in accordance with GAAP as it exists at the date of applicability thereof.

SECTION 10.    DEFAULTS AND REMEDIES.

        10.1.    Events of Default; Acceleration. If one or more of the following events (herein called “Events of Default”) shall occur for any reason whatsoever (and whether such occurrence shall be voluntary or involuntary or be effected by operation of law or pursuant to any judgment, decree or order of any court or any order, rule or regulation of any administrative or governmental body):

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        (A)     default in the payment of any interest upon the Note when such interest becomes due and payable, and such default shall have continued for a period of fifteen (15) days; or

        (B)     default in the payment of principal of (or prepayment premium, if any, on) the Note when and as the same shall become due and payable, whether at maturity or at a date fixed for principal payment or prepayment (including, without limitation, a principal payment or prepayment as provided in Section 6), or by acceleration or otherwise, and such default shall have continued for a period of fifteen (15) days; or

        (C)     default in the performance or observance of any other covenant, agreement or condition contained herein, in the Note, the Deed of Trust, the Security Agreement or any other Collateral Documents, or any Event of Default under the Deed of Trust or Default under the Security Agreement shall occur, and such default shall have continued for a period of thirty (30) days; or

        (D)     the Company or any Subsidiary shall not pay when due, whether by acceleration or otherwise, any evidence of Indebtedness of the Company or such Subsidiary (other than the Note), including, without limitation, the Indebtedness of the Company to you evidenced by a certain secured promissory note dated December 18, 1997 in the principal amount of $15,000,000.00, and by a certain secured promissory note dated May 10, 1999 in the principal amount of $18,000,000.00, and by a secured promissory note dated December 19, 2003 in the principal amount of $20,000,000.00, respectively, or any condition or default shall exist under any such evidence of Indebtedness or under any agreement under which the same may have been issued permitting such evidence of Indebtedness to become or be declared due prior to the stated maturity thereof, and such default shall have continued for a period of fifteen (15) days; or

        (E)     the Company or any Subsidiary shall file a petition seeking relief for itself under Title 11 of the United States Code, as now constituted or hereafter amended, or an answer consenting to, admitting the material allegations of or otherwise not controverting, or shall fail to timely controvert, a petition filed against the Company or such Subsidiary seeking relief under Title 11 of the United States Code, as now constituted or hereafter amended; or the Company or any Subsidiary shall file such a petition or answer with respect to relief under the provisions of any other now existing or future bankruptcy, insolvency or other similar law of the United States of America or any State thereof or of any other country or jurisdiction providing for the reorganization, winding-up or liquidation of corporations or an arrangement, composition, extension or adjustment with creditors; or

        (F)     a court of competent jurisdiction shall enter an order for relief which is not stayed within 60 days from the date of entry thereof against the Company or any Subsidiary under Title 11 of the United States Code, as now constituted or hereafter amended; or there shall be entered an order, judgment or decree by operation of law or by a court having jurisdiction in the premises which is not stayed within 60 days from the date of entry thereof adjudging the Company or any Subsidiary as bankrupt or insolvent, or ordering relief against the Company or any Subsidiary, or approving as properly filed a petition seeking relief against the Company or any Subsidiary, under the provisions of any other now existing or future bankruptcy, insolvency or other similar law of the United States of America or any State thereof or of any other country or jurisdiction providing for the reorganization, winding-up or liquidation of corporations or an arrangement, composition, extension or adjustment with creditors, or appointing a receiver, liquidator, assignee, sequestrator, trustee, custodian or similar official of the Company or any Subsidiary or of any substantial part of its property, or ordering the reorganization, winding-up or liquidation of its affairs; or any involuntary petition against the Company or any Subsidiary seeking any of the relief specified in this clause shall not be dismissed within 60 days of its filing; or

