FOURTH AMENDMENT AND WAIVER AGREEMENT TO AMENDED AND RESTATED NOTE PURCHASE AGREEMENT DATED AS OF SEPTEMBER 30, 2003
EXHIBIT
10.1(a)
FOURTH
AMENDMENT AND WAIVER AGREEMENT
TO
AMENDED
AND RESTATED NOTE
PURCHASE
AGREEMENT
DATED
AS OF SEPTEMBER 30, 2003
THIS
FOURTH AMENDMENT AND WAIVER AGREEMENT (this “Agreement”),
dated
as of March 1, 2007, among Cal-Maine Foods, Inc. (the “Company”)
and
Cal-Maine Partnership, LTD (the “Partnership”
and
with the Company, the “Borrowers”)
and
▇▇▇▇ ▇▇▇▇▇▇▇ Life Insurance Company and ▇▇▇▇ ▇▇▇▇▇▇▇ Variable Life Insurance
Company (collectively, the “Purchasers”)
is
with respect to the Amended and Restated Note Purchase Agreement dated as of
September 30, 2003 (as amended by the First Amendment and Waiver Agreement
dated
as of November 30, 2003, a Second Amendment Agreement dated as of
January 26, 2004, a Third Amendment Agreement dated as of August 2, 2004
and a letter agreement dated August 24, 2005, the “Note
Agreement”)
pursuant to which the Borrowers have outstanding their Series A Secured Notes
due September 1, 2014, their Series B Secured Notes due September 1, 2014 and
their Series C Secured Notes due September 1, 2014 (collectively, the
“Notes”).
As of
the date of this Agreement, the Purchasers are the holders of 100% of the
outstanding principal amount of the Notes.
The
Borrowers have requested that the Purchasers consent to the amendments and
waivers to the Note Agreement set forth in this Agreement.
The
Purchasers are willing to do so on, and subject to, the terms and conditions
of
this Agreement.
Terms
not
otherwise defined in this Agreement have the meanings given therefor in the
Note
Agreement.
NOW,
THEREFORE, the parties agree:
1. AMENDMENTS
TO NOTE AGREEMENT.
Subject
to the satisfaction of the conditions set forth in
Section 3,
from
and after the date of this Agreement:
(a) Consolidated
Capital Expenditure to Depreciation Ratio. Clause
(v) of paragraph 6A of the Note Agreement is amended and restated as
follows:
“(v)
Consolidated
Capital Expenditure to Depreciation Ratio. Permit,
as of the last day of any Fiscal Quarter, the ratio of (a) the aggregate
Consolidated Capital Expenditures for the four Fiscal Quarters then ended less
any Excluded Capital Expenditures made in such period to (b) the aggregate
amount of depreciation of the Company and its Subsidiaries determined on a
consolidated basis in accordance with GAAP for such four Fiscal Quarters, to
exceed 1.25 to 1.00.”
(b) Debt;
Guaranties of Debt.
(i) Clause
(i) of paragraph 6H of the Note Agreement is amended and restated as
follows:
“(i)
The
Borrowers will not, and will not permit any Subsidiary to, create, incur or
assume any Debt after the Closing Date or issue any Equity Interest convertible
or exchangeable into Debt of a Borrower or any Subsidiary unless (a) no Default
or Event of Default has then occurred which is then continuing, (b) no Default
or Event of Default would reasonably be anticipated to result therefrom, and
(c)
on a pro forma basis, after giving effect to the incurrence of such Debt, the
Borrowers would be in compliance with their financial covenants set forth in
paragraph
6A,
provided,
however,
(1) in
no event will Hillandale be permitted to incur or permit to remain outstanding
any Debt after the date of the Fourth Amendment other than (A) Debt owed to
a
Borrower or another Subsidiary provided
the
aggregate principal amount of all Debt owed to the Borrowers and the
Subsidiaries shall not at any time exceed $10,000,000, (B) the Hillandale Term
Loan, (C) Debt owed to Farm Credit of North Florida in an aggregate principal
amount not exceeding $2,625,000, (D) Debt owed to Mercantile Bank in an
aggregate principal amount not exceeding $258,476.38 and (E) other Debt not
exceeding at any time $2,000,000 in the aggregate, and (2) in no event will
American Egg be permitted to incur or permit to remain outstanding any Debt
after the date of the Fourth Amendment other than (A) debt owed to a Borrower
or
another Subsidiary provided
the
aggregate principal amount of all Debt owed to the Borrowers and the
Subsidiaries shall not at any time exceed $2,000,000 and (B) other Debt not
exceeding at any time $100,000 in the aggregate.”; and
(ii) A
new
clause (iii) is added to paragraph 6H of the Note Agreement as
follows:
“(iii)
Notwithstanding
clause (i) above, the Borrowers will not, and will not permit any Subsidiary
to,
create, incur, assume or permit to remain outstanding any Guarantee of any
obligations of Person not a Wholly-Owned Subsidiary which has executed a
Subsidiary Guarantee other than (a) by reason of endorsement of negotiable
instruments for deposit or collection or similar transactions in the ordinary
course of business; (b) the Hillandale Term Loan; (c) a Guaranty by the Company
of Debt of Delta Egg Farm LLC provided the aggregate liability of the Company
under such Guaranty shall not at any time exceed $10,800,000 and (d) Guarantees
by the Company of obligations of Hillandale for borrowed money provided the
aggregate liability of the Company under such Guarantees shall not at any time
exceed $2,000,000.”
