**Exhibit 10.3**

 

**EXTE****NSION AGREEMENT**

 

This **EXTENSIONAGREEMENT** (“Extension Agreement”), effective as of December 13,2007, is by and between GOLDEN OVAL EGGS, LLC, a limited liability companyorganized under the laws of the State of Delaware, GOECA, LP, a Delawarelimited partnership, and MIDWEST INVESTORS OF IOWA, COOPERATIVE, a cooperativeorganized under the laws of the State of Iowa (individually each a “Borrower” and collectivelythe “Borrowers”) the banks andother financial institutions or entities which are signatories hereto(individually each a “Lender” and collectively the “Lenders”), and COBANK, ACB, afederally charted instrumentality under the Farm Credit Act of 1971, asamended, one of the Lenders and as agent for the Lenders (in such capacity, the“AdministrativeAgent’’).

 

**RECITALS**

 

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

 

2.                                       The Lenders and theBorrowers entered into a First Amendment to the Amended and Restated CreditAgreement dated as of April 30, 2007 (the “First Amendment”), and enteredinto a Second Amendment to the Amended and Restated Credit Agreement dated asof October 19, 2007 (the “Second Amendment); the Credit Agreement asamended by the First Amendment and Second Amendment all together may bereferred to as the “Amended Credit Agreement”; and

 

3.                                       The Borrowers areworking diligently with ING Capital LLC (“ING”) to obtain sufficient financingto repay all existing debt arising from or related to the Amended Credit Agreement, and have asked for certain accommodationsfrom the Lenders in this regard. The Lenders are willing, upon the terms andconditions set forth herein, to extend various reporting and payment due dates set forth under theAmended Credit Agreement.

 

**AGREEMENT**

 

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

 

**Section********1.********Capitalized********Terms****.**CapitalizedtermsusedhereinandnototherwisedefinedhereinshallhavethemeaningsassignedtothemintheAmendedCreditAgreement,unlessthecontextshallotherwiserequire.

 

**Section 2. Impact of Extension on Borrowers’ Obligations.**Unless specifically provided for otherwise in this Extension Agreement, this ExtensionAgreement does not replace

 

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orsupplant the Amended Credit Agreement. Borrowers shall fully perform theirobligations under the Amended Credit Agreement unless specifically modifiedherein.

 

**Section 3. Preconditionsto Extensions.** The Lenders’ obligation to extend various performance dates under theAmended Credit Agreement shall be subject to the following conditions, all ofwhich shall be considered preconditions and continuing until all matters havebeen completed:

 

**A.****                                         Executionof this Extension Agreement by Borrowers.** This Extension Agreementshall not be effective until and unless it has been fully and properly executedby all parties hereto in multiple originals, electronic copies of which must befurnished to the Lenders on or before Thursday, December 13, 2007.

 

**B.****                                         Receiptof Binding Commitment Letter by December 14, 2007.** Onor before **December 14, 2007**, Borrowers must have received, and transmitted to Lenders, a bindingcommitment from ING (the “Commitment”) on substantially the same terms andconditions as set forth in the ING term sheet dated October 8, 2007,provided to Lenders on or about November 21, 2007, and attached hereto as Exhibit A.The terms of the ING transaction must include the repayment in full of allobligations to Lenders arising from or related to the Amended Credit Agreement,with said repayment occurring on or before February 29, 2008.

 

**C.****                                         Compliancewith Amended Credit Agreement.** Borrowers must be in compliance with allterms and conditions of the Amended Credit Agreement, except to the extent suchperformance has been specifically excused or modified in this ExtensionAgreement.

 

**D.****                                         Paymentof Extension Fee.** Upon execution of this Agreement, Borrowersshall pay to Lenders an extension fee of $21,280.

 

**Section 4. Termination Date Extension–****Short Term Revolving Note.** The Termination Date as it applies to theShort Term Revolving Note shall be extended to **March 1,****2008.**

 

**Section 5. Deferral of PrincipalPayments under Tranche A and B Loans.** Principal payments due on January 20,2008 and February 20, 2008 for any Tranche A Loan or Tranche B Loan shallbe deferred until the Maturity Date of the applicable Tranche Loan.

 

**Section 6. Other Extensions.** The Amended Credit Agreement provides forcertain financial benchmarks and ratios to be achieved by Borrowers beginningon December 15, 2007. Provided that the preconditions to extensionsdescribed in Section 3 herein and contingencies set forth herein are metas required, Lenders agree that the commencement date of December 15, 2007for the Current Ratio, Working Capital, Leverage Ratio, and Fixed ChargeCoverage Ratio,

 

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andNet Worth shall be extended to March 1, 2008. The Minimum EBIDTArequirements shall not be affected by this Extension Agreement, nor shall theother reporting requirements contained in the Amended Credit Agreement.

 

**Section 7. Waiverof filing default.** The Lenders acknowledge that the Borrowers filed a two (2) weekextension for the filing of their SEC 10K and for delivery, within 90 days, oftheir August 31, 2007 audit report. To the extent that requesting thisextension creates a Default under the Amended Credit Agreement, Lenders waivesaid Default. Borrowers represent and warrant that the SEC has approved theextension request, and further represent and warrant that the Borrowers willmake the SEC 10K filing by December 14, 2007.