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        (G)     the Company or any Subsidiary shall make a general assignment for the benefit of its creditors; or the Company or any Subsidiary shall consent to the appointment of or taking possession by a receiver, liquidator, assignee, sequestrator, trustee, custodian or similar official of the Company or such Subsidiary or of all or any substantial part of its property; or the Company or any Subsidiary shall have admitted to its insolvency or inability to pay, or shall have failed to pay, its debts generally as such debts become due; or the Company or any Subsidiary or its officers, directors or majority stockholders shall take any action to dissolve or liquidate the Company or such Subsidiary (other than as contemplated by Section 8.6A); or

        (H)     the rendering against the Company or any Subsidiary of a final non-appealable judgment, decree or order for the payment of money in excess of $500,000 and the continuance of such judgment, decree or order unsatisfied and in effect for any period of 60 consecutive days without a stay of execution; or

        (I)     the Company or any Subsidiary shall (1) engage in any non-exempted “prohibited transaction,” as defined in Sections 406 and 408 of ERISA and Section 4975 of the Internal Revenue Code of 1986, as amended, (2) incur any “accumulated funding deficiency,” as defined in Section 302 of ERISA, in an amount in excess of $10,000, whether or not waived, or (3) terminate or permit the termination of an “employee pension benefit plan,” as defined in Section 3 of ERISA, in a manner which could result in the imposition of a Lien on any property of the Company or such Subsidiary pursuant to Section 4068 of ERISA securing an amount in excess of $10,000; or

        (J)     any representation or warranty made by the Company in Section 2 hereof or in any Collateral Document or in any certificate or instrument furnished in connection therewith shall prove to have been false or misleading in any respect as of the date made; or

        (K)     the dissolution of the Company, whether by operation of law or otherwise (other than as contemplated by Section 8.6A);

then an amount equal to the Prepayment Price (based on the outstanding principal balance), computed as provided in Section 6.3 (except that, for purposes of such computation, the Prepayment Date shall be deemed to be the date upon which the Event of Default shall have occurred), shall at the option of the holder of the Note immediately become due and payable without notice or demand, together with accrued interest thereon at the Overdue Interest Rate, provided, however, that upon the occurrence of an Event of Default described in clauses (E), (F) or (G) of this Section 10.1, the entire outstanding principal amount of the Note, together with accrued interest thereon after default at the Overdue Interest Rate, shall at the option of the holder of the Note immediately become due and payable without notice or demand.

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        10.2.    Suits for Enforcement. In case an Event of Default shall occur and be continuing, the holder of the Note may proceed to protect and enforce its rights by suit in equity, action at law or other appropriate proceeding, whether for the specific performance of any covenant contained in the Note or in this Agreement or in any Collateral Document or in aid of the exercise of any power granted in the Note or in this Agreement or in any Collateral Document or may proceed to enforce the payment of the Note or to enforce any other legal or equitable right of the holder of the Note. The Company agrees that its obligations under Section 6, including, without limitation, any applicable prepayment premium, are of the essence of this Agreement, and upon application to any court of equity having jurisdiction in the premises, the holder of the Note shall be entitled to a decree against the Company requiring specific performance of such obligations.

        10.3.    Remedies Not Waived. No course of dealing between the holder of the Note and the Company or any delay or failure on the part of the holder in exercising any rights under the Note or under any Collateral Document or hereunder shall operate as a waiver of any rights of such holder.

        10.4.    Remedies Cumulative. No remedy herein or in the Note or in any Collateral Document conferred upon the holder of the Note is intended to be exclusive of any other remedy and each and every remedy shall be in addition to every other remedy given hereunder or under the Note or under any Collateral Document or now or hereafter existing at law or in equity or by statute or otherwise.

        10.5.    Costs and Expenses. The Company shall pay to the holder of the Note, to the extent permitted under applicable law, all reasonable out-of-pocket expenses incurred by such holder as shall be sufficient to cover the cost and expense of enforcing such holder’s rights under the Note and any Collateral Document or the collecting and foreclosing upon, or otherwise dealing with, the Collateral, or participating in any litigation or bankruptcy proceeding for the protection or enforcement of the holder’s collateral or claim against the Company or any guarantors of the Note or otherwise incurred in connection with the occurrence of an Event of Default, said expenses to include reasonable compensation to the attorneys and counsel of such holder for any services rendered in that connection, upon the Note held by such holder.

