EXHIBIT 10.2

 

THE SECURITIES REPRESENTED BY THIS WARRANT AND THE OTHER SECURITIES ISSUABLE
UPON EXERCISE HEREOF MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO (i) AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
(ii) TO THE EXTENT SUCH APPLICABLE, RULE 144 UNDER SUCH ACT (OR ANY SIMILAR RULE
UNDER SUCH ACT RELATING TO THE DISPOSITION OF SECURITIES) OR (iii) ANOTHER
EXEMPTION FROM REGISTRATION UNDER SUCH ACT, THE AVAILABILITY OF WHICH SHALL BE
THE SUBJECT OF AN OPINION OF COUNSEL, SUCH OPINION TO BE REASONABLY SATISFACTORY
TO THE COMPANY.

 

WARRANT

 

To Subscribe for and Purchase Units of

 

GOLDEN OVAL EGGS, LLC

 

THIS CERTIFIES THAT, for value received, LAND O’LAKES, INC., a Minnesota
cooperative corporation (herein called “Purchaser”), is, subject to the
limitations and conditions described herein, entitled to subscribe for and
purchase from GOLDEN OVAL EGGS, LLC, a Delaware limited liability company
(herein called the “Company”), at any time, at Purchaser’s discretion, on or
after February 15, 2008 (the “Vesting Date”), to and including the seventh
anniversary of the Vesting Date (the “Expiration Date”), up to 880,492 Units
(subject to adjustment as provided herein, each, a “Warrant Unit” and, together,
the “Warrant Units”) of Class A Convertible Preferred Units of the Company
(“Class A Preferred”) at the exercise price of $0.01 per Warrant Unit (the
“Exercise Price”) payable in cash or check.  The amount and kind of securities
obtainable pursuant to the purchase rights granted hereunder and the purchase
price for such securities are subject to adjustment pursuant to the provisions
contained in this Warrant.

 

This Warrant has been issued concurrent with that certain Amendment to Asset
Purchase Agreement dated February 15, 2008 between the Company and affiliates of
the Purchaser (the “Amendment”).  Capitalized terms used herein and not
otherwise defined shall have the meaning set forth in the Amendment.

 

This Warrant is subject to the following provisions, terms and conditions:

 

1.             The purchase rights represented by this Warrant may be exercised
by the holder hereof, in whole or in part, at any time and from time to time
after the Vesting Date to and including the Expiration Date, by written notice
of exercise delivered to the Company ten (10) days prior to the intended date of
exercise and by the surrender of this Warrant at the principal office of the
Company and upon payment to it by cash or check of the aggregate Exercise Price
for the total Warrant Units to be purchased.  The Company agrees that the
Warrant Units so purchased shall be and are deemed to be issued to the holder
hereof as the record owner of such Warrant Units as of the close of business on
the date on which this Warrant shall have been surrendered and payment

 

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made for such Warrant Units as aforesaid.  Subject to the provisions of the next
succeeding paragraph, certificates for the Class A Preferred so purchased shall
be promptly delivered to the holder hereof, not exceeding five (5) business
days, after the rights represented by this Warrant shall have been so
exercised.  Unless this Warrant has expired or all of the purchase rights
represented hereby have been exercised, the Company shall prepare a new Warrant,
substantially identical hereto, representing the purchase rights formerly
represented by this Warrant that have not expired or been exercised and shall
within such five (5) business day period deliver such new Warrant to the person
designated for delivery in such exercise notice.

 

2.             The issuance of certificates of Class A Preferred upon exercise
of this Warrant shall be made without charge to the holder hereof for any
issuance tax in respect thereof, if issued to the holder, or other cost incurred
by the Company in connection with such exercise.

 

3.             The Company covenants and agrees that all Class A Preferred that
may be issued upon the exercise of the purchase rights represented by this
Warrant have been duly authorized and will, upon issuance, be validly issued,
fully paid and nonassessable and free from all liens and charges with respect to
the issuance thereof.  The Company further covenants and agrees that during the
period within which the purchase rights represented by this Warrant may be
exercised, the Company will at all times have authorized, and reserved for the
purpose of issue or transfer upon exercise of the purchase rights evidenced by
this Warrant, a sufficient number of its Class A Preferred to provide for the
exercise of the purchase rights represented by this Warrant.  The Company shall
not close its books against the transfer of this Warrant or of any security
issuable upon exercise of this Warrant or conversion of the Class A Preferred in
any manner that interferes with the timely and proper exercise of this Warrant.

 

4.             Notwithstanding any provision hereof, if an exercise of any
portion of this Warrant is to be made in connection with a registered public
offering or a sale of the Company, the exercise of any portion of this Warrant
may, at the election of the holder hereof, be conditioned upon the consummation
of the public offering or sale of the Company in which case such exercise shall
not be deemed to be effective until the consummation of such transaction.

