EXHIBIT 10.1

 

AMENDMENT TO ASSET PURCHASE AGREEMENT

 

This Amendment to Asset Purchase Agreement (the “Amendment”) is entered into as
of February 15, 2008 by and among Moark, LLC, a Missouri limited liability
company (“Moark”), Cutler at Abbeville, L.L.C., a Missouri limited liability
company (“Cutler”), Hi Point Industries, LLC, a California limited liability
company (“Hi Point”), L & W Egg Products, Inc., an Ohio corporation (“L&W”),
Norco Ranch, Inc., a California corporation (“Norco”), and Moark Egg
Corporation, a Missouri corporation (“MEC” and collectively, the “Seller
Parties”), Land O’Lakes, Inc., a Minnesota cooperative corporation (“LOL”), and
Golden Oval Eggs, LLC, a Delaware limited liability company (“Golden Oval”), and
GOECA, LP, a Delaware limited partnership (“GOECA” and together with Golden
Oval, the “Buyer Parties”).  The Seller Parties, LOL and the Buyer Parties may
be referred to herein as the “Parties.”

 

A.            The Seller Parties, as Sellers, and the Buyer Parties, as Buyers,
entered into that certain Asset Purchase and Sale Agreement dated as of May 23,
2006 (the “Asset Purchase Agreement”).  Under the Asset Purchase Agreement, the
Buyer Parties were obligated to pay, among other consideration, the Earn-Out
Payment.

 

B.            Pursuant to the terms of the Asset Purchase Agreement, LOL and the
Buyer Parties entered into that certain Subordinate Promissory Note dated as of
June 30, 2006 (the “Note”).  The Note provided that the Buyer Parties were
obligated to pay to LOL the principal sum of Seventeen Million Dollars
($17,000,000.00), together with interest thereon, in installments commencing on
June 30, 2008 (the “Initial Payment”) and an ultimate maturity date of  June 30,
2009 (the “Maturity Date”).  The Note, together with the Warrant to Subscribe
for and Purchase Units of Golden Oval (the “2006 Warrant”) issued to LOL,
further provided that if the Note was not repaid by the Maturity Date, LOL had
the option to exercise the right to purchase up to ten percent (10%) of the
equity interest in Golden Oval at the price of $.01 per Unit (as defined in the
2006 Warrant).  The Note was secured by certain property owned by Golden Oval,
GOECA and Midwest Investors of Iowa, Cooperative, an Iowa corporation
(“Midwest”) pursuant to that certain Security Agreement by and among LOL, as
secured party, and Golden Oval, GOECA and Midwest, as grantors, dated as of
June 30, 2006 (the “Security Agreement”).

 

C.            In connection with the transaction contemplated by the Asset
Purchase Agreement, Norco and GOECA entered into that certain Sublease of Norco
Breaking Room dated as of July 1, 2006 (the “Sublease”), pursuant to which Norco
sublet to GOECA certain real property, together with certain buildings and other
improvements.

 

D.            In connection with the transaction contemplated by the Asset
Purchase Agreement and pursuant to the Subscription Agreement for Class B Units
in Exchange for Contribution of Assets by and among Moark, Cutler, Hi Point and
MEC, as subscribers (the “Subscribers”), and Golden Oval, as seller, the
Subscribers purchased and assigned to LOL 697,350 shares of Golden Oval’s
Class B Units (the “Class B Units”).

 

E.             The Buyer Parties, on the one hand, and the Seller Parties and
LOL, on the other hand, have alleged various claims against each other arising
under the Asset Purchase Agreement, the Ancillary Agreements and related
obligations.

 

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F.             The Buyer Parties have indicated to LOL that in order to maximize
the value of their business they are actively seeking to refinance their
existing senior secured indebtedness and that such refinancing requires the
accommodations made by LOL pursuant to this Amendment.

 

G.            LOL has recognized the need, and is willing, subject to the terms
and conditions of this Amendment, to enter into certain financial accommodations
in order for the Buyer Parties to maximize their going concern value.