SECTION 11.   MISCELLANEOUS.

        11.1.    Loss, Theft, Destruction or Mutilation of Note. Upon receipt of evidence satisfactory to the Company of the loss, theft, destruction or mutilation of the Note, and, in the case of any such loss, theft or destruction, upon receipt of a bond of indemnity reasonably satisfactory to the Company or, in the case of any such mutilation, upon surrender and cancellation of such Note, the Company will make and deliver, in lieu of such lost, stolen, destroyed or mutilated Note, a new Note of like tenor and unpaid principal amount and dated the date of, or, if later, the date to which interest has been paid on, the lost, stolen, destroyed or mutilated Note. In the case of a holder of the Note which is an institutional investor such as you, its own unsecured agreement of indemnity shall be deemed satisfactory to the Company.

        11.2.    Expenses. Whether or not the loan herein contemplated shall be consummated, the Company shall pay you the total amount of $56,000.00 as a non-refundable processing fee, which has been previously paid to you, and the Company shall pay all costs of executing and closing this Agreement and the Collateral Documents, including, without limitation, attorneys fees, survey costs, appraisal fees, title insurance and related expenses, engineering reports, and environmental audit reviews and related expenses. The Company’s obligations under this Section 11.2 shall survive the payment or prepayment of the Note.

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        11.3.    Stamp Taxes, Recording Fees, etc. The Company will pay, and save you and any subsequent holder of the Note harmless against, any and all liability (including any interest or penalty for non-payment or delay in payment) with respect to stamp and other taxes (other than any such stamp or other taxes incurred upon a transfer of the Note by you), if any, and all recording and filing fees which may be payable or determined to be payable in connection with the transactions contemplated by this Agreement and the Collateral Documents, including, without limitation, the issue and delivery of the Note, the execution, delivery, filing and recording of the Collateral Documents and financing statements related thereto, or any modification, amendment or alteration thereof. The obligations of the Company under this Section 11.3 shall survive the payment or prepayment of the Note.

        11.4.    uccessors and Assigns. All covenants, agreements, representations and warranties made herein, in the Collateral Documents and in the Note or in certificates delivered in connection herewith by or on behalf of the Company shall survive the issue and delivery of the Note to you, the making of the loan by you as provided in Section 1.2, and shall bind the successors and assigns of the Company, whether so expressed or not, and all such covenants, agreements, representations and warranties shall inure to the benefit of your successors and assigns, including any subsequent holder of the Note.

        11.5.    Payment. Notwithstanding any provision to the contrary in the Note contained, the Company will promptly and punctually pay to you by wire transfer of immediately available funds pursuant to wiring instructions from you, or if you so request, by check mailed (not later than three days prior to the date any payment is due) to Metropolitan Life Insurance Company, Agricultural Investments, 5047 Collection Center Drive, Chicago, Illinois 60693-0050 or by such other method or to such other address as may be designated in writing by you, all amounts payable in respect of the principal of, prepayment premium, if any, and interest on, the Note, without any presentment thereof and without any notation of such payment being made thereon.

        11.6.    Notices. All communications provided for hereunder, under the Collateral Documents or under the Note (other than payments in respect thereof which shall be made in accordance with Section 11.5) shall be in writing, and if to you, mailed (by registered or certified mail) or delivered to you addressed as this Agreement is addressed with a copy to: Metropolitan Life Insurance Company, Agricultural Investments, P.O. Box 37, 2203 E. Empire Street, Bloomington, Illinois 61702-0037, Attention: Manager, or if to the Company, mailed (by registered or certified mail) to Cal-Maine Foods, Inc. and Hillandale, LLC, P.O. Box 2960, 3320 Woodrow Wilson Drive, Jackson, Mississippi 39207, Attention: Timothy A. Dawson, Vice-President and Chief Financial Officer, or addressed to either party at any other address in the United States of America that such party may hereafter designate by written notice to the other party. Communications mailed as aforesaid shall be deemed sufficiently made three (3) days after the time such communication is deposited in the mails.