 

5.             The above provisions are, however, subject to the following:

 

(a)           If any capital reorganization or reclassification of the equity
interests of the Company, or consolidation or merger of the Company with another
person or business enterprise, or the sale of all or substantially all of its
assets to another person or business enterprise shall be effected in such a way
that holders of the Company’s Class A Common Units shall be entitled to receive
stock, securities or assets with respect to or in exchange for Units, then, as a
condition of such reorganization, reclassification, consolidation, merger or
sale, lawful and adequate provision shall be made whereby the holder hereof
shall thereafter have the right to purchase and receive, upon the basis and upon
the terms and conditions specified in this Warrant and in lieu of the Units
immediately theretofore purchasable and receivable upon the exercise of the
purchase rights represented hereby, such units, securities or assets as may be
issued or payable with respect to or in exchange for a number of outstanding
Units equal to the number of Units immediately theretofore purchasable and
receivable upon the exercise of the purchase rights represented hereby had such
reorganization, reclassification, consolidation, merger or sale not taken place,
and in any such case

 

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appropriate provision shall be made with respect to the purchase rights and
other interests of the holder of this Warrant to the end that the provisions
hereof shall thereafter be applicable, as nearly as may be, in relation to any
equity interests, securities or assets thereafter deliverable upon the exercise
hereof, including the exercise price, which shall not exceed the Exercise
Price.  The Company shall not effect any such consolidation, merger or sale,
unless prior to the consummation thereof the successor (if other than the
Company) resulting from such consolidation or merger or the purchaser of such
assets shall assume, by written instrument executed and mailed to the registered
holder hereof at the last address of such holder appearing on the books of the
Company, the obligation to deliver to such holder such equity interests,
securities or assets as, in accordance with the foregoing provisions, such
holder may be entitled to purchase.

 

(B)           IN THE EVENT THE COMPANY AT ANY TIME OR FROM TIME TO TIME AFTER
THE DATE HEREOF SHALL DECLARE, ORDER, PAY OR MAKE A DIVIDEND OR OTHER
DISTRIBUTION (INCLUDING WITHOUT LIMITATION ANY DISTRIBUTION OF CASH, ADDITIONAL
UNITS OR OTHER SECURITIES, PROPERTY OR OPTIONS, BY WAY OF DIVIDEND OR SPIN-OFF,
RECLASSIFICATION, RECAPITALIZATION OR SIMILAR CORPORATE REARRANGEMENT OR
OTHERWISE) ON UNITS, THEN, AND IN EACH SUCH CASE, THE HOLDER OF THIS WARRANT
SHALL BE ENTITLED TO RECEIVE UPON THE EXERCISE OR CONVERSION OF THIS WARRANT AT
ANY TIME ON OR AFTER SUCH RECORD DATE, THE NUMBER OF SHARES OF CLASS A PREFERRED
CONVERTIBLE UNITS TO BE RECEIVED UPON EXERCISE OR CONVERSION OF THIS WARRANT
DETERMINED AS PROVIDED HEREIN AND, IN ADDITION AND WITHOUT FURTHER PAYMENT, SUCH
DIVIDENDS OR OTHER DISTRIBUTION TO WHICH SUCH HOLDER WOULD HAVE BEEN ENTITLED BY
WAY OF SUCH DIVIDEND OR OTHER DISTRIBUTION AND SUBSEQUENT DIVIDENDS AND OTHER
DISTRIBUTIONS THAT SUCH HOLDER WOULD HAVE BEEN ENTITLED TO THROUGH THE DATE OF
EXERCISE IF SUCH HOLDER HAD (X) EXERCISED THIS WARRANT AND CONVERTED SUCH
RESULTING CLASS A PREFERRED UNITS TO CLASS A COMMON UNITS, IF APPLICABLE,
IMMEDIATELY PRIOR TO SUCH RECORD DATE AND (Y) RETAINED ANY STOCK OR OTHER
SECURITIES ISSUED IN CONNECTION WITH SUCH DIVIDEND OR OTHER DISTRIBUTION THROUGH
THE DATE OF EXERCISE.

