exv10w1



 







Exhibit 10.1




ASSET PURCHASE AND SALE AGREEMENT




Between




MOARK, LLC, CUTLER AT ABBEVILLE, L.L.C., HI POINT INDUSTRIES, LLC,

L & W EGG PRODUCTS, INC., NORCO RANCH, INC., AND MOARK EGG

CORPORATION,




COLLECTIVELY AS SELLER




AND




GOLDEN OVAL EGGS, LLC




AND




GOECA, LP




As Buyer




Dated as of May ____, 2006




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	 	Asset Purchase Agreement






TABLE OF CONTENTS




	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	PAGE	 
	 
	 	 	 	 	 	 	 	 
	ARTICLE 1 Definitions	 	 	 2	 
	 
	 	 	 	 	 	 	 	 
	ARTICLE 2 Sale and Purchase of Purchased Assets; Assumption of Assumed Obligations	 	 	 6	 
	 
	 	 	 	 	 	 	 	 
	 
	 	2.1	 	Purchased Assets	 	 	6	 
	 
	 	2.2	 	Assignment of Contracts	 	 	7	 
	 
	 	2.3	 	Excluded Assets	 	 	8	 
	 
	 	2.4	 	Assumed Obligations	 	 	8	 
	 
	 	2.5	 	Excluded Obligations	 	 	8	 
	 
	 	2.6	 	Schedule Updates	 	 	9	 
	 
	 	 	 	 	 	 	 	 
	ARTICLE 3 Purchase Price and Payment	 	 	10	 
	 
	 	 	 	 	 	 	 	 
	 
	 	3.1	 	Purchase Price	 	 	10	 
	 
	 	3.2	 	Initial Purchase Price	 	 	10	 
	 
	 	3.3	 	Earn-Out Payment	 	 	10	 
	 
	 	3.4	 	Allocation of Initial Purchase Price	 	 	12	 
	 
	 	 	 	 	 	 	 	 
	ARTICLE 4 Representations and Warranties of the Seller	 	 	12	 
	 
	 	 	 	 	 	 	 	 
	 
	 	4.1	 	Purchased Assets Sold “As Is” Except as Warranted	 	 	12	 
	 
	 	4.2	 	Existence and Good Standing	 	 	12	 
	 
	 	4.3	 	Due Authorization	 	 	13	 
	 
	 	4.4	 	Absence of Conflicts	 	 	13	 
	 
	 	4.5	 	Absence of Changes or Events	 	 	13	 
	 
	 	4.6	 	Business Financial Statements	 	 	13	 
	 
	 	4.7	 	Title to Assets	 	 	14	 
	 
	 	4.8	 	Compliance with Laws; Permits	 	 	14	 
	 
	 	4.9	 	Taxes	 	 	14	 
	 
	 	4.10	 	Litigation	 	 	15	 
	 
	 	4.11	 	Inventory	 	 	15	 
	 
	 	4.12	 	Contracts	 	 	15	 
	 
	 	4.13	 	Employee Matters	 	 	15	 
	 
	 	4.14	 	Environmental Matters	 	 	15	 
	 
	 	4.15	 	Labor Matters	 	 	15	 
	 
	 	4.16	 	Major Customers; Major Suppliers	 	 	16	 
	 
	 	4.17	 	Intellectual Property	 	 	16	 
	 
	 	4.18	 	Books and Records	 	 	16	 
	 
	 	4.19	 	Equipment and Fixed Assets	 	 	16	 
	 
	 	4.20	 	Insurance	 	 	16	 






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	 	4.21	 	Misrepresentations and Omissions	 	 	16	 
	 
	 	4.22	 	Purchased Assets Necessary for Business	 	 	17	 
	 
	 	 	 	 	 	 	 	 
	ARTICLE 5 Representations And Warranties Of The Buyer	 	 	17	 
	 
	 	 	 	 	 	 	 	 
	 
	 	5.1	 	Representations	 	 	17	 
	 
	 	5.2	 	Existence and Good Standing	 	 	17	 
	 
	 	5.3	 	Due Authorization	 	 	17	 
	 
	 	5.4	 	Absence of Conflicts	 	 	18	 
	 
	 	5.5	 	Litigation	 	 	18	 
	 
	 	5.6	 	Financial Capability	 	 	18	 
	 
	 	5.7	 	Misrepresentations and Omissions	 	 	18	 
	 
	 	5.8	 	Hired Employees	 	 	18	 
	 
	 	5.9	 	Financial Statements	 	 	18	 
	 
	 	 	 	 	 	 	 	 
	ARTICLE 6 Covenants Of The Seller	 	 	19	 
	 
	 	 	 	 	 	 	 	 
	 
	 	6.1	 	Covenant to Buyer	 	 	19	 
	 
	 	6.2	 	Conduct of Business	 	 	19	 
	 
	 	6.3	 	Disclosure Schedules; Notice of Developments	 	 	19	 
	 
	 	 	 	 	 	 	 	 
	ARTICLE 7 Covenants Of The Buyer And The Seller	 	 	19	 
	 
	 	 	 	 	 	 	 	 
	 
	 	7.1	 	Access to Information, Inspections	 	 	19	 
	 
	 	7.2	 	Title Evidence, Closing Fees and Proration of Utilities	 	 	20	 
	 
	 	7.3	 	Motor Vehicles	 	 	21	 
	 
	 	7.4	 	Tax Matters	 	 	21	 
	 
	 	7.5	 	Confidentiality	 	 	22	 
	 
	 	7.6	 	Payments Received	 	 	22	 
	 
	 	7.7	 	Satisfaction of Conditions	 	 	22	 
	 
	 	7.8	 	Accounts Receivable	 	 	23	 
	 
	 	7.9	 	Ancillary Agreements	 	 	23	 
	 
	 	7.10	 	HSR Act	 	 	23	 
	 
	 	 	 	 	 	 	 	 
	ARTICLE 8 Conditions Precedent To Obligations Of The Buyer	 	 	23	 
	 
	 	 	 	 	 	 	 	 
	 
