Exhibit 10.4

 

EXTENSION AND AMENDMENT AGREEMENT

 

This EXTENSION AND AMENDMENT AGREEMENT (“Agreement”), effective as of March 11,
2008, is by and between GOLDEN OVAL EGGS, LLC, a limited liability company
organized under the laws of the State of Delaware, GOECA, LP, a Delaware limited
partnership, and MIDWEST INVESTORS OF IOWA, COOPERATIVE, a cooperative organized
under the laws of the State of Iowa (individually each a “Borrower” and
collectively the “Borrowers”) the banks and other financial institutions or
entities which are signatories hereto (individually each a “Lender” and
collectively the “Lenders”), and COBANK, ACB, a federally charted
instrumentality under the Farm Credit Act of 1971, as amended, one of the
Lenders and as agent for the Lenders (in such capacity, the “Administrative
Agent”).

 

RECITALS

 

1.             The Lenders and the Borrowers entered into an Amended and
Restated Credit Agreement dated as of June 30, 2006 (the “Credit Agreement”);
and

 

2.             The Lenders and the Borrowers entered into a First Amendment to
the Amended and Restated Credit Agreement dated as of April 30, 2007 (the “First
Amendment”), entered into a Second Amendment to the Amended and Restated Credit
Agreement dated as of October 19, 2007 (the “Second Amendment), and entered into
an Extension Agreement (the “First Extension”) on December 13, 2007; the Credit
Agreement as amended by the First Amendment, Second Amendment, and First
Extension all together may be referred to as the “Amended Credit Agreement”; and

 

3.             By letter dated February 28, 2008 the Borrowers requested certain
accommodations of the Lenders. The Lenders are willing, upon the terms and
conditions set forth herein, to extend various reporting and payment due dates
set forth under the Amended Credit Agreement; and

 

4.             The Borrowers have requested that the Lenders act promptly on
this matter such that this Agreement might be signed by Tuesday, March 11, 2008,
and the Lenders have complied with said request.

 

AGREEMENT

 

NOW, THEREFORE, for good and valuable consideration, the receipt and adequacy of
which are hereby acknowledged, the parties hereto hereby covenant and agree to
be bound as follows:

 

Section 1. Recitals. The Recitals above are acknowledged as true and correct
statements of fact.

 

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Section 2. Capitalized Terms. Capitalized terms used herein and not otherwise
defined herein shall have the meanings assigned to them in the Amended Credit
Agreement, unless the context shall otherwise require. For purposes of this
Agreement the word “Detailed” shall include, but not be limited to, the
following:

 

(a)                                      In the case of a communication,
meeting, act or conduct, the date of the communication, meeting, act or conduct,
where it took place, the identity of each participant and the identity of each
person who was present, and the substance of each person’s communication;

 

(b)                                 If a communication or meeting, the identity
of the person making the particular statement so listed, the mode of
communication (for example, in writing, telephone, or in person), and the
location of each of the participants;

 

(c)                                  If an act or conduct, the details of the
act or conduct being described and what each person participating in such act or
conduct did;

 

(d)                                 When used with respect to a person, the
person’s name, present or last known address and telephone number, and the
position and business affiliation of the person;

 

(e)                                  When used with respect to a corporation or
other form of business organization, the name of such corporation or business
organization, the address of its principal place of business, its state of
incorporation or formation, and the identity of all individuals who acted on its
behalf;

 

(f)                                    When used with regard to a document or
writing, the type of document or writing (for example, letter, memorandum,
telegram, chart, report), date originated and/or identifying symbol to identify
the author, addressee, and each recipient of such document or writing.

 

Provided, for the purpose of subsection (a) and (c) above, the term Detailed
shall not require disclosure of the content of any communication with respect to
which Borrower in good faith and under applicable ethical canons believes it may
assert the attorney-client privilege.

 

Section 3. Impact of Extension on Borrowers’ Obligations. Unless specifically
provided for otherwise in this Agreement, this Agreement does not replace or
supplant the Amended Credit Agreement. Borrowers shall fully perform their
obligations under the Amended Credit Agreement unless specifically modified
herein. Nothing herein shall be deemed a waiver by the Lenders of any term,
condition, representation or covenant applicable to the Borrowers under the
Amended Credit Agreement or any of the other agreements, documents or
instruments executed and delivered in connection therewith, or of the covenants
described therein. Borrowers shall comply with any reporting requirements set
out under the Amended Credit Agreement.