 

(c)           In case any time:

 

(i)            the Company shall pay any cash distribution on its Units;

 

(ii)           the Company shall pay any dividend payable in equity interests
upon its Units or make any distribution (other than cash) to the holders of its
Units;

 

(iii)          the Company shall offer for subscription pro rata to the holders
of its Units any additional equity interests of any class or other rights;

 

(iv)          there shall be any capital reorganization, or reclassification of
the equity interests of the Company, or consolidation or merger of the Company
with, or sale of all or substantially all of its assets to, another person or
business enterprise; or

 

(v)           there shall be a voluntary or involuntary dissolution, liquidation
or winding up of the Company;

 

then, in any one or more of said cases, the Company shall give written notice,
by first-class mail, postage prepaid, addressed to the registered holder of this
Warrant at the address of such holder as

 

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shown on the books of the Company, of the date on which (aa) the books of the
Company shall close or a record shall be taken for such dividend, distribution
or subscription rights, or (bb) such reorganization, reclassification,
consolidation, merger, sale, dissolution, liquidation or winding up shall take
place, as the case may be.  Such notice shall also specify the date as of which
the holders of Units of record shall participate in such dividend, distribution
or subscription rights, or shall be entitled to exchange their Units for
securities or other property deliverable upon such reorganization,
reclassification, consolidation, merger, sale, dissolution, liquidation or
winding up, as the case may be.  Such written notice shall be given at least
twenty (20) days prior to the action in question and not less than twenty (20)
days prior to the record date or the date on which the Company’s transfer books
are closed in respect thereto.

 

6.             THE COMPANY SHALL NOT BY AMENDMENT OF ITS AMENDED AND RESTATED
LIMITED LIABILITY COMPANY AGREEMENT (THE “OPERATING AGREEMENT”) OR THROUGH ANY
REORGANIZATION, TRANSFER OF ASSETS, CONSOLIDATION, COMBINATION, MERGER,
DISSOLUTION, ISSUANCE OR SALE OF SECURITIES, RECAPITALIZATION, RECLASSIFICATION
OR ANY OTHER VOLUNTARY ACTION, AVOID OR SEEK TO AVOID THE OBSERVANCE OR
PERFORMANCE OF ANY OF THE PROVISIONS OF THIS WARRANT OR TO MODIFY, RESCIND OR
LIMIT THE RIGHTS, PRIVILEGES AND PREFERENCES OF THE CLASS A PREFERRED BUT SHALL
AT ALL TIMES IN GOOD FAITH ASSIST IN THE CARRYING OUT OF ALL OF THE PROVISIONS
OF THIS WARRANT AND SHALL TAKE ALL SUCH ACTION AS THE HOLDER MAY REASONABLY
REQUEST TO PRESERVE AND MAINTAIN THE RIGHTS, PRIVILEGES AND PREFERENCES OF THE
CLASS A PREFERRED.

 

7.             This Warrant shall not entitle the holder hereof to any voting
rights or other rights as a Member or Unit owner of the Company.  In the absence
of affirmative action by the holder to purchase Class A Preferred pursuant to
the purchase rights granted hereunder, no enumeration herein of the rights or
privileges of the holder shall give rise to any liability of such holder for the
Exercise Price of Class A Preferred acquirable by exercise hereof or as a holder
of Units of the Company.

 

8.             (a)           The holder understands that this Warrant and, until
such time as Class A Preferred issuable upon exercise thereof have been
registered under the Securities Act of 1933 (the “Securities Act”) or otherwise
may be sold by a holder under Rule 144 under the Securities Act, the
certificates for such Class A Preferred will bear the restrictive legend under
the heading “Restrictions on Transfer” below.

 

(b)           Such legend shall be removed and the Company shall issue a
certificate without such legend to the holder of any security upon which it is
stamped, if, unless otherwise required by state securities laws, (i) the sale of
such security is registered under the Securities Act or (ii) such security is
sold pursuant to Rule 144 under the Securities Act.

 

(c)           Notwithstanding anything in this Warrant to the contrary, the
Purchaser shall not sell, assign or otherwise transfer this Warrant nor any
Class A Preferred issuable upon exercise hereof to any third party without the
prior written approval of the Company. This Warrant shall be binding upon and
inure to the benefit of the parties hereto and their successors and permitted
assigns.  Subject to the provisions of this paragraph 8 and the restrictive
legend under the heading “Restrictions on Transfer” below, this Warrant and all
rights hereunder are transferable, in whole or in part, at the principal office
of the Company by the holder hereof in person or by duly authorized attorney,
upon surrender of this Warrant properly endorsed; provided, however, that (i) 

 

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such transfer or assignment is permitted under the Securities Act and applicable
state or foreign securities laws or exceptions therefrom, (ii) the Company is
furnished with (A) written notice of the name and address of such transferee or
assignee and (B) evidence as reasonably requested by the Company to determine
the permissibility of such transfer or assignment and (iii) the transferee or
assignee agrees in writing for the benefit of the Company to be bound by all of
the provisions contained herein and acknowledges in writing for the benefit of
the Company that the transferee does not currently compete with the Company or
its business.  Every person receiving Class A Preferred as a result of an
exercise of this Warrant takes such Class A Preferred subject to the terms and
Conditions of the Operating Agreement.