 

H.            Capitalized terms not defined herein shall have the meanings set
forth in the Asset Purchase Agreement.

 

NOW THEREFORE, in consideration of the foregoing and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
Parties, intending to be legally bound, hereby consent and agree as follows:

 

1.             Definitions.

 

“Affiliate” shall mean, with respect to any person or entity, the predecessors,
successors, and assigns of such Person, and any partner, principal, subsidiary,
parent, holding company, division, shareholder, affiliate, officer, director,
employee, agent, or attorney of such Person, in each case in such capacity, and
the predecessors, successors, and assigns of each of the foregoing.

 

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

 

“Cause of Action” shall mean all actions, claims, causes of action, liabilities,
obligations, rights, suits, damages, judgments, remedies, demands, setoffs,
defenses, recoupments, crossclaims, counterclaims, third-party claims, indemnity
claims, contribution claims or any other claims whatsoever, whether known or
unknown, matured or unmatured, fixed or contingent, liquidated or unliquidated,
disputed or undisputed, suspected or unsuspected, foreseen or unforeseen, direct
or indirect, choate or inchoate, existing or hereafter arising, in law, equity
or otherwise, based in whole or in part upon any act or omission or other event.

 

“Parties” shall have the meaning set forth in the recitals to this Amendment.

 

“Refinancing Effective Date” shall mean the date on which the Buyer Parties
consummate the refinancing of their existing senior secured indebtedness.

 

2.             Purchase Price Reduction.  The purchase price as set forth in the
Asset Purchase Agreement shall be reduced by seventeen million dollars
($17,000,000.00) plus a sum equal to the Earn Out Payment (the “Purchase Price
Reduction”).  The Purchase Price Reduction shall be accomplished at such time by
(i) cancellation of the principal amount owed under the Note (including
cancellation of the Security Agreement) and (ii) cancellation of the Buyer
Parties’ obligations with respect to the Earn Out Payment.  In connection with
the Purchase Price

 

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Reduction (and the issuance of the 2008 Warrant), LOL shall return the original
Note to Buyer Parties marked “cancelled” and shall take such actions as are
reasonably necessary to release the Security Interest (as that term is defined
in the Security Agreement).  LOL shall also surrender the 2006 Warrant for
cancellation by Golden Oval.

 

3.             Warrants.  In consideration of the agreement by LOL to release
the Buyer Parties from their obligation to pay all interest accrued on the Note
(an amount equal to $3,241,643.77 as of the date hereof), Golden Oval shall
grant to LOL the right to acquire membership units in Golden Oval on the
conditions and at the price set forth in the warrants attached hereto as
Exhibit B (the “2008 Warrant”).

 

4.             Sublease Modification.  The Sublease hereby is amended pursuant
to the terms of the First Amendment to Sublease, attached hereto as Exhibit C
(the “First Sublease Amendment”).

 

5.             Indemnification.  Article 13 of the Asset Purchase Agreement is
deleted in its entirety.

 

6.             [RESERVED.]

 

7.             Conversion of Class B Units.  The Class B Units will be converted
into an equal number of Class A Common Units of Golden Oval and all rights held
(or deemed held) by LOL in connection with its ownership of the Class B Units
will terminate upon such conversion.

 

8.             Releases.

 

(a)                                  Release of Seller Parties and LOL.  Each of
the Buyer Parties, on behalf of itself and each of its Affiliates, hereby
release and discharge, absolutely, completely, unconditionally, irrevocably and
forever, each of the Seller Parties and LOL from any and all Causes of Action
accruing prior to the date hereof, including, but not limited to, those arising
under the Shell Egg Supply Agreement and the Asset Purchase Agreement and
documents related thereto, including but not limited to the Ancillary
Agreements, as each may have been amended; provided, however, that the foregoing
release shall not apply to (i) the obligations of LOL or any of the Seller
Parties pursuant to this Amendment, the 2008 Warrant or the First Sublease
Modification or (ii) any obligation of LOL or any of the Seller Parties under
any Ancillary Agreement arising on or after the date hereof.  Each Buyer Party
shall be deemed to have granted such release notwithstanding that it may
hereafter discover facts in addition to, or different from, those which it now
knows or believes to be true, and without regard to the subsequent discovery or
existence of such different or additional facts, and such Buyer Party expressly
waives any and all rights that it may have under any statute or common law
principle, including Section 1542 of the California Civil Code, which would
limit the effect of such releases to those Causes of Action actually known or
suspected to exist at the time of execution of the release.  Section 1542 of

 

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the California Civil Code generally provides as follows: “a general release does
not extend to claims which the creditor does not know or suspect to exist in his
favor at the time of executing the release, which if known by him may have
materially affected his settlement with the debtor.”  Each of the Buyer Parties
further represents, warrants, and covenants that it has not sold, assigned,
granted, conveyed, or transferred to any other person or entity any Cause of
Action released by such Buyer Party pursuant to this Amendment.