	 	8.1	 	Conditions Precedent	 	 	24	 
	 
	 	8.2	 	Accuracy of Representations and Warranties	 	 	24	 
	 
	 	8.3	 	Compliance with Agreements and Covenants	 	 	24	 
	 
	 	8.4	 	No Injunctions	 	 	24	 
	 
	 	8.5	 	Intentionally Deleted	 	 	24	 
	 
	 	8.6	 	No Material Adverse Effect	 	 	24	 
	 
	 	8.7	 	Deliveries	 	 	24	 
	 
	 	8.8	 	HSR Act	 	 	24	 
	 
	 	 	 	 	 	 	 	 
	ARTICLE 9 Conditions Precedent To Obligations Of The Seller	 	 	24	 
	 
	 	 	 	 	 	 	 	 
	 
	 	9.1	 	Conditions Precedent	 	 	24	 






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	 	9.2	 	Accuracy of Representations and Warranties	 	 	24	 
	 
	 	9.3	 	Compliance with Agreements and Covenants	 	 	25	 
	 
	 	9.4	 	No Injunctions	 	 	25	 
	 
	 	9.5	 	Deliveries	 	 	25	 
	 
	 	9.6	 	HSR Act	 	 	25	 
	 
	 	 	 	 	 	 	 	 
	ARTICLE 10 Employees And Benefit Plans	 	 	25	 
	 
	 	 	 	 	 	 	 	 
	 
	 	10.1	 	Offer of Employment	 	 	25	 
	 
	 	10.2	 	Recognition	 	 	26	 
	 
	 	 	 	 	 	 	 	 
	ARTICLE 11 Closing	 	 	26	 
	 
	 	 	 	 	 	 	 	 
	 
	 	11.1	 	Closing	 	 	26	 
	 
	 	11.2	 	Deliveries by the Seller	 	 	26	 
	 
	 	11.3	 	Deliveries by the Buyer	 	 	27	 
	 
	 	 	 	 	 	 	 	 
	ARTICLE 12 Termination	 	 	27	 
	 
	 	 	 	 	 	 	 	 
	 
	 	12.1	 	Termination	 	 	27	 
	 
	 	12.2	 	Effect of Termination	 	 	28	 
	 
	 	12.3	 	Remedy Upon Breach	 	 	28	 
	 
	 	 	 	 	 	 	 	 
	ARTICLE 13 Indemnification	 	 	28	 
	 
	 	 	 	 	 	 	 	 
	 
	 	13.1	 	Excluded Assets and Excluded Obligations	 	 	28	 
	 
	 	13.2	 	Purchased Assets and Assumed Obligations	 	 	28	 
	 
	 	13.3	 	Breach of Representations and Warranties	 	 	29	 
	 
	 	13.4	 	Procedure	 	 	29	 
	 
	 	13.5	 	Payment	 	 	30	 
	 
	 	13.6	 	Sole Remedy	 	 	30	 
	 
	 	13.7	 	No Third Party Beneficiary Claims	 	 	31	 
	 
	 	13.8	 	Not Applicable to Fraud or Ancillary Agreements	 	 	31	 
	 
	 	 	 	 	 	 	 	 
	ARTICLE 14 Miscellaneous	 	 	31	 
	 
	 	 	 	 	 	 	 	 
	 
	 	14.1	 	Disclosure Schedules	 	 	31	 
	 
	 	14.2	 	Expenses	 	 	31	 
	 
	 	14.3	 	Amendment	 	 	31	 
	 
	 	14.4	 	Interpretation	 	 	31	 
	 
	 	14.5	 	Notices	 	 	31	 
	 
	 	14.6	 	Waivers	 	 	32	 
	 
	 	14.7	 	Successors and Assigns	 	 	32	 
	 
	 	14.8	 	Publicity	 	 	33	 
	 
	 	14.9	 	Further Assurances	 	 	33	 
	 
	 	14.10	 	Severability	 	 	33	 
	 
	 	14.11	 	Entire Understanding	 	 	33	 
	 
	 	14.12	 	Applicable Law; Jurisdiction	 	 	33	 






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	 	14.13	 	Counterparts.	 	 	34	 
	 
	 	14.14	 	Passage of Title and Risk of Loss.	 	 	34	 






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SCHEDULES




	 	 	 
	Schedule 1.1
	 	Knowledge of the Seller
	Schedule 2.1(1)
	 	Equipment and Fixed Assets
	Schedule 2.1(2)
	 	Inventory
	Schedule 2.1 (3)
	 	Owned Real Property
	Schedule 2.1(5)
	 	Current Assets
	Schedule 2.2(1)
	 	Real Property Leases
	Schedule 2.2(2)
	 	Personal Property Leases
	Schedule 2.2(4)
	 	Hardware and Software
	Schedule 3.4
	 	Initial Purchase Price Allocation
	Schedule 4.22
	 	Necessary Assets
	Schedule 7.2(a)
	 	Real Estate Matters






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ASSET PURCHASE AND SALE AGREEMENT

BETWEEN

GOLDEN OVAL EGGS, LLC AND GOECA, LP AS BUYER

AND

MOARK AND AFFILIATES AS SELLER




PREAMBLE




     THIS ASSET PURCHASE AND SALE AGREEMENT is made as of the ___day of May, 2006, 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”) (Moark,
Cutler, Hi Point, L&W, Norco and MEC collectively will be referred to in this Agreement as
“Seller”), and Golden Oval Eggs, LLC, a Delaware limited liability company and GOECA, LP a
Delaware limited partnership jointly, severally, and collectively as “Buyer”. Each of the Sellers
and the Buyer is a “Party” and collectively all of the Sellers and the Buyer are the “Parties”.



RECITALS




     WHEREAS, Moark is, directly or indirectly through affiliates, in the business of production,
marketing, sale and distribution of shell eggs, and also is in the separate business of
manufacturing, marketing, selling and distributing liquid egg products. The liquid egg products
operations are owned directly by Moark and five of its wholly owned subsidiaries; Cutler, Hi Point,
L&W, Norco, and MEC. Cutler, Hi Point, and L&W each are engaged only in the business of
manufacturing, marketing, selling and distributing liquid egg products, and are not engaged in the
production, marketing, sale and distribution of shell eggs. Moark, Norco, and MEC are each engaged
in both shell egg operation and liquid egg operations.