(c) Definitions.
(i) The
following definitions are added to paragraph 10B of the Note Agreement in
correct alphabetical order:
“American
Egg”
means
American Egg Products LLC, a Georgia limited liability company.
“Excluded
Capital Expenditures”
means
the following expenditures to the extent they would otherwise be included in
Consolidated Capital Expenditures: (i) expenditures for rolling stock; (ii)
expenditures in an aggregate amount not to exceed $50,000,000 made to acquire
the membership interest in Hillandale; (iii) expenditures in an aggregate amount
not to exceed $15,000,000 made to construct and acquire: (A) a plant constructed
by the Company for the processing and disposal of spent hens in Waelder, Texas
and (B) a plant constructed by the Company for the breaking and processing
of
shell eggs in Waelder, Texas; and (iv) expenditures by Green Forest Foods,
LLC
in an aggregate amount not to exceed $10,500,000 made to acquire certain assets
which were previously leased by Green Forest Foods, LLC under one or more
operating leases.”
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“Fourth
Amendment”
means
the Fourth Amendment and Waiver Agreement to this Agreement dated as of March
1,
2007.
“Hillandale”
means
Hillandale LLC, a Florida limited liability company.
“Hillandale
Term Loan”
means
the term loan in the aggregate principal amount of $28,000,000 made to the
Company and Hillandale as co-borrowers by Metropolitan Life Insurance Company
pursuant to a loan agreement dated as of October 12, 2005.
(ii) the
following definitions in paragraph 10B are amended and restated:
“Collateral”
means
the “Collateral” as defined in each Security Agreement executed or required to
be executed pursuant to this Agreement and the “Mortgaged Property” as defined
in each Mortgage executed or required to be executed pursuant to this
Agreement.
“Consolidated
Net Income”
means
for any period for which it is to be determined, the Net Income of the
Consolidated Group for such period, determined on a consolidated basis in
accordance with GAAP; provided,
however,
Net
Income of the Consolidated Group shall exclude any minority interest in
Subsidiary earnings and the income of any Subsidiary to the extent the payment
of such income in the form of a distribution or repayment of any Debt to a
Borrower or another Subsidiary (not similarly restricted) is not permitted,
whether on account of any charter or by-law-law restriction, any agreement,
instrument, deed or lease or any law, statue, judgment, decree or governmental
order, rule or regulation applicable to such Subsidiary.
2. WAIVERS.
Subject
to the conditions set forth in Section
3
the
Purchasers hereby waive:
(a) the
requirements of paragraph 5L of the Note Agreement with respect to Hillandale
and American Egg but only for so long as such Subsidiary is not a Wholly-Owned
Subsidiary;
(b) the
requirements of paragraph 5N of the Note Agreement requiring the Borrowers
to
provide the Purchasers with a mortgage on any real property acquired by the
Borrowers or any Subsidiary after the Closing Date but solely with respect
to
(i) the plants constructed by the Company in Waelder, Texas and described in
the
definition of Excluded Capital Expenditures, (ii) real property owned by
Hillandale and subject to a mortgage securing the Hillandale Term Loan as of
the
date hereof, (iii) real estate formerly leased by Green Forest Foods, LLC,
and
(iv) other real estate acquired prior to the date of this Agreement to the
extent such real estate is not adjacent to, or used in connection with, real
estate currently subject to a Mortgage; and
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(c) the
restrictions set forth in clause (c) of paragraph 6G(ii) of the Note Agreement
as to the aggregate amount of Restricted Payments and Restricted Investments
that may be made by the Borrowers and their Subsidiaries in any Fiscal Year
but
solely to the extent necessary to permit (i) the making of Excluded Capital
Expenditures; (ii) capital contributions in respect of the Company’s membership
interests in Texas Egg Products, LLC, a Texas limited liability company and
Texas Egg, LLC, a Texas limited liability company, provided the aggregate amount
of such capital contributions does not exceed $2,000,000; (iii) capital
contributions in respect of the Company’s membership interest in Green Forest
Foods, LLC made prior to the date of this Agreement in an aggregate amount
not
exceeding $ 4,078,282.26; and
(iv)
loans and advances to Hillandale and American Egg to the extent such loans
and
advances are otherwise permitted by clause (i) of paragraph 6H of the Note
Agreement, and solely, in each case, so long as the requirements of clauses
(a)
and (b) are otherwise met in connection with such Restricted
Investment.