 

(b)                                 Release of Buyer Parties.  Each of the
Seller Parties and LOL, on behalf of itself and each of its Affiliates, hereby
release and discharge, absolutely, completely, unconditionally, irrevocably and
forever, each of the Buyer Parties from any and all Causes of Action accruing
prior to the date hereof, including, but not limited to, those arising under the
Shell Egg Supply Agreement and the Asset Purchase Agreement and documents
related thereto, including but not limited to the Ancillary Agreements, as each
may have been amended; arising under the Asset Purchase Agreement; provided,
however, that the foregoing release shall not apply to (i) the obligations of
any of the Buyer Parties pursuant to this Amendment, the 2008 Warrant or the
First Sublease Modification; (ii) any obligation of any of the Buyer Parties
under any Ancillary Agreement arising after the date hereof; or (iii) amounts
currently owing to the Seller Parties or LOL under any Ancillary Agreement or
the Shell Egg Supply Agreement.  Each Seller Party and LOL shall be deemed to
have granted such release notwithstanding that it may hereafter discover facts
in addition to, or different from, those which it now knows or believes to be
true, and without regard to the subsequent discovery or existence of such
different or additional facts, and such Seller Party and LOL expressly waives
any and all rights that it may have under any statute or common law principle,
including Section 1542 of the California Civil Code, which would limit the
effect of such releases to those Causes of Action actually known or suspected to
exist at the time of execution of the release.  Section 1542 of the California
Civil Code generally provides as follows: “a general release does not extend to
claims which the creditor does not know or suspect to exist in his favor at the
time of executing the release, which if known by him may have materially
affected his settlement with the debtor.”  Each of the Seller Parties and LOL
further represents, warrants, and covenants that it has not sold, assigned,
granted, conveyed, or transferred to any other person or entity any Cause of
Action released by such Seller Party or LOL pursuant to this Amendment.

 

9.             Representations, Warranties and Covenants.

 

(a)                                  Each Party represents and warrants to the
other Parties that its execution, delivery, and performance of this Amendment
are within the power and authority of such Party and have been duly authorized
by such Party.  The Buyer Parties expressly represent that their execution,
delivery, and

 

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performance of this Amendment has been duly authorized by Golden Oval’s manager
and GOECA’s general partner.

 

(b)                                 Each Party represents and warrants to the
other Parties that this Amendment has been duly executed and delivered by it and
constitutes its legal, valid and binding obligation, enforceable in accordance
with the terms hereof.

 

(c)                                  Each Party represents and warrants to the
other Parties that neither the execution and delivery of this Amendment nor
compliance with the terms and provisions hereof will violate, conflict with, or
result in a breach of its certificate of incorporation or bylaws or other
constitutive document, any applicable law or regulation, any order, writ,
injunction or decree of any court or governmental authority or agency, or any
agreement or instrument to which it is a party or by which it is bound or to
which it is subject.

 

(d)                                 No Party shall take any action that would
delay or frustrate the occurrence of the transactions contemplated by this
Amendment or the transactions contemplated by any other agreements or documents
referenced in this Amendment.

 

(e)                                  Each Party shall take all actions necessary
or appropriate to consummate the transactions contemplated by this Amendment.

 

(f)                                    Each Party represents and warrants to
each other Party that, prior to entering into this Amendment, they have
considered the terms of this Amendment and the alternatives thereto and have
concluded that: (i) the consideration they are giving to the other Party
pursuant to this Amendment is supported by fair and valuable consideration and
(ii) the relief granted by the Seller Parties and LOL under this Amendment is
necessary to maintain the Buyer Parties’ businesses.

 

10.           No Other Effect.  Other than as set forth herein or in the 2008
Warrant or the First Sublease Modification, this Amendment shall not otherwise
affect, modify, revoke or amend the Asset Purchase Agreement or any of the
documents related thereto.