     WHEREAS, the Buyer desires to purchase from the Seller and the Seller desires to sell to the
Buyer substantially all of the assets owned or leased by Seller and used in the conduct of the
business of its liquid egg operations (“Business”) and the Buyer is willing to assume certain
obligations of the Business, all upon the terms and conditions in this Agreement. Seller is not
selling to Buyer, and Buyer is not buying from Seller, assets associated with Cutler at
Philadelphia, LLC, or any assets other than those used in the Business, and expressly excluding any
assets associated with Seller’s shell egg operations, unless specifically provided herein.



     NOW, THEREFORE, in consideration of the foregoing which are contractual in nature and not mere
recital, and the mutual warranties, representations, covenants and agreements herein contained, the
parties hereby further agree as follows:



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ARTICLE 1

Definitions




     The defined terms in this Article 1 have the meanings set forth below for purposes of
this Agreement.



     “Accounts Receivable” shall mean the unpaid balance at the Effective Time of all monies due to
Seller for sales or products or services of the Business prior to the Effective Time.



     “Agreement” shall mean this Asset Purchase and Sale Agreement, including all exhibits and
schedules attached to this Agreement, which are incorporated as part of this Agreement, as it may
be amended, supplemented or modified from time to time by mutual agreement or in accordance with
terms of this Agreement.



     “Ancillary Agreements” shall mean those agreements set forth in Section 7.9.



     “Assigned Contracts” has the meaning set forth in Section 2.2.



     “Assumed Obligations” has the meaning set forth in Section 2.4.



     “Audited Financial Statements” has the meaning set forth in Section 5.9.



     “Books and Records” has the meaning set forth in Section 2.1(a)(4).



     “Business” means substantially all of the assets owned or leased by Seller and used in the
conduct of business of its liquid egg operations, other than the Excluded Assets.



     “Business Day” shall mean any day of the year other than (1) any Saturday or Sunday or (2) any
other day on which banks located in New York, New York are closed for business.



     “Business Financial Statements” shall mean those financial statements of the Business for the
years 2002, 2003, 2004 and 2005, copies of which have been provided by Seller to Buyer.



     “Buyer” has the meaning set forth in the Preamble of this Agreement.



     “Cash” as used in Section 2.3(1) shall mean all cash, certificates of deposit, bank accounts
and other cash equivalents, together with all accrued but unpaid interest on the certificates, bank
accounts and cash equivalents.



     “Closing” shall mean the consummation of the transactions contemplated in this Agreement in
accordance with Article 11.



     “Closing Date” shall mean the date on which the Closing takes place in Section 11.1.



     “COBRA” shall mean the Consolidated Omnibus Budget Reconciliation Act.



     “Code” shall mean the Internal Revenue Code of 1986, as amended, and the temporary and final
regulations promulgated under the Code.



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     “Confidentiality Agreement” has the meaning set forth in Section 7.5.



     “Contemplated Transactions” means the transactions contemplated in this Agreement.



     “Contract” shall mean any contract, lease, sublease, easement, license, sales order, purchase
order, supply agreement, assignment, or any other agreement, commitment or understanding whether
oral or written, other than Permits.



     “Contribution Assets” has the meaning set forth in Section 2.3(3).



     “Conveyance Documents” has the meaning set forth in Section 11.2(1).



     “Earnest Money Deposit” shall mean an amount equal to one million five hundred thousand
dollars ($1,500,000).



     “Earn-Out Payment” has the meaning set forth in Section 3.1(b)(1).



     “Earn-Out Payment Computation Date” has the meaning set forth in Section 3.3(b).



     “Effective
Time” shall mean 12:01 a.m., Central Daylight Time, on the July 1, 2006.



     “Employee Plan” shall mean any “employee benefit plan” within the meaning of Section 3(3) of
ERISA, all specified fringe benefits as defined in Section 6039D of the Code, and all other
retirement, savings, disability, salary continuation, medical, dental, health, life insurance,
death benefit, group insurance, post-retirement insurance, profit-sharing, deferred compensation,
stock option, cash option, educational assistance, bonus, incentive, vacation pay, severance,
retiree welfare plans, or other employee benefit or fringe benefit plan currently in effect as of
the date of this Agreement with respect to the Employees.



     “Employees” shall mean the employees of the Seller principally employed in the Business, a
list of whom has been provided by Seller to Buyer.



     “Environment” shall mean soil, land surface, or subsurface strata, surface waters,
groundwater, drinking water supply, stream sediments, ambient air (including indoor air), plant and
animal life and any other environmental medium or natural resource.



     “Environmental Law” shall mean any Law applicable to the Purchased Assets in respect of the
Environment, including without limitation federal, state or local law (including common law),
statute, code, ordinance, rule, regulation or other requirement relating to the pollution or
protection of the Environment, natural resources, or public or employee health and safety
applicable to the Business or the Purchased Assets, and includes without limitation the
Comprehensive Environmental Response, Compensation and Liability Act (“CERCLA”), 42 U.S.C. § 9601
et seq., the Hazardous Materials Transportation Act, 49 U.S.C. § 1801 et seq., the Resource
Conservation and Recovery Act (“RCRA”), 42 U.S.C. § 6901 et seq., the Clean Water Act, 33 U.S.C. §
1251 et seq., the Clean Air Act, 33 U.S.C. § 2601 et seq., the Toxic Substances Control Act, 15
U.S.C. § 2601 et seq., the Federal Insecticide, Fungicide, and Rodenticide Act, 7 U.S.C. § 136 et
seq., the Oil Pollution Act of 1990, 33 U.S.C. § 2701 et seq. and the Occupational Safety and
Health Act, 29 U.S.C. § 651 et seq., as those laws have been amended



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or supplemented, and the regulations promulgated pursuant to those laws, and all analogous
state or local statutes.




     “Equipment and Fixed Assets” has the meaning set forth in Section 2.1(a)(1).



     “ERISA” shall mean the Employee Retirement Income Security Act of 1974, as amended.



     “Excluded Assets” has the meaning set forth in Section 2.3.



     “Excluded Obligations” has the meaning set forth in Section 2.5.



     “Governmental Authority” shall mean the government of the United States, or any other foreign
country or any state, provincial or political subdivision of those entities and any entity, body or
authority exercising executive, legislative, judicial, regulatory or administrative functions of or
pertaining to government.