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        11.7.    Severability. If any provision of this Agreement or the Note or the application thereof to any person or circumstance shall be invalid or unenforceable to any extent, the remainder of this Agreement and the Note and the application of such provision to other persons or circumstances shall not be affected thereby and shall be enforced to the maximum extent permitted by law.

        11.8.    Law Governing; Modification. This Agreement shall be construed in accordance with and governed by laws of the State of Florida. No provision of this Agreement may be waived, changed or modified, or the discharge thereof acknowledged, orally, but only by an agreement in writing signed by the party against whom the enforcement of any waiver, change, modification or discharge is sought.

        11.9.    Headings. The headings of the sections and subsections of this Agreement are inserted for convenience only and do not constitute part of this Agreement.

        11.10.    Counterparts. This Agreement may be executed simultaneously in two or more counterparts, each of which shall be deemed an original, and it shall not be necessary in making proof of this Agreement to produce or account for more than one such counterpart.

        11.11.    Final Credit Agreement. THIS WRITTEN AGREEMENT, THE NOTE AND THE COLLATERAL DOCUMENTS ARE THE FINAL EXPRESSION OF THE CREDIT AGREEMENT BETWEEN THE COMPANY AND YOU AND MAY NOT BE CONTRADICTED BY EVIDENCE OF ANY PRIOR OR CONTEMPORANEOUS ORAL AGREEMENT BETWEEN THE COMPANY AND YOU. THE COMPANY AND YOU HEREBY AFFIRM THAT THERE IS NO UNWRITTEN ORAL CREDIT AGREEMENT BETWEEN THE COMPANY AND YOU WITH RESPECT TO THE SUBJECT MATTER OF THIS WRITTEN CREDIT AGREEMENT, THE NOTE, THE COLLATERAL DOCUMENTS, AND ANY RELATED LOAN DOCUMENTS.

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        If the foregoing is satisfactory to you, please sign the form of acceptance on the enclosed counterpart of this letter agreement and forward the same to the Company, whereupon this letter agreement will become a binding agreement between you and the Company as of the date first above written.

Yours very truly,

CAL-MAINE FOODS, INC.,

a Delaware corporation

By:  /s/ Fred Adams, Jr.

        Fred Adams, Jr., Its Chief Executive Officer

By:  /s/ Bobby J. Raines

        Bobby J. Raines, Its Secretary

HILLANDALE, LLC,

a Florida limited liability company

By:  /s/ Adolphus Baker

Name:  Adolphus Baker

As Its:  Director

The foregoing agreement is
hereby accepted as of the
date first above written.

METROPOLITAN LIFE INSURANCE COMPANY

By:_________________________________
      Its:______________________________

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EXHIBIT “A”

CAL-MAINE FOODS, INC. AND
HILLANDALE, LLC

Secured Promissory Note

Due December 1, 2020

	___________________
$28,000,000.00	______________, 2005

        FOR VALUE RECEIVED, the undersigned, CAL-MAINE FOODS, INC., a Delaware corporation, and HILLANDALE, LLC, a Florida limited liability company (hereinafter individually and collectively called the “Company”), hereby jointly and severally promise to pay to Metropolitan Life Insurance Company, or assigns, on December 1, 2020, the principal amount of Twenty-eight Million Dollars ($28,000,000.00) (or so much thereof as shall not have been theretofore paid by mandatory principal payments and optional prepayments as required in the Agreement as hereinafter defined) in such coin or currency of the United States of America as at the time of payment shall be legal tender for public and private debts, at the address provided in Section 11.5 of the Agreement (as hereinafter defined), and to pay interest (computed on the basis of a 360-day year) at said address, in like coin or currency, on the unpaid portion of said principal amount from the date hereof, on the first day of each month commencing ___________, 2005 at the rate or rates per annum set forth in the Agreement until such unpaid portion of such principal amount shall have become due and payable, and at the Overdue Interest Rate as defined in the Agreement thereafter and, so far as may be lawful, on any overdue installment of interest at such Overdue Interest Rate.