 

**Section 8. AdditionalReporting Requirements.** Borrowers shall participate in, on at least a bi-weekly basis, aconference call including the Lenders and such other bank group participants asshall elect to attend. Unless otherwise agreed, Borrowers shall be responsiblefor arranging said calls, and providing at least 24 hours notice to allpossible participants.

 

In addition to the reporting requirements set forthin the Amended Credit Agreement, Borrower shall also provide such additionalfinancial data and analysis as may be reasonably requested by Lenders,including but not limited to a weekly listing of all payments made by anyBorrower. Said listing shall include the name of the payee, amount of payment,date of payment, and nature of payment (i.e. “trade creditor”, “employee”, “rent”).

 

**Section 9. Terminationof Extension Agreement.** This Extension Agreement terminates without notice to Borrowers uponthe occurrence of any of the following:

 

A.                                        Withdrawal of the Commitment by 1NG for anyreason, or termination of the lending process prior to the consummation of theloan transaction set forth in the Commitment; or

 

B.                                          Termination of the lending process with INGby Borrowers, for any reason, including the unwillingness or inability ofBorrowers to consummate the transaction set forth in the Commitment; or

 

C.                                          Failure of Borrowers to make the loanpayments due to Lenders on December 20, 2007 on any Tranche A Loan orTranche B Loan, or any other Default by Borrowers under the Amended CreditAgreement, as extended.

 

Inthe event that this Extension Agreement is terminated, all deadlines andperformance dates shall be reinstated as set forth in the Amended CreditAgreement, and treated as though this Extension Agreement had never becomeeffective.

 

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**Section 10. Representations,Warranties, Authority, No Adverse Claim.**

 

**10.1 Reassertion of Representations andWarranties, No Default.** Each Borrower hereby represents that on and as of the date hereof andafter giving effect to this Extension Agreement (a) all of therepresentations and warranties contained in the Amended Credit Agreement aretrue, correct and complete in all respects as of the date hereof as though madeon and as of such date, except for changes permitted by the terms of theAmended Credit Agreement, as extended and (b) there will exist no Defaultor Event of Default under the Amended Credit Agreement as extended on such datewhich has not been specifically waived by the Lenders.

 

**10.2 Authority, No Conflict, No Consent Required.** Each Borrower represents and warrants thatsuch Borrower has the power and legal right and authority to enter into thisExtension Agreement and has duly authorized as appropriate the execution anddelivery of the Extension Agreement and other agreements and documents executedand delivered by such Borrower in connection herewith or therewith by propercompany action, and nothing herein contravenes or constitutes a default underany agreement, instrument or indenture to which such Borrower is a party or asignatory or a provision of such Borrower’s articles of organization, bylaws orany other agreement or requirement of law, or result in the imposition of anyLien on any of its property under any agreement binding on or applicable tosuch Borrower or any of its property except, if any, in favor of the Lenders.Each Borrower represents and warrants that no consent, approval orauthorization of or registration or declaration with any Person, including butnot limited to any governmental authority, is required in connection with theexecution and delivery by such Borrower of this Extension Agreement or otheragreements and documents executed and delivered by such Borrower in connectiontherewith or the performance of obligations of such Borrower therein described,except for those which the Borrower has obtained or provided and as to whichthe Borrower has delivered certified copies of documents evidencing each suchaction to the Administrative Agent. **Atrue and correct copy of appropriate Certificates for each Borrower certifyingas to incumbency and attaching the effective board resolutions authorizing theexecution of this Extension Agreement shall be tendered upon execution of thisExtension Agreement.**

 

**10.3 No Adverse Claim.** Each Borrower warrants, acknowledges andagrees that no events have been taken place and no circumstances exist at thedate hereof which would give such Borrower a basis to assert a defense, offsetor counterclaim to any claim of any Lender with respect to the Obligations.

 

**10.4 No Change in Entity Status.** Each Borrower represents and warrants thatit is a properly formed entity in good standing in its state of formation, withall requisite power and authority to conduct business in all states in which itconducts business. Each Borrower represents and warrants that the statementsand representations made in its

 

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Secretary’s Certificate effective October 19, 2007(tendered in connection with the consummation of the Second Amendment) remaintrue and correct in all respects.

 

**10.5 No Change in Organizational Documents or Officers.**Each Borrower represents and warrants that there has been no change in theorganizational and governing documents of the Borrower since the tender of theSecretary’s Certificate effective October 19, 2007, nor has there been achange in the officers of the Borrower since that time. Each Borrowerrepresents and warrants that the person executing this Extension Agreement hasbeen properly authorized and directed to do so, as set forth on the Exhibitshereto.