     “Hazardous Material” shall mean any waste, pollutant, contaminant, hazardous or toxic
substance or waste, special waste, or any constituent of any hazardous or toxic substance or waste
which is regulated by any Environmental Law due to its properties of being toxic, hazardous,
explosive, corrosive, flammable, infectious, radioactive, carcinogenic, or mutagenic, including,
without limitation, petroleum and petroleum products or byproducts, asbestos, asbestos-containing
materials, or presumed asbestos-containing materials, urea formaldehyde and polychlorinated
biphenyls.



     “Hired Employees” has the meaning set forth in Section 10.1.



     “Identified Employees” has the meaning set forth in Section 10.1.



     “Initial Purchase Price” has the meaning set forth in Section 3.2.



     “Initial Purchase Price Allocation” has the meaning set forth in Section 3.4.



     “Indemnification Basket” has the meaning set forth in Section 13.3(d).



     “Indemnification Cap” has the meaning set forth in Section 13.3(d).



     “Interim Financial Statements” has the meaning set forth in Section 5.9.



     “Knowledge” when used with respect to the Seller, shall mean the actual knowledge of any of
the Persons set forth on Schedule 1.1.



     “Law” shall mean any law, statute, code, regulation, ordinance, or rule enacted or promulgated
by any Governmental Authority.



     “Leased Real Property” shall mean the real property and interests in real property leased by
the Seller listed on Schedule 2.2(1).



     “Litigation” has the meaning set forth in Section 4.10.



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     “Material Adverse Effect” shall mean any event or circumstance that has a material and adverse
effect on the Purchased Assets or the Business, taken as a whole, other than events or
circumstances generally applicable to the egg industry or changes in general economic conditions.



     “Material Assigned Contracts” has the meaning set forth in Section 4.12.



     “Owned Real Property” shall mean the real property owned in fee by the Seller listed on
Schedule 2.1(3).



     “Party” has the meaning given in the Preamble.



     “Permits” shall mean permits, tariffs, authorizations, licenses, certificates, variances,
interim permits, approvals, franchises and rights under any Law or otherwise issued or required by
any Governmental Authority and any applications for the foregoing which are currently used by the
Seller to engage in the Business as currently conducted.



     “Permitted Encumbrance” shall mean any encumbrance related to the Owned Real Property or
Leased Real Property that is disclosed or otherwise reflected in the Title Commitment or the
survey(s) of the Owned Real Property or Leased Real Property prepared by Buyer according to Section
7.2, and that is accepted or waived by Buyer, all according to Section 7.2.



     “Personal Property Leases” has the meaning set forth in Section 2.2(2).



     “Post-Transfer Period” has the meaning set forth in Section 7.4(a).



     “Pre-Transfer Period” has the meaning set forth in Section 7.4(a).



     “Property Taxes” has the meaning set forth in Section 7.4(a).



     “Purchased Assets” has the meaning set forth in Section 2.2.



     “Real Property” shall mean the Owned Real Property and the Leased Real Property.



     “Real Property Leases” has the meaning set forth in Section 2.2(1).



     “Release” shall mean, with respect to the Purchased Assets, any release, spill, emission,
leaking, migration or leaching into the Environment.



     “Seller” has the meaning set forth in the Preamble to this Agreement.



     “Tax” (and, with correlative meanings, “Taxes” and “Taxable”) shall mean taxes, charges, fees,
duties (including customs duties), levies or other assessments, including income, gross receipts,
net proceeds, ad valorem, turnover, real and personal property (tangible and intangible), sales,
use, franchise, excise, value added, alternative, add-on minimum, stamp, leasing, lease, user,
transfer, fuel, excess profits, occupational, interest equalization, windfall profits, license,
payroll, environmental, capital stock, disability, severance, employee’s income



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withholding, other withholding, unemployment and Social Security taxes, which are imposed by
any Governmental Authority, and the term “Tax” shall include any interest, penalties, fines or
additions to Tax attributable thereto or associated therewith, and shall include any transferee or
successor liability in respect of Taxes (whether by contract or otherwise).




     “Tax Return” shall mean any report, return, statement, notice, form, declaration, claim for
refund or other document or information filed, submitted to, or required to be supplied to a
Governmental Authority in connection with the determination, assessment, collection or payment of
any Tax, including any schedule or attachment to or amendment of the Tax Return.



     “Title Commitment” has the meaning set forth in Section 7.2(a).



     “Title Evidence” has the meaning set forth in Section 7.2(b).



ARTICLE 2

Sale and Purchase of Purchased Assets;

Assumption of Assumed Obligations




     2.1 Purchased Assets.



     (a) Sale and Purchase. At the Effective Time, the Seller shall sell, assign, convey, transfer
and deliver to the Buyer, and the Buyer shall purchase, acquire and take assignment and delivery of
all of the right, title and interest in and to the assets described in clauses (1) to (8), other
than the Excluded Assets, free and clear of all encumbrances other than the Permitted Encumbrances:




     (1) Equipment and Fixed Assets. The tangible personal property, including the
buildings, structures, improvements, facilities, fixtures, machinery, equipment, fixed
assets, furniture, tools, automobiles, trucks, loaders and other vehicles, maintenance
equipment and materials and other tangible personal property and any replacements of
tangible personal property acquired prior to the Effective Time set forth on Schedule 2.1(1)
(collectively, the “Equipment and Fixed Assets”);




     (2) Inventory. All supplies, materials, work-in-progress, semi-finished goods,
finished goods, components, spare parts, and packaging materials described in Schedule
2.1(2) (collectively, the “Inventory”);




     (3) Owned Real Property. The Owned Real Property described in Schedule 2.1(3) together
with all appurtenant rights and easements to the Owned Real Property and all buildings,
structures, improvements, plants, facilities, and fixtures located on the Owned Real
Property;




     (4) Information and Records. To the extent legally transferable, all books and records
used, or intended to be used, in the operation of the Business or relating to the Identified
Employees (“Books and Records”) that are in the Seller’s care, custody or control,
including, without limitation, accounting records, employee records, customer
lists, vendor lists, and copies of all written Contracts and Permits, provided that
books and records used in the shell egg business shall be excluded or the shell egg
information