 

11.           Confidentiality.  Except as required by law, the Buyer Parties
will maintain in confidence, and cause their respective Affiliates to maintain
in confidence, the existence, terms and conditions of this Amendment, the 2008
Warrant and the First Sublease Modification completely confidential and will not
discuss or disclose any aspect of such documents without the express written
consent of the Seller Parties and LOL.

 

12.           Miscellaneous Provisions.

 

(a)                                  Successors and Assigns.  This Amendment is
intended to bind and inure to the benefit of each of the Parties and each of
their respective successors, assigns, heirs, executors, administrators, and
representatives.

 

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(b)                                 Governing Law; Jurisdiction.  This Amendment
will be governed by the laws of the State of Minnesota, without regard to its
conflicts of laws principles that would require the law of another jurisdiction
to be applied.  Each of the Parties irrevocably (a) submits and consents in
advance to the to the exclusive jurisdiction of any federal or state court in
the State of Minnesota for the purpose of any action or proceeding arising out
of or relating to this Amendment; (b) agrees that all claims in respect to such
action or proceeding may be heard and determined exclusively in such courts; and
(c) waives any objection that such Party may have based upon lack of personal
jurisdiction, improper venue, or forum non conveniens.

 

(c)                                  Entire Agreement.  This Amendment, together
with the 2008 Warrant and the First Sublease Modification, constitutes the
complete and entire agreement among the Parties with respect to the matters
contained in this Amendment, and supersedes all prior agreements, negotiations,
and discussions between the Parties with respect thereto.

 

(d)                                 Non-Reliance.  Each of the Parties
acknowledges that, in entering into this Amendment, it is not relying upon any
representations or warranties made by anyone other than those representations,
warranties, terms and provisions expressly set forth in this Amendment and the
exhibits and schedules hereto.

 

(e)                                  Notices.  Any notice required or desired to
be served, given or delivered under this Amendment shall be in writing, and
shall be deemed to have been validly served, given or delivered if provided by
personal delivery, or upon receipt of fax delivery, as follows:

 

(i)                                     if to the Buyer Parties, to Dana
Persson, Golden Oval Eggs, LLC, 1800 Park Avenue East, Renville, Minnesota
56284;

 

With copies to Mark Hanson, Stoel Rives LLP 33 South Sixth Street, Minneapolis,
Minnesota 55402

 

(ii)                                  if to LOL or any of the Seller Parties,
to: Daniel Knutson, Land O’Lakes, Inc., 4001 Lexington Avenue North, Arden
Hills, Minnesota 55126,

 

With copies to: Land O’Lakes, Inc., Law Department, MS 2500, P.O. Box 64101, St.
Paul,. Minnesota 55164-0101, Attn: John Curran and Brad B. Erens, Jones Day, 77
West Wacker, Chicago, Illinois, 60601-1692, fax: 312-782-8585.

 

(f)                                    Amendment; Waiver.  It is expressly
understood and agreed that this Amendment may not be altered, amended, modified
or otherwise changed in any respect whatsoever except by a writing duly executed
by authorized representatives of each of the Parties, and the Parties further
acknowledge and agree that they will make no claim at any time or place that
this

 

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Amendment has been orally supplemented, modified, or altered in any respect
whatsoever.  In addition, no failure on the part of any party to this Amendment
to exercise, and no delay on its part in exercising, any right or remedy under
this Amendment will operate as a waiver thereof, nor will any single or partial
exercise of any right or remedy preclude any other or further exercise thereof
or the exercise of any other right or remedy.

 

(g)                                 No Admissions.  This Amendment shall in no
event be construed as or be deemed to be evidence of an admission or concession
on the part of any of the Parties with respect to any Claim, right, Cause of
Action, or remedy.  Each of the Parties denies any and all liability of any
kind, and does not concede any infirmity in the Claims or defenses which it has
asserted or would assert.  This Amendment and all negotiations, statements, and
proceedings in connection herewith shall not be offered or received into
evidence nor shall they be admissible in any action or proceeding in any court
or other tribunal or used in any way as an admission, concession, or evidence of
any liability, obligation, or wrongdoing of any nature by any Party. 
Notwithstanding the foregoing, any Party may use, or refer to this Amendment, to
the extent necessary to give effect to, declare, or enforce their respective
rights hereunder.