 

**Section 11. Affirmationof Credit Agreement, Further References, Affirmation of****Security Interest****.** The Lenders and eachBorrower acknowledge and affirm that the Credit Agreement, as previouslyamended and hereby extended, is hereby ratified and confirmed in all respectsand all terms, conditions and provisions of the Amended Credit Agreement shallremain unmodified and in full force and effect. All references in any documentor instrument to the Credit Agreement shall refer to the Amended CreditAgreement as extended. Each Borrower confirms to the Administrative Agent andthe Lenders that the Obligations are and continue to be secured by the securityinterests granted by the Borrowers in favor of the Administrative Agent for thebenefit of the Administrative Agent and the Lenders under the SecurityDocuments, and all of the terms, conditions, provisions, agreements,requirements, promises, obligations, duties, covenants and representations ofthe Borrowers under such documents and any and all other documents andagreements entered into with respect to the obligations under the AmendedCredit Agreement are incorporated herein by reference and are hereby ratifiedand affirmed in all respects by each Borrower.

 

**Section 12. Merger andIntegration, Superseding Effect.** This Extension Agreement, from and after the datehereof, embodies the entire agreement and understanding between the partieshereto and supersedes all prior oral and written agreements on the same subjectsby and between the parties hereto, occurring after the execution of the SecondAmendment, and has merged into this Extension Agreement. This ExtensionAgreement shall control with respect to the specific subjects herein.

 

**Section 13.****Severability****.** Whenever possible, eachprovision of this Extension Agreement and any other statement, instrument ortransaction contemplated hereby or thereby or relating hereto or thereto shallbe interpreted in such manner as to be effective, valid and enforceable under theapplicable law of any jurisdiction, but, if any provision of this ExtensionAgreement or any other statement, instrument or transaction contemplated herebyor thereby or relating hereto or thereto shall be held to be prohibited,invalid or unenforceable under the applicable law, such provision shall beineffective in such jurisdiction only to the extent of such prohibition,invalidity or unenforceability, without invalidating or rendering unenforceablethe remainder of such provision or the remaining provisions of this ExtensionAgreement or any other statement, instrument or transaction contemplated herebyor thereby or relating hereto or

 

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theretoin such jurisdiction, or affecting the effectiveness, validity orenforceability of such provision in any other jurisdiction.

 

**Section 14.****LegalExpenses****.** As provided in Section 9.2 of theCredit Agreement, the Borrowers agree to reimburse the Administrative Agent,upon request, for all reasonable out-of-pocket expenses (including attorneyfees and legal expenses of Kalina, Wills, Gisvold, & Clark PLLP,counsel for the Administrative Agent) incurred in connection with thenegotiation, preparation and execution of this Extension Agreement and allother documents negotiated, prepared and executed in connection therewith, andin enforcing the obligations of the Borrowers under this Extension Agreement,and to pay and save the Administrative Agent and Lenders harmless from allliability for, any stamp or other taxes which may be payable with respect tothe execution or delivery of this Extension Agreement and exhibits, whichobligations of the Borrowers shall survive any termination of the AmendedCredit Agreement.

 

**Section 15. Headings.** The headings of various sections of this Extension Agreement have beeninserted for reference only and shall not be deemed to be a part of thisExtension Agreement.

 

**Section 16. Counterparts.** This Extension Agreement may be executed inseveral counterparts as deemed necessary or convenient, each of which, when soexecuted, shall be deemed an original.

 

**Section 17. Governing Law.** AT THE OPTION OF THE ADMINISTRATIVE AGENT,THIS AGREEMENT AND THE OTHER AMENDMENT DOCUMENTS MAY BE ENFORCED IN ANY FEDERAL COURT OR COLORADOSTATE COURT SITTING IN CITY OR COUNTY OF DENVER; AND EACH BORROWER CONSENTS TOTHE JURISDICTION AND VENUE OF ANY SUCH COURT AND WAIVES ANY ARGUMENT THAT VENUEIN SUCH FORUMS IS NOT CONVENIENT. IN THE EVENT ANY BORROWER COMMENCES ANYACTION IN ANOTHER JURISDICTION OR VENUE UNIDER ANY TORT OR CONTRACT THEORYARISING DIRECTLY OR INDIRECTLY FROM THE RELATIONSHIP CREATED BY THIS AGREEMENT,THE ADMINISTRATIVE AGENT AT ITS OPTION SHALL BE ENTITLED TO HAVE THE CASETRANSFERRED TO ONE OF THE JURISDICTIONS AND VENUES ABOVE-DESCRIBED, OR IF SUCHTRANSFER CANNOT BE ACCOMPLISHED UNDER APPLICABLE LAW, TO HAVE SUCH CASEDISMISSED WITHOUT PREJUDICE.

 

**Section 18. Waiver of Jury Trial.** EACH BORROWER, THE ADMINISTRATIVE AGENT ANDEACH LENDER IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGALPROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOANDOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.

 

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IN WITNESS WHEREOF, the parties hereto have causedthis Extension Agreement to be executed as of the date and year first abovewritten.

 

 
|                        | **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   | **GOECA, LP,** as a Borrower                |
| For Purposes of Notice:     | 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:                                                 | /s/ Steven D. Craig |
|   | Name:                                               | STEVEN D. CRAIG |
|   | Title:                                              | Director |
|   |                                                |
|   | 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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