In
addition, the Purchasers waive any Default or Event of Default now existing
solely as a result of the failure of the Borrowers to have previously complied
with provisions of the Note Agreement waived pursuant to this Section
2.
3. CONDITIONS.
The
amendments granted in Section
1
and the
waivers granted in Section
2 are
subject to the satisfaction of the following:
(a) Instruments
to be Delivered. (i)
Each
of the Borrowers shall have executed and delivered this Agreement to the
Purchasers and (ii) Green Forest Foods LLC shall have executed and delivered
a
Subsidiary Guaranty to the Purchasers and the Borrowers shall have otherwise
complied with Paragraph 5L of the Note Agreement.
(b) Payment
of Expenses.
All
Expenses, including those of Special Counsel, shall have been paid by the
Borrowers in full.
4. REPRESENTATIONS
AND WARRANTIES.
The
Borrowers, jointly and severally, represent and warrant to the
Purchasers:
(a) Continuing
Representations.
Subject
to any disclosure set forth on Schedule
1
attached, each of the representations and warranties set forth in paragraphs
8A
through 8K, 8M, 8N, 8P and 8S of the Note Agreement is true and correct in
all
material respects on and as if made as of the date hereof after giving effect
to
this Agreement.
(b) Debt
of Hillandale and American Egg.
Except
as described in clauses (i)(1) and (i)(2) of paragraph 6H of the Note Agreement
(as amended by this Agreement), as of the date of this Agreement, neither
Hillandale nor American Egg has any Debt. Except as described in clause (iii)
of
paragraph 6H of the Note Agreement (as amended by this Agreement), as of the
date of this Agreement, neither a Borrower nor any other Subsidiary has a
Guaranty of any obligations of Hillandale, American Egg or any other Person
not
a Wholly-Owned Subsidiary which has executed a Subsidiary Guaranty.
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(c) No
Defaults.
As of
the date hereof, and after giving effect to this Agreement, no Default or Event
of Default will exist.
(d) Consents
Etc.
No
consent, approval or authorization of, or registration, filing or declaration
with, any Governmental Authority or any other Person (including without
limitation, any creditor, lessor, or stockholder of any Borrower) is required
in
connection with execution, delivery or performance by any Borrower of this
Agreement or the Note Agreement as amended by this Agreement.
(e) Solvency.
As of
the date hereof, (i) the aggregate present fair saleable value of the assets
of
each Borrower will, to the knowledge of the Borrowers in their reasonable
business judgment be greater than the amount that will be required to pay the
probable liabilities of each Borrower on its debts, including contingent
liabilities, as they become absolute and mature; (ii) such Borrower has (and
has
no reason to believe that it will not have) sufficient capital for the conduct
of its business as presently conducted; and (iii) no Borrower intends to incur,
or believes it has incurred, beyond its ability to pay as they
mature.
5. NO
OTHER AMENDMENTS OR WAIVERS.
Except
as expressly set forth in Section
1,
the
Note Agreement and the other Transaction Documents shall continue in full force
and effect without alteration or amendment. No term or provision of the
Transaction Documents is waived by this Agreement except for the waivers
expressly provided for in Section
2.
6. GOVERNING
LAW.
THIS
AGREEMENT IS TO BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, AND THE RIGHTS
OF
THE PARTIES SHALL BE GOVERNED BY, THE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS
(WITHOUT GIVING EFFECT TO ANY LAWS OR RULES RELATING TO CONFLICTS OF LAWS THAT
WOULD CAUSE THE APPLICATION OF THE LAWS OF ANY JURISDICTION OTHER THAN THE
COMMONWEALTH OF MASSACHUSETTS).
7. 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.
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IN
WITNESS WHEREOF, this Fourth Amendment Agreement is executed under seal as
of
the date first above written.
| BORROWERS: | CAL-MAINE FOODS, INC. | |
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| By: | ||
|
Name: |
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| Title: | ||
| CAL-MAINE PARTNERSHIP, LTD. | ||
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| By: | CAL-MAINE FOODS, INC. | |
| (its General Partner) | ||
| By: | ||
|
Name: |
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| Title: | ||
| PURCHASERS: | ▇▇▇▇ ▇▇▇▇▇▇▇ LIFE INSURANCE COMPANY | |
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| Date: | By: | |
|
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ |
||
| Title: Managing Director | ||
|
▇▇▇▇
▇▇▇▇▇▇▇ VARIABLE LIFE INSURANCE COMPANY
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||
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| Date: | By: | |
|
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ |
||
| Title: Authorized Signatory | ||
Signature
Page to Fourth Amendment Agreement
to
Amended and Restated Note Purchase
Agreement
6