 

Section 4. Preconditions and Continuing Obligations. The Lenders’ continuing
obligation to extend various performance dates under the Amended Credit
Agreement, and obligations to perform under this Agreement, shall be subject to
the following conditions, all of which shall be considered preconditions and
continuing obligations until all matters have been completed:

 

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A.            Execution of this Extension Agreement by Borrowers. This Agreement
shall not be effective until and unless it has been fully and properly executed
by all parties hereto in multiple originals, electronic copies of which must be
furnished to the Lenders on or before Tuesday, March 11, 2008.

 

B.            Compliance with Amended Credit Agreement. Borrowers must be in
compliance with all terms and conditions of the Amended Credit Agreement, and
any writing setting forth strategic alternatives as referred to in Section 8,
except to the extent such performance has been specifically excused or modified
in this Agreement.

 

C.            Payment of Extension Fee. Upon execution of this Agreement,
Borrowers shall pay to Lenders an extension fee of $21,280.

 

Section 5.  Termination Date Extension – Revolving Notes. The Termination Date
as it applies to all Revolving Loans shall be extended to July 31, 2008.

 

Section 6.  Deferral of Principal Payments under Tranche A and B Loans.
Principal payments due on March 20, 2008, April 20, 2008, May 20, 2008, June 20,
2008 and July 20, 2008 for any Tranche A Loan or Tranche B Loan shall be
deferred until the Maturity Date of the applicable Tranche Loan.

 

Section 7.  Other Extensions. The Amended Credit Agreement provides for certain
financial benchmarks and ratios to be achieved by Borrowers beginning on
March 1, 2008. Provided that the preconditions to extensions described in
Section 3 herein and the contingencies set forth herein are met as required,
Lenders agree that the commencement date of March 1, 2008 for the Current Ratio,
Working Capital, Leverage Ratio, Fixed Charge Coverage Ratio, and Net Worth
shall be extended through the Termination Date. The other reporting requirements
contained in the Amended Credit Agreement shall not be affected by this
Agreement.

 

Section 8.  Exploration of Strategic Alternatives. The Borrowers shall explore
strategic alternatives upon such terms and conditions and within such time
frames as may be mutually agreed to, in writing, by the parties.

 

Section 9.  Additional Reporting Requirements. In addition to the reporting
requirements of the Borrowers under the Amended Credit Agreement, Borrowers
shall provide to Lenders on a bi-weekly basis a Detailed description of all
efforts made and actions taken related to any agreed upon schedule or
benchmarks, including actions taken by others (such as Greene, Holcomb and
Fisher) on behalf of the Borrowers related to any strategic alternatives or
transactions. Any communications or documents referred to in the description
shall be attached thereto. Borrowers shall also provide such additional
financial data and analysis as may be reasonably requested by Lenders. Any
request for additional details shall be immediately addressed by Borrowers.
Furthermore, an inquiry, proposal, or communication which could result in a
strategic transaction shall be furnished immediately (within 48 hours of
receipt) to the Lenders.

 

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Section 10.  Minimum EBITDA. Commencing the month of March 2008, Borrowers shall
maintain a minimum monthly EBITDA of One Million Dollars ($1,000,000.00),
Borrowers shall report each month’s EBITDA to Lenders on or before the 10th
business day of the following month (the “Reporting Date”)

 

Section 11.  Thompson Escrow. The Borrowers have informed the Lenders that they
have obtained the necessary permit from the Iowa Department of Natural Resources
to remedy violations of various regulations applicable to the Borrowers’
facility in Thompson, Iowa (the “Permitted Work”). Beginning on the day after
April 2008’s Reporting Date, and continuing on the day after each month’s
Reporting Date occurring under this Agreement, the Lenders will transfer funds
in the Monthly Escrow Amount (as defined hereafter) from the Borrowers’ account
to an interest bearing escrow account maintained by Lenders and established to
finance the costs and expenses associated with the Permitted Work. The Monthly
Escrow Amount is a sum equal to the amount by which the previous month’s EBITDA
exceeds the monthly EBITDA of One Million Dollars ($1,000,000), up to Two
Hundred Thousand Dollars ($200,000).