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excised if there is information relating to the Business or the Identified
Employees, and only copies of state and federal tax returns shall be transferred;




     (5) Certain Current Assets. The prepaid expenses, credits, and deposits related to the
Business and described in Schedule 2.1 (5) (the “Current Assets”);




     (6) Permits. All Permits and applications for Permits that are legally capable of
being transferred and which are utilized by Seller to own, lease and/or operate the
Purchased Assets or to conduct the Business as presently operated and conducted. Buyer
shall pay the transfer fees, if any, that are required to transfer any Permit (to the extent
it is transferable) to Buyer;




     (7) Intellectual Property. The patents and any patent applications, the trademarks and
trade names and applications for trademarks or tradenames, a list which has been provided to
Seller, and the trade secrets, know-how, formulae, technical processes and information used
in the Business as presently conducted; and,




     (8) Goodwill. All goodwill related to the Purchased Assets.



     (b) Purchased Assets. All of the assets described in this Section 2.1, together with the
Assigned Contracts described in Section 2.2, but excluding the Excluded Assets, are collectively
the “Purchased Assets.”



     (c) Assets Purchased and Transferred to GOECA, LP. The Purchased Assets to be transferred to
and held by GOECA, LP shall be designated by Buyer at the Closing.



     2.2 Assignment of Contracts.



     (a) Assumption. Subject to the terms and conditions of this Agreement at the Effective Time,
the Seller shall assign and transfer to the Buyer, all of its right, title and interest in and to,
and the Buyer shall assume all of the obligations of the Seller under the Contracts and unexpired
leases in clauses (1) to (4) (collectively, the “Assigned Contracts”);




     (1) Real Property Leases. All leases to or by the Seller of real property used in the
Business and listed on Schedule 2.2(1) (collectively, the “Real Property Leases”). (A
sublease with respect to the Norco Breaking Room is separately an Ancillary Agreement.) For
each Real Property Lease there shall be entered into an assignment of the lease to Buyer.




     (2) Personal Property Leases. All leases to or by the Seller of personal property used
in the Business including, but not limited to, those listed on Schedule 2.2(2)
(collectively, these leases are the “Personal Property Leases”);




     (3) Contracts. All other contracts, in any case which relate to the Business or the
Purchased Assets, to which the Seller is a party, including, but not limited to those
contracts set forth on the list previously provided to Buyer and the Material Assigned
Contracts; and,



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     (4) Hardware and Software. All leases and licenses relating to any licensed software
and leased computer and systems hardware used in the Business and listed on Schedule 2.2
(4).



     2.3 Excluded Assets. Seller shall retain and not sell, transfer or assign to Buyer, and Buyer
shall not purchase or acquire from Seller, any assets not described above as Purchased Assets,
including, but not limited to the following (“Excluded Assets”):




     (1) All Cash, and all Accounts Receivable;




     (2) Tax refunds;




     (3) Those assets related to the Business but which are subject to the Subscription
Agreement as referenced in Section 7.9 (the “Contribution Assets”);




     (4) Seller’s minute books and corporate type records;




     (5) The rights that accrue or will accrue to Seller under this Agreement, the Ancillary
Agreements, and all related documents; and




     (6) 2001 Receiving Storage and Delivery System for Liquid Egg and Oil Products
Manufactured by DSI.



     2.4 Assumed Obligations. Except to the extent and subject to Seller’s obligation to indemnify
pursuant to Article 13, at the Effective Time, the Buyer shall assume, and agree to discharge, the
following obligations, and only the following obligations, of the Business (the “Assumed
Obligations”):




     (1) Contract Obligations. The obligations of the Seller under the Assigned Contracts;
provided, however, that the Buyer shall not assume any obligation arising as a result of the
Seller’s breach of, or failure to pay in the ordinary course in accordance with, the terms
of any Assigned Contract prior to the Effective Time. Buyer shall pay the transfer fees, if
any, that are required to transfer any Assigned Contract to Buyer;




     (2) Identified Employees. The obligations with respect to Identified Employees but
only to the extent expressly provided pursuant to Section 5.8 and Article 10; and,




     (3) Environmental Law. Liabilities, obligations, and commitments of Seller relating to
any Environmental Law to the extent relating to the Purchased Assets or to the extent
arising out of Seller’s operation of the Business.



     2.5 Excluded Obligations.



     (a) No Assumption. The Buyer does not assume (or intend to assume) or agree to pay, perform,
fulfill or discharge any obligations not specifically assumed in Section 2.4, which shall remain
with Seller, including the following;



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     (1) Excluded Assets. The Buyer is not assuming any obligations of the Seller that
relate to the Excluded Assets;




     (2) Tax Liability. Except as provided in Section 7.4(b), the Buyer is not assuming any
Tax liability of any kind of the Seller, including any Tax liabilities arising, imposed or
assessed in respect of the Seller’s operation of the Business or its ownership of the
Purchased Assets for or applicable to periods ending on or before the Effective Time (such
as Taxes on or measured by income, sales and use Taxes, property Taxes, liabilities for
withheld federal and state income Taxes and employee or employer Federal Insurance
Contribution Act Taxes, or as a result of the Contemplated Transactions);




     (3) Employees. Except to the extent expressly provided in Section 5.8 and Article 10,
the Buyer is not assuming any obligations for personal, sick and vacation time accruals,
workers’ compensation accruals, any liability arising out of or relating to a Seller
employee grievance whether or not the employee is a Hired Employee, liabilities, and
obligations of Seller to any Employee under any health insurance plans prior to the
Effective Time, including COBRA obligations to any employees whom do not accept employment
with Buyer, variable compensation obligations for Hired Employees for, pension plan
obligations of Seller to Hired Employees, pre and post retirement welfare benefit
obligations of Seller to Hired Employees, severance, termination, or otherwise to any
employees (present or former), agents or independent contractors of the Seller;




     (4) Debt. The Buyer is not assuming any obligations of the Seller for any indebtedness
for borrowed money;




     (5) Warranties and Returns. The Buyer is not assuming any obligations or liabilities
with respect to product returns or product warranty claims relating to the operation of the
Business prior to the Effective Time;




     (6) Accounts Payable. The Buyer is not assuming any obligations of the Seller for any
accounts payable arising from the conduct of the Business prior to the Effective Time;




     (7) Fees and Expenses. The Buyer is not assuming any obligations of the Seller for
fees and expenses incurred in connection with the negotiation, execution, performance and
delivery of this Agreement and the Contemplated Transactions,
including, without limitation, the fees and expenses of counsel and investment bankers;
and,




     (8) Litigation. The Buyer is not assuming any obligations of the Seller for any of the
Litigation disclosed to Buyer pursuant to Section 4.10, below.