        This note (the “Note”) is issued pursuant to and entitled to the benefits of the Loan Agreement dated of even date herewith, between the Company and Metropolitan Life Insurance Company (the “Agreement”), the terms and provisions of which are hereby incorporated by reference and made a part of the terms of this Note. The Note is secured by and entitled to the benefits of (i) certain first lien Mortgages/Deeds of Trust and Security Agreements, dated of even date herewith, made by the Company, as Mortgagor/Grantor, encumbering certain property located in Florida, Georgia and Alabama, and (ii) one or more Security Agreements, dated of even date herewith, encumbering certain property located in Florida, Georgia and Alabama, between the Company, as debtor, and Metropolitan Life Insurance Company, as secured party, to each of which reference is hereby made for a description of the collateral or obligations covered thereby and the rights and benefits afforded thereby to the holder of the Note.

        This Note is subject to mandatory principal payments and optional prepayment, in whole or in part, in certain cases with a premium and in other cases without premium, as provided in the Agreement. The interest rate or rates applicable to this Note are subject to adjustment by the holder hereof as provided in the Agreement. The unpaid principal balance and all other amounts owing under this Note may be declared to be immediately due and payable upon the happening of an Event of Default as defined in the Agreement.

        In the event this Note or any of the instruments referred to herein are placed in the hands of an attorney or attorneys for collection or enforcement or if the holder or holders of the Note are required to obtain attorneys and incur expenses and attorney fees by reason of litigation or participation in bankruptcy proceedings for the protection or enforcement of such holder’s or holders’ collateral and claim against the Company, then in all such cases, the holder of the Note shall be entitled to reasonable attorney fees and expenses from the Company.

        The Company waives diligence, demand, presentment, notice of nonpayment and protest, and consents to extensions of the time of payment, surrender or substitution of security, or forbearance, or other indulgence, without notice.

        This Note shall be construed in accordance with and governed by the laws of the State of Florida.

        In the event the interest provisions hereof or any exaction provided for herein or in any of the instruments referred to herein shall result for any reason and at any time during the term of this loan in an effective rate of interest which transcends the limit of the usury or any other law applicable to this loan, all sums in excess of those lawfully collectible as interest for the period in question shall, without further agreement or notice between or by any party hereto, be applied on principal immediately upon receipt and effect as though the payor had specifically designated such extra sums to be so applied to principal and the holder of this Note shall accept such extra payment or payments as a premium-free prepayment. If any such amounts are in excess of the principal then outstanding, such excess shall be paid to the Company. In no event shall any agreed-to or actual exaction as consideration for the Loan transcend the limits imposed or provided by the law applicable to this transaction for the use or detention of money or for forbearance in seeking its collection.

        IN WITNESS WHEREOF, CAL-MAINE FOODS, INC. and HILLANDALE, LLC have caused this Note to be signed in its corporate name by its officers thereunto duly authorized, and in its company name by its officer, director or manager thereunto duly authorized, as the case may be, and to be dated as of the day and year first above written.

HILLANDALE, LLC, a Florida limited liability company	CAL-MAINE FOODS, INC., a Delaware corporation
By:_________________________________	By:_________________________________
Name:_______________________________	Fred Adams, Jr., Chief Executive Officer
As Its:_______________________________
	By:_________________________________
	Bobby J. Raines, Secretary

EXHIBIT “B”

FACILITIES

EXHIBIT “C”

LIENS

        All liens are disclosed on the most recent balance sheet of the Company delivered to Lender.

EXHIBIT “D”

OWNERSHIP OF COMPANY AND SUBSIDIARIES

EXHIBIT “E”

(Loan Agreement)

“NOTICE OF ELECTION”
(Swapped Rate Tranche(s) - Loan X__ __ __)

Dated: ______________, 20___

        I, _______________________, _______________________, of Cal-Maine Foods, Inc., a Delaware corporation, and __________________, _______________ of Hillandale, LLC, a Florida limited liability company (individually and collectively, “Borrower”), hereby certify and request as follows:

        1.     I am familiar with the terms of the Loan Agreement dated as of the _____ day of October, 2005 (the “Loan Agreement”) entered into between Borrower and Metropolitan Life Insurance Company, a New York corporation (“Lender”). As to the matters herein set forth I either have personal knowledge or have obtained information from other employees or agents of Borrower in whom I have confidence and whose duties require them to have personal knowledge thereof. I make this Certificate with the intent that it shall be relied upon by Lender as a basis for allocation of Swapped Rate Tranche(s) as contemplated by the Loan Agreement.