 

Section 12.  Events of Default. The occurrence of any one or more of the
following events shall constitute an Event of Default.

 

A.

 

The Borrowers shall fail to comply with any term or condition of this Agreement.

 

 

 

B.

 

The Borrowers shall fail to comply with any term or condition of the Amended
Credit Agreement.

 

 

 

C.

 

Lenders may declare an Event of Default upon three (3) days written notice to
Borrowers if Lenders reasonably believe that the Borrowers will be unable to
comply with the benchmarks or deadlines they propose to Lenders in any written
communication, as referenced in Section 8.

 

Section 13.  Remedies Upon Default. In addition to the remedies available to the
Lenders at law or in equity upon the occurrence of an Event of Default, or as
specifically provided in the Amended Credit Agreement (including the Security
Agreement dated September 13, 2004) Borrowers specifically agree and hereby
consent to the following:

 

A.

 

On the day following a missed Section 8 deadline the following shall occur:

 

 

 

 

 

1)             the interest rate on the Revolving Loans (including the Short
Term Revolving Note) shall be calculated at the Default Rate, pursuant to
Section 2.5(a)(iv) of the June 30, 2006, Amended and Restated Credit Agreement;

 

 

 

 

 

2)             the interest rate on the Swing Line Loans shall be calculated at
the Default Rate pursuant to Section 2.5(c)(ii) of the June 30, 2006 Amended and
Restated Credit Agreement; and

 

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3) each Tranche A Advance and each Tranche B Advance shall bear interest until
paid in full or until such Event of Default is cured at a rate per annum equal
to the Default Rate as per Section 2.5(b)(vii) of the June 30, 2006 Amended and
Restated Credit Agreement. To the extent that notice is required prior to the
application of the Default Rate, Borrowers hereby waive such notice.

 

If Lenders determine, in their sole discretion, that the Borrowers are
diligently pursuing the goals set out in a separate writing , Lenders may
determine to accrue the additional interest generated by the use of the default
interest rates, until completion of the strategic transaction described in the
separate writing, and related to which the deadline was missed.

 

Section 14. Representations, Warranties, Authority, No Adverse Claim.

 

14.1 Reassertion of Representations and Warranties, No Default. Each Borrower
hereby represents that on and as of the date hereof and after giving effect to
this Agreement (a) all of the representations and warranties contained in the
Amended Credit Agreement are true, correct and complete in all respects as of
the date hereof as though made on and as of such date, except for changes
permitted by the terms of the Amended Credit Agreement, as extended and
(b) there will exist no Default or Event of Default under the Amended Credit
Agreement as extended on such date which has not been specifically waived by the
Lenders.

 

14.2 Authority, No Conflict, No Consent Required. Each Borrower represents and
warrants that such Borrower has the power and legal right and authority to enter
into this Agreement and has duly authorized as appropriate the execution and
delivery of the Agreement and other agreements and documents executed and
delivered by such Borrower in connection herewith or therewith by proper company
action, and nothing herein contravenes or constitutes a default under any
agreement, instrument or indenture to which such Borrower is a party or a
signatory or a provision of such Borrower’s articles of organization, bylaws or
any other agreement or requirement of law, or result in the imposition of any
Lien on any of its property under any agreement binding on or applicable to such
Borrower or any of its property except, if any, in favor of the Lenders. Each
Borrower represents and warrants that no consent, approval or authorization of
or registration or declaration with any Person, including but not limited to any
governmental authority, is required in connection with the execution and
delivery by such Borrower of this Agreement or other agreements and documents
executed and delivered by such Borrower in connection therewith or the
performance of obligations of such Borrower therein described, except for those
which the Borrower has obtained or provided and as to which the Borrower has
delivered certified copies of documents evidencing each such action to the
Administrative Agent. A true and correct copy of appropriate Certificates for
each Borrower certifying as to incumbency and attaching the effective board
resolutions authorizing the execution of this Agreement shall be tendered upon
execution of this Agreement. Original signatures shall be provided within five
(5) days of the date hereof.