     (b) Excluded Obligations. The obligations referred to in Paragraph (a) clauses (1 though 8)
are the “Excluded Obligations.”



     2.6 Schedule Updates. To the extent Purchased Assets listed on any schedule referred to in
this Article 2 are sold, transferred, or otherwise disposed of or terminated in the ordinary course
of business prior to the Closing Date and in accordance with Section 6.2 and



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replaced with assets of equal value and used in the Business, the exchange of the replacement asset for the replacement
asset no longer owned by Seller shall be deemed to be added to the schedules without any action on
the part of the Seller, unless: the Asset has a value of $100,000 or more, or is owned real
property under Section 2.1(a)(3), Permits under Section 2.(a)(6), or Intellectual Property under
Section 2.1(a)(7).




ARTICLE 3

Purchase Price and Payment




     3.1 Purchase Price(a) Consideration. In consideration for the sale, assignment,
conveyance, transfer and delivery of the Purchased Assets to the Buyer, the Buyer shall assume the
Assumed Obligations and shall make payments to the Seller as provided in this Section 3.1, Section
3.2, and Section 3.3.



     (b) Earnest Money Deposit. Upon the execution of this Agreement, Buyer shall deposit with
Seller the Earnest Money Deposit. At the Closing, the Earnest Money Deposit shall be credited
against the Initial Purchase Price. If this transaction does not timely close due solely to a
breach of this Agreement by Buyer, and Seller has addressed those real estate issues noted on
Schedule 7.2(a) and has met conditions precedent and is ready to close the transaction, Seller
shall retain the Earnest Money Deposit. In the event this transaction terminates and does not
close due to any reason other than breach by Buyer, then Seller shall pay the Earnest Money Deposit
to Buyer within one Business Day of the termination.



     3.2 Initial Purchase Price.



     At the Closing, the Buyer shall cause to be paid to Seller, by wire transfer of immediately
available funds to accounts designated by Seller, the amount of fifty-five million dollars
($55,000,000), less the Earnest Money Deposit, plus or minus costs or prorations of amounts due
either party, including those in Sections 7.2 and 7.4 (the “Initial Purchase Price”).



     3.3 Earn-Out Payment.



     (a) Additional Payment. In addition to the Initial Purchase Price, another payment may be due
to Seller in accordance with the following earn-out provision in this Section 3.3.



     (b) General Computation. For every dollar of average annual earnings before interest, taxes,
depreciation and amortization (“EBITDA”) produced by Buyer over a two year period after the Closing
Date in excess of an annual average baseline amount of twenty-five million dollars
($25,000,000.00), Buyer shall pay to Seller an amount equal to three dollars and ten cents ($3.10).
This amount, if any, shall be the “Earn-Out Payment”. For purposes of this Earn-Out Payment,
EBITDA shall be defined to exclude non-recurring items that do not relate to the ongoing operation
of the business of the Buyer, including, but not limited to, consulting, attorney, and filing fees,
senior management bonuses and related expenses, as well as the income, associated with any public
offerings, subsequent transactions, or the Contemplated Transactions, and plant closing, moving and
restructuring expenses. Notwithstanding this exclusion for plant closing expenses, the parties
agree that the actual cash expenditures for employee severance associated with any plant closing
during the two year period after the



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Closing Date will be included as a reduction to EBITDA based
on a monthly charge assuming a three year amortization schedule from the date of such expenditure.
Other cash costs associated with expenditures related to such plant closures, such as equipment
relocation, shall not be included as part of such exception. For greater clarity, only the cash
expenditures incurred related to severance will be amortized and allowed to be included in EBITDA.
EBITDA shall further exclude EBITDA associated with the roll out of the Land O’ Lakes brand as
contemplated by the License Agreement referenced in Section 7.9. The computation of the Earn-Out
Payment shall be made initially by Buyer and in accordance with generally accepted accounting
principles, consistently applied.




     (c) Time Period for Measurement. The Earn-Out Payment shall be calculated utilizing the
earlier of the date which is 24 months after the Closing Date or the date upon which a public
offering of Buyer on a publicly traded market occurs. The date shall be the “Earn-Out Computation
Date”. If the date utilized is prior to the 24 months after the Closing Date, then the Earn-Out
Payment shall be calculated utilizing the actual annualized EBITDA amounts through the date which
are then annualized in connection with the contemplated public offering for the period of time
between the date of public offering and the date which is 24 months post Closing.



     (d) Cap. The Earn-Out Payment (exclusive of any interest which may be due) shall be subject
to a cap of eight million dollars ($8,000,000).



     (e) Time for Payment. Payment of the Earn-Out Payment, if any, shall be made by Buyer within
thirty days of the Earn-Out Computation Date or as otherwise set forth in Sections 3.3(f) or (g).
Payment shall be made by wire transfer of immediately available funds to accounts designated by
Seller.



     (f) Adherence to Plan. Provision of Records; Right to Audit. Buyer has prepared the Strategic
Business Plan (“Plan”) which has been provided to Seller for the conduct of its business
after-Closing. Buyer shall promptly notify Seller’s current parent organization, Land O’Lakes,
Inc. (“LOL”) of changes in the Strategic Plan adopted by Buyer, which shall remain
confidential to Buyer and shall not be disclosed to any third party other than LOL and its
advisors on a need-to-know basis. Any material deviation from the Plan in which Buyer engages in
business(es) other than those directly associated with egg production, egg processing, and/or
liquid egg product marketing prior to the Earn Out Payment Date, without LOL’s prior written
consent, shall cause the maximum Earn-Out Payment of eight million dollars to become then
immediately due and payable by Buyer to Seller. On or before the twentieth day of each month
after the Closing Date through the Earn-Out Computation Date, Buyer shall provide Seller with the
previous months’ internal financial reports after Closing to track EBITDA calculations. Within 45
days of the Earn-Out Computation Date, Buyer shall provide Seller with its calculation of the
Earn-Out Payment, and all supporting documentation. Buyer shall permit Seller and its
representatives reasonable access to its books and records to verify the calculation by Buyer of
the Earn-Out Payment. At its own expense, Seller shall have the right to conduct an audit to
verify the calculation of the Earn-Out Payment.