 

(d)           Restrictions on Transfer.  The certificates for Class A Preferred
issued upon exercise of this Warrant shall bear the following restrictive
legend:

 

THE SECURITIES REPRESENTED BY THIS CERTIFICATE AND THE OTHER SECURITIES ISSUABLE
UPON CONVERSION HEREOF MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO (i) AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
(ii) TO THE EXTENT SUCH APPLICABLE, RULE 144 UNDER SUCH ACT (OR ANY SIMILAR RULE
UNDER SUCH ACT RELATING TO THE DISPOSITION OF SECURITIES) OR (iii) ANOTHER
EXEMPTION FROM REGISTRATION UNDER SUCH ACT, THE AVAILABILITY OF WHICH SHALL BE
THE SUBJECT OF AN OPINION OF COUNSEL, SUCH OPINION TO BE REASONABLY SATISFACTORY
TO THE COMPANY.

 

9.             Each taker and holder of this Warrant, by taking or holding the
same, consents and agrees that the bearer of this Warrant, when endorsed, may be
treated by the Company and all other persons dealing with this Warrant as the
absolute owner hereof for any purpose and as the person entitled to exercise the
rights represented by this Warrant, or to the transfer hereof on the books of
the Company, any notice to the contrary notwithstanding; but until such transfer
on such books, the Company may treat the registered holder hereof as the owner
for all purposes.

 

10.           This Warrant is exchangeable, upon the surrender hereof by the
holder hereof at the principal office of the Company, for new Warrants of like
tenor representing in the aggregate the right to subscribe for and purchase the
percentage of Warrant Units that may be subscribed for and purchased hereunder,
each of such new Warrants to represent the right to subscribe for and purchase
such percentage of Warrant Units as shall be designated by said holder hereof at
the time of such surrender.

 

11.           Upon receipt of evidence reasonably satisfactory to the Company
(an affidavit of the holder shall be satisfactory) of the ownership and the
loss, theft, destruction or mutilation of any certificate evidencing this
Warrant, and in the case of any such loss, theft or destruction, upon receipt of
indemnity reasonably satisfactory to the Company (provided that if the holder is
a financial institution or other institutional investor its own agreement shall
be satisfactory), or, in the case of any such mutilation upon surrender of such
certificate, the Company shall (at its expense) execute and deliver in lieu of
such certificate a new certificate of like kind representing the number of
Warrants represented by such lost, stolen, destroyed or mutilated certificate
and dated the date of such lost, stolen, destroyed or mutilated certificate.

 

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12.           Except as otherwise expressly provided hereunder, all notices
referred to herein shall be in writing and shall be delivered by registered or
certified mail, return receipt requested and postage prepaid, or by reputable
overnight courier service, charges prepaid, and shall be deemed to have been
given when so mailed or sent (i) to the Company, at its principal executive
offices, Attention: Dana Persson, Chief Executive Officer and (ii) to the
holder, at such holder’s address as it appears in the records of the Company
(unless otherwise indicated by any such holder).

 

13.           Any provision of this Warrant may be amended or modified in whole
or in part at any time by an agreement in writing among the Company and the
holder of this Warrant. Excepting that this Warrant may not be exercised after
the Expiration Date, no failure on the part of either the Company or the holder
of this Warrant to exercise, and no delay in exercising, any right shall operate
as a waiver thereof nor shall any single or partial exercise by either the
Company or the holder of this Warrant of any right preclude any other or future
exercise thereof or the exercise of any other right.

 

14.           References in this Warrant to paragraphs and attachments are
references to paragraphs of, and attachments to this Warrant unless otherwise
noted. The limited liability company laws of the State of Delaware shall govern
all issues concerning the relative rights of the Company and its Members and
Unit owners. All other questions concerning the construction, validity,
enforcement and interpretation of this Warrant shall be governed by the internal
law of the State of Delaware, without giving effect to any choice of law or
conflict of law provision or rule (whether of the State of Delaware or any other
jurisdictions) that would cause the application of the laws of any jurisdictions
other than the State of Delaware.

 

15.           Should any part of this Warrant for any reason be declared
invalid, such decision shall not affect the validity of the remaining portion,
which remaining portion shall remain in full force and effect as if this Warrant
had been executed with the invalid portion thereof eliminated, and it is hereby
declared the intention of the Company hereto that it would have executed the
remaining portion of this Warrant without including therein any such parts or
parts that may, for any reason, be hereafter declared invalid.

 

16.           This Warrant and the documents described herein or attached or
delivered pursuant hereto set forth the entire agreement between the Company and
the holder with respect to the transactions contemplated by this Warrant.

 

*  *  *

 

[Signature Page Follows]

 

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IN WITNESS WHEREOF, the Company has caused this Warrant to be signed by its duly
authorized officer and this Warrant to be dated as of February 15, 2008.

 

 

GOLDEN OVAL EGGS, LLC

 

 

 

 

 

 

By

/s/ Thomas A. Powell

 

 

Name: Thomas A. Powell

 

 

Title:   Chief Financial Officer

 

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