 

(h)                                 Headings.  The headings of this Amendment
are for reference only and shall not limit or otherwise affect the meaning
hereof.

 

(i)                                     Representation by Counsel. Each Party
acknowledges that it has been represented by counsel in connection with this
Amendment and the transactions contemplated herein.  Accordingly, any rule of
law or any legal decision that would provide any Party with a defense to the
enforcement of the terms of this Amendment against such Party based upon lack of
legal counsel shall have no application and is expressly waived.

 

(j)                                     Interpretation. This Amendment is the
product of negotiations of the Parties, and in the enforcement or interpretation
hereof, is to be interpreted in a neutral manner, and any presumption with
regard to interpretation for or against any Party by reason of that Party having
drafted or caused to be drafted this Amendment, or any portion hereof, shall not
be effective in regard to the interpretation hereof.

 

(k)                                  Partial Invalidity.  If, at any time, any
provision of this Amendment is or is deemed to be illegal, invalid, or
unenforceable in any respect under the laws of any jurisdiction, neither the
legality, validity, or enforceability of the remaining provisions hereof, nor
the legality, validity, or enforceability of such provision under the law of any
other jurisdiction, shall in any way be affected or impaired thereby.

 

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(l)                                     No Third Party Beneficiaries.  No third
party is intended to be or shall be deemed a third party beneficiary of this
Amendment or any of its terms.

 

(m)                               Counterparts.  This Amendment may be executed
in one or more counterparts, each of which shall be deemed an original and all
of which shall constitute one and the same agreement.  Delivery of an executed
signature page of this Amendment by facsimile shall be as effective as delivery
of a manually executed signature page of this Amendment.

 

[Remainder of page intentionally left blank]

 

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                IN WITNESS WHEREOF, the Parties hereto have executed, or have
caused this Amendment to be executed by their respective officers thereunto duly
authorized, effective as of the day and year first written above.

 

SELLER PARTIES:

 

MOARK, LLC

CUTLER AT ABBEVILLE, L.L.C.

 

 

 

 

 

/s/ Benjamin Dent

 

 

/s/ Benjamin Dent

 

 

 

 

 

By:   Benjamin Dent

 

By:   Benjamin Dent

 

 

 

 

 

Title: Chief Financial Officer and Treasurer

 

Title: Chief Financial Officer and Treasurer

 

 

 

 

 

 

HI POINT INDUSTRIES, LLC

L & W EGG PRODUCTS, INC.

 

 

 

 

 

/s/ Benjamin Dent

 

 

/s/ Benjamin Dent

 

 

 

 

 

 

 

By:   Benjamin Dent

 

By:   Benjamin Dent

 

 

 

 

 

 

 

Title: Chief Financial Officer and Treasurer

 

Title: Chief Financial Officer and Treasurer

 

 

 

 

 

 

 

NORCO RANCH, INC.

MOARK EGG CORPORATION

 

 

 

 

 

 

 

 

/s/ Daniel Knutson

 

 

/s/ Daniel Knutson

 

 

 

 

 

 

 

By:   Daniel Knutson

 

By:   Benjamin Dent

 

 

 

 

 

 

 

Title: Vice President

 

Title: Chief Financial Officer and Treasurer

 

 

 

 

 

 

 

 

 

LAND O’LAKES, INC.

 

 

 

 

 

 

 

 

 

/s/ Daniel Knutson

 

 

 

 

 

 

 

 

 

 

By:Daniel Knutson

 

 

 

 

 

 

 

 

 

Title: Senior Vice President and

 

 

 

 

         Chief Financial Officer

 

 

 

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BUYER PARTIES:

 

GOLDEN OVAL EGGS, LLC

GOECA, L.P.

 

 

 

 

 

 

 

By:  GOEMCA, Inc.

 

 

 

        Its General Partner

 

 

 

 

 

/s/ Thomas A. Powell

 

 

/s/ Thomas A. Powell

 

 

 

 

 

By:   Thomas A. Powell

 

By:   Thomas A. Powell

 

 

 

 

 

Title: Chief Financial Officer

 

Title: Chief Financial Officer

 

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