 

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14.3 No Adverse Claim. Each Borrower warrants, acknowledges and agrees that no
events have been taken place and no circumstances exist at the date hereof which
would give such Borrower a basis to assert a defense, offset or counterclaim to
any claim of any Lender with respect to the Obligations.

 

14.4 No Change in Entity Status. Each Borrower represents and warrants that it
is a properly formed entity in good standing in its state of formation, with all
requisite power and authority to conduct business in all states in which it
conducts business., Each Borrower represents and warrants that the statements
and representations made in its Secretary’s Certificate effective October 19,
2007 (tendered in connection with the consummation of the Second Amendment)
remain true and correct in all respects.

 

14.5 No Change in Organizational Documents or Officers. Each Borrower represents
and warrants that there has been no change in the organizational and governing
documents of the Borrower since the tender of the Secretary’s Certificate
effective October 19, 2007, nor has there been a change in the officers of the
Borrower since that time. Each Borrower represents and warrants that the person
executing this Agreement has been properly authorized and directed to do so, as
set forth on the Exhibits hereto.

 

14.6 Independent Advice. This Agreement is made at the request of and as an
accommodation to the Borrower. The Borrower has either been advised by
independent legal counsel of its choice or knowingly and voluntarily elected not
to rely on the advice of counsel. Borrower has independently evaluated its legal
and business options prior to entering into this Agreement. Borrower is not
relying on Lenders or Administrative Agent for legal or business advice. This
Agreement represents the free and voluntary act of Borrower.

 

Section 15. Affirmation of Credit Agreement, Further References, Affirmation of
Security Interest. The Lenders and each Borrower acknowledge and affirm that the
Credit Agreement, as previously amended and hereby further extended, is hereby
ratified and confirmed in all respects and all terms, conditions and provisions
of the Amended Credit Agreement shall remain unmodified and in full force and
effect. All references in any document or instrument to the Credit Agreement
shall refer to the Amended Credit Agreement as extended. Each Borrower confirms
to the Administrative Agent and the Lenders that the Obligations are and
continue to be secured by the security interests granted by the Borrowers in
favor of the Administrative Agent for the benefit of the Administrative Agent
and the Lenders under the Security Documents, and all of the terms, conditions,
provisions, agreements, requirements, promises, obligations, duties, covenants
and representations of the Borrowers under such documents and any and all other
documents and agreements entered into with respect to the obligations under the
Amended Credit Agreement are incorporated herein by reference and are hereby
ratified and affirmed in all respects by each Borrower.

 

Section 16. Merger and Integration, Superseding Effect. This Agreement, from and
after the date hereof, embodies the entire agreement and understanding between
the parties hereto and supersedes all prior oral and written agreements,
including any and all drafts of this

 

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Agreement which may have been considered by the parties hereto, on the same
subjects by and between the parties hereto, occurring after the execution of the
Second Amendment, which have has merged into this Agreement. This Agreement
shall control with respect to the specific subjects herein.

 

Section 17. Severability. Whenever possible, each provision of this Agreement
and any other statement, instrument or transaction contemplated hereby or
thereby or relating hereto or thereto shall be interpreted in such manner as to
be effective, valid and enforceable under the applicable law of any
jurisdiction, but, if any provision of this Agreement or any other statement,
instrument or transaction contemplated hereby or thereby or relating hereto or
thereto shall be held to be prohibited, invalid or unenforceable under the
applicable law, such provision shall be ineffective in such jurisdiction only to
the extent of such prohibition, invalidity or unenforceability, without
invalidating or rendering unenforceable the remainder of such provision or the
remaining provisions of this Agreement or any other statement, instrument or
transaction contemplated hereby or thereby or relating hereto or thereto in such
jurisdiction, or affecting the effectiveness, validity or enforceability of such
provision in any other jurisdiction.