     (g) Disagreement as to Amount. The Seller shall have 30 days from the receipt of Buyer’s
calculation of the Earn-Out Payment to either accept Buyer’s calculation or submit a written
dispute notice to Buyer. The parties shall attempt to reconcile any differences, but if they



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are unable to reach agreement within 15 days of the receipt by Buyer of Seller’s notice of dispute,
then the parties shall submit the items remaining in dispute to a mutually acceptable independent
accounting firm. The firm’s calculation of the disputed items shall be binding on both parties,
and any amount owing shall be paid within one Business Day of receipt of the independent accounting
firm’s calculation. The fees of such independent accounting firm shall be shared equally between
Buyer and Seller. In the event the parties disagree as to the amount of the Earn-Out Payment, the
undisputed amount, if any, shall be paid as set forth in Section 3.2(e). Any other amount, whether
mutually agreed to by the parties or as otherwise determined, shall bear interest commencing with
the date that is 30 days after the Earn-Out Computation Date until paid in full at the variable
rate of Prime plus 300 basis points annual percentage rate compounded monthly. The applicable
Prime rate shall be as the same is published from time to time by Wells Fargo N.A. Any
interest due and owing shall not be subject to the Cap referenced in Section 3.3(d) above.




     3.4 Allocation of Initial Purchase Price. The Seller and the Buyer mutually agree to make
their respective allocations of the Initial Purchase Price in accordance with Section 1060 of the
Code and as set forth in Schedule 3.4 (“Purchase Price Allocation”). The Seller and the Buyer
shall each file IRS Form 8594 at the time and in the manner as required by Treasury Regulation
Section 1.1060-1 consistent with the Initial Purchase Price Allocation. The Seller and the Buyer
shall be bound by the Initial Purchase Price Allocation in preparing and filing their respective
tax returns and agree to allocate any adjustment to the purchase price as determined for federal
income tax purposes in a manner consistent with the Initial Purchase Price Allocation. The Seller
and the Buyer mutually agree to provide each other with the assistance as is reasonably necessary
for the other party to satisfy its reporting obligations under Section 1060 of the Code.



ARTICLE 4

Representations and Warranties of the Seller




     4.1 Purchased Assets Sold “As Is” Except as Warranted. EXCEPT AS OTHERWISE SPECIFICALLY
SET FORTH IN THIS AGREEMENT, THE PURCHASED ASSETS ARE BEING SOLD AND TRANSFERRED TO BUYER ON AN
“AS-IS, WHERE IS” BASIS WITHOUT ANY REPRESENTATIONS OR WARRANTIES, EXPRESS OR IMPLIED. Each of the
Sellers, jointly and severally, represents and warrants as of the date of this Agreement and as of
the date of the Closing and only with respect to the Business (and not as to any other operations,
such as Seller’s shell egg operations) and the Purchased Assets (and not as to any other assets),
as follows:



     4.2 Existence and Good Standing. Moark and Cutler are limited liability companies duly
organized, validly existing and in good standing under the laws of the State of Missouri. Hi Point
is a limited liability company duly organized, validly existing and in good standing under the laws
of the State of California. Norco, MEC, and L&W are corporations duly organized, validly existing
and in good standing under the laws of the States of California, Missouri and Ohio, respectively.
Each Seller has all requisite power and authority to own, lease and operate its applicable
Purchased Assets and to conduct its portion of the Business as it is presently conducted and is
duly qualified to transact business and is in good standing in each jurisdiction in which the
relevant Purchased Assets are owned, leased or operated by the Seller; and also is in



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good standing in each jurisdiction where the nature of the operation of the Business requires the Seller to
qualify to transact business, except where the failure to be qualified and in good standing would
not reasonably be expected to have a Material Adverse Effect.




     4.3 Due Authorization. Each Seller has all requisite power and authority to execute, deliver
and perform this Agreement and the Ancillary Agreements to which it is a party and to consummate
the Contemplated Transactions, subject to the terms and conditions contained in this Agreement.
The execution, delivery and performance by the Seller of this Agreement and the Ancillary
Agreements to which the Seller is a party and the consummation by the Seller of the Contemplated
Transactions have been duly and validly authorized by all necessary action on the part of each
Seller, and no other actions or proceedings on the part of any Seller is necessary to authorize the
execution, delivery and performance by each Seller of this Agreement and by the relevant Seller of
the Ancillary Agreements to which the Seller is a party or the Contemplated Transactions. Each
Seller has duly and validly executed and delivered this Agreement and has duly and validly executed
and delivered (or prior to or at the Closing shall duly and validly execute and deliver) the
Ancillary Agreements to which it is a party. Upon execution and delivery of this Agreement
(assuming due execution and delivery of this Agreement by all other Parties) together with the
Ancillary Agreements to which any Seller is a party, constitutes the legal, valid and binding
obligations of each Seller, enforceable against each Seller in accordance with their respective
terms, except as may be limited by: (1) applicable bankruptcy, insolvency, moratorium,
reorganization or similar laws in effect which affect creditors’ rights generally; or
(2) principles of equity including legal or equitable limitations on the availability of
specific remedies.



     4.4 Absence of Conflicts. Neither the execution and delivery of this Agreement nor any of the
Ancillary Agreements to which any Seller is a party nor the consummation of any of the Contemplated
Transactions will Materially violate, conflict with, or result in a Material breach of the terms,
conditions or provisions of: (1) the charter, by-laws or other organizational documents of any of
the Sellers; (2) any judgment, decree or order of any Governmental Authority to which any of the
Sellers is subject or by which any of the Sellers is bound; or (3) any requirements of Laws
applicable to any of the Sellers.