        2.     With respect to the Loan Agreement and the Collateral Documents held by the Lender, the Borrower has performed all agreements on its part required to be performed on or prior to the date hereof, and no Event of Default under the Loan Agreement has occurred which would entitle Lender to accelerate all outstanding amounts due upon the Loan, and no condition exists which, with the giving of notice and/or the passing of time would constitute an Event of Default and no other condition exists which would entitle Lender to cease making the final Advance.

        3.     Borrower acknowledges that the respective principal amounts outstanding upon the Note and Loan Agreement, and the respective interest rates per annum applicable thereto, as of the date hereof, are as follows:

Base Rate Tranche	$______________
Swapped Rate Tranche	$______________
( ___ year term commencing __________, 20__ @ ___.___%)
Swapped Rate Tranche	$______________

( ___ year term - commencing _________, 20__ @ ___.___)
Swapped Rate Tranche	$______________
( ___ year term - commencing _________, 20__ @ ___.___)
Swapped Rate Tranche	$______________
( ___ year term - commencing _________, 20__)
Aggregate Principal Outstanding on Loan	$______________
(in no event to exceed $28,000,000)

        4.     Pursuant to this Notice of Election given under Section 1.4 of the Loan Agreement, Borrower hereby requests Lender to allocate the following principal amounts presently outstanding upon the ___ (check here) Base Rate Tranche [or ___ (check here) presently outstanding upon that certain presently maturing ___ year term Swapped Rate Tranche commencing __________, 20__] to the following additional Swapped Rate Tranche(s) in accordance with the terms, including but not limited to, such terms determining applicable interest rates, of the Note and Loan Agreement, as follows:

Swapped Rate Tranche	$______________
( ___ year term commencing __________, 20__ )
Swapped Rate Tranche	$______________
( ___ year term - commencing _________, 20__ )
Swapped Rate Tranche	$______________
( ___ year term - commencing _________, 20__ )
Swapped Rate Tranche	$______________
( ___ year term - commencing _________, 20__)

It is further understood and agreed that no such additional Swapped Rate Tranche shall be in an initial principal amount of less than $2,000,000.00 (issued in increments of $10,000), and no more than four (4) Swapped Rate Tranches shall be permitted to exist under the terms of the Note and Loan Agreement at any one time during the term of the Loan. Further, in no event shall the Borrower be permitted to select a term for any such additional Swapped Rate Tranche that would extend beyond the Maturity Date.

        5.     The Borrower acknowledges that the interest rate applicable to the aggregate principal balance outstanding upon the Base Rate Tranche as of the date hereof is equal to % per annum pursuant to the Note and the Loan Agreement.

        6.     All representations and warranties contained in the Loan Agreement and Collateral Documents are true and correct in all material respects as of the date hereof. There has been no material and adverse change in the identity, composition, ownership, control, or financial condition of the Borrower and its Subsidiaries.

        7.     The Borrower hereby further certifies as of the date hereof that the Borrower and its Subsidiaries are in compliance with all financial covenants contained in the Loan Agreement and contained in such other borrowing agreements or evidence of indebtedness of the Borrower and its Subsidiaries (other than the Note and Loan Agreement).

        The foregoing capitalized terms shall have the same meaning in this Notice of Election as such terms have in the Loan Agreement.

CAL-MAINE FOODS, INC.

By:  _______________________________

        _______________________________

        Its _____________________________

HILLANDALE, LLC,

a Florida limited liability company

By:  _______________________________

        _______________________________

        Its _____________________________

Sworn to and subscribed before me this ______ day of __________________, 2005.

____________________________

Notary Public

My Commission expires:

Loan No. X______________