 

Section 18. Legal Expenses. As provided in Section 9.2 of the Credit Agreement,
the Borrowers agree to reimburse the Administrative Agent, upon request, for all
reasonable out-of-pocket expenses (including attorney fees and legal expenses of
Kalina, Wills, Gisvold, & Clark PLLP, counsel for the Administrative Agent)
incurred in connection with the negotiation, preparation and execution of this
Agreement and all other documents negotiated, prepared and executed in
connection therewith, and in enforcing the obligations of the Borrowers under
this Agreement, and to pay and save the Administrative Agent and Lenders
harmless from all liability for, any stamp or other taxes which may be payable
with respect to the execution or delivery of this Agreement and exhibits, which
obligations of the Borrowers shall survive any termination of the Amended Credit
Agreement.

 

Section 19. Headings. The headings of various sections of this Agreement have
been inserted for reference only and shall not be deemed to be a part of this
Agreement.

 

Section 20. Counterparts. This Agreement may be executed in several counterparts
as deemed necessary or convenient, each of which, when so executed, shall be
deemed an original.

 

Section 21. Governing Law. AT THE OPTION OF THE ADMINISTRATIVE AGENT, THIS
AGREEMENT MAY BE ENFORCED IN ANY FEDERAL COURT OR COLORADO STATE COURT SITTING
IN CITY OR COUNTY OF DENVER; AND EACH BORROWER CONSENTS TO THE JURISDICTION AND
VENUE OF ANY SUCH COURT AND WAIVES ANY ARGUMENT THAT VENUE IN SUCH FORUMS IS NOT
CONVENIENT. IN THE EVENT ANY BORROWER COMMENCES ANY ACTION IN ANOTHER
JURISDICTION OR VENUE UNIDER ANY TORT OR CONTRACT THEORY ARISING DIRECTLY OR
INDIRECTLY FROM THE RELATIONSHIP CREATED BY THIS AGREEMENT, THE ADMINISTRATIVE
AGENT AT ITS OPTION SHALL BE ENTITLED TO HAVE THE CASE TRANSFERRED TO ONE OF THE
JURISDICTIONS AND VENUES ABOVE-DESCRIBED, OR IF SUCH TRANSFER CANNOT BE
ACCOMPLISHED UNDER

 

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APPLICABLE LAW, TO HAVE SUCH CASE DISMISSED WITHOUT PREJUDICE.

 

Section 22. Waiver of Jury Trial. EACH BORROWER, THE ADMINISTRATIVE AGENT AND
EACH LENDER IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL
PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
as of the date and year first above written.

 

 

 

GOLDEN OVAL EGGS, LLC,
as a Borrower and the Borrowers’ Agent

 

 

 

By :

  /s/ Thomas A. Powell

 

Thomas A. Powell, Chief Financial Officer

 

 

 

 

 

MIDWEST INVESTORS OF IOWA,

 

COOPERATIVE, as a Borrower

 

 

 

 

 

By :

  /s/ Thomas A. Powell

 

Thomas A. Powell, Chief Financial Officer

 

 

 

 

Address for the Borrowers
For Purposes of Notice:

GOECA, LP, as a Borrower
By its General Partner GOEMCA, Inc.

1800 Park Avenue East

 

Renville, MN 56284

By :

  /s/ Thomas A. Powell

Fax: (320) 329-3276

Thomas A. Powell, Chief Financial Officer

Attention:Thomas A. Powell

 

 

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COBANK, ACB, as a Lender and as the

 

Administrative Agent

 

 

 

By:

     /s/ Ronald P. Seigley

 

Name:

      RONALD P. SEIGLEY

 

Title:

        VICE PRESIDENT

 

 

 

Address for all notices:

 

5500 South Quebec Street

 

Greenwood Village, CO 80111

 

PO. Box 5110

 

Denver, CO 80217

 

Attention: Ron Seigley

 

Fax: (303) 740-4021

 

 

 

 

 

METROPOLITAN LIFE INSURANCE

 

COMPANY, as a Bank and Lender (as to the Short

 

Term Revolving Note)

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

 

 

Address for all notices:

 

4401 Westown Parkway, Suite 220

 

West Des Moines, IA 50266

 

Fax: (515) 223-0757

 

Attention: Tony Jennings

 

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