     4.5 Absence of Changes or Events. From August 1, 2002, through the date of this Agreement,
and except as previously disclosed to Buyer, the Business has been conducted by Seller in the
ordinary course of business with substantially consistent practices. Without limiting the
generality of the immediately preceding sentence, from August 1, 2002, through the date of this
Agreement, the Business has not, except as previously disclosed to Buyer in accordance with the
procedures provided for herein:




     (1) Suffered any damage or destruction that has resulted in the discontinuance of
operations or otherwise has resulted in a Material Adverse Effect; and/or,




     (2) Made any change in the method of accounting or accounting practice or policy.



     4.6 Business Financial Statements. The Business Financial Statements for the years 2002,
2003, 2004, and 2005, copies of which have been provided to Buyer, are true and correct,



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and are complete in all Material respects. These Business Financial Statements, which have been audited by
Moore Stephens Frost, PLC, present fairly, in all Material respects, the financial position,
results of operations and cash flows of the Business at the respective dates and for the respective
periods indicated and have been prepared in accordance with generally accepted accounting
principles applied on a consistent basis.




     4.7 Title to Assets.




     (a) Title to Purchased Assets. Except as previously disclosed to Buyer and other than
Owned Real Property and the Leased Real Property, which are addressed in Section 4.7(b), the
Seller has good, valid and marketable title to all of the Purchased Assets and valid
leasehold interests in, or other rights to use, all of the Purchased Assets, in each case,
free and clear of all encumbrances, subject only to the Permitted Encumbrances.




     (b) Title to Real Property. Schedules 2.1(3) and 2.2(1) set forth a complete list of
all Owned Real Property and a complete list of all interests in real property leased by
Seller and used in the Business (the “Leased Real Property”). Except as set forth in any
Title Commitment provided to Buyer and/or any surveys prepared by Buyer as provided in
Section 7.2(a), the Seller has, or at Closing will have: (1) good, valid and marketable fee
title to the Owned Real Property; and (2) valid leasehold interests in the Leased Real
Property, in each case, free and clear of all encumbrances, except for the Permitted
Encumbrances.



     4.8 Compliance with Laws; Permits.




     (a) No Notice of Noncompliance. Except as previously disclosed to Buyer, and since
August 1, 2002, the Seller has not received any notice from a Governmental Authority
alleging that it has failed to conduct the Business and maintain the Purchased Assets in
compliance with all applicable Laws and, to Seller’s Knowledge, the Business and Purchased
Assets are operating in material compliance with all Laws.




     (b) Permits. To Seller’s Knowledge, the Seller owns, holds, possesses or lawfully uses
in the operation of the Business all Permits which are necessary to conduct the Business as
currently conducted by the Seller or to own and use the Purchased Assets as currently used
in the Business and, except as previously disclosed to Buyer, is in material compliance with
all Permits. Except as previously disclosed to Buyer, the Seller has not received any
written notice of any claim of noncompliance with respect to any Permits. Seller has
previously provided a true, correct, and complete summary description and list of all
material Permits currently used in the Business.



     4.9 Taxes. Except as previously disclosed to Buyer, as of the date of Closing, Seller has
filed or caused to be filed, or properly extended the required filing date for, all Tax Returns
which are required to be filed by Seller on or prior to the Closing, and has paid all Taxes which
have become due pursuant to the Tax Returns or pursuant to any assessment which has become payable
on or prior to the Closing, except for any Taxes or assessments which are being contested in good
faith by appropriate proceedings.



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     4.10 Litigation. Except as previously disclosed to Buyer, there are no legal, administrative,
or arbitration proceedings, suits, or actions of any nature (“Litigation”) relating to the
Business, any Purchased Asset or the Contemplated Transactions pending, or, to the Knowledge of the
Seller, threatened against the Seller, by or before any Governmental Authority or by or on behalf
of any third party. Those matters previously disclosed to Buyer constitute a true, correct, and
complete list of all Litigation against the Seller relating to the Business, any Purchased Asset,
or the Contemplated Transactions.



     4.11 Inventory. The inventory of the Business including but not limited to any Purchased
Assets was acquired or produced and has been maintained in the ordinary course of business and is
of a quality that meets industry standards and the requirements of the purchasers of the inventory.



     4.12 Contracts. Other than purchase orders or service orders placed in the ordinary conduct
of business defined in Section 6.2, within the list of Material Assigned Contracts previously
disclosed to Buyer, is a complete list of Assigned Contracts that by any of their individual terms
can reasonably be expected to require future payment by or to Seller of $50,000 or more in the
aggregate, or which call for delivery or performance on a date more than one year from the date of
this Agreement and each are summarily identified in Schedule 2.2 to this Agreement as the “Material
Assigned Contracts”. Seller has made available, or will make available at least 20 days prior to
the Closing Date, to Buyer copies of all Material Assigned Contracts. Seller has received no
notice that any party to any of the Material Assigned Contracts intends to cancel or terminate the
agreements and to Seller’s Knowledge, there is no default or event that with notice and/or lapse of
time would constitute a material default by any party to any of the Material Assigned Contracts.



     4.13 Employee Matters.



     Seller has provided to Buyer a complete and correct list of all Employees, together with each
Employee’s name, position, location, salary or hourly rate and hire date and all accrued vacation,
sick leave, wages or other compensation in respect of each Employee.



     4.14 Environmental Matters. Except as previously disclosed to Buyer, with respect to the
Business and the Purchased Assets, and since August 1, 2000, the Seller has received no written
notices from any Governmental Authority that the Seller has not been in compliance with
Environmental Laws. Except as previously disclosed to Buyer, to the Knowledge of Seller, there has
been no unlawful Release of any Hazardous Material at or from the Purchased Assets or from the
operations of the Business. Except as previously disclosed to Buyer, to Seller’s Knowledge,
Seller, has not generated, treated, stored, handled, disposed, transferred, produced or processed
any Hazardous Material or any solid waste at the Purchased Assets or from the operations of the
Business, except in material compliance with all applicable Environmental Laws. Seller has
provided to Buyer copies of all written reports prepared by third party environmental consultants
in Seller’s possession pertaining to the Purchased Assets.



     4.15 Labor Matters. The Seller has not agreed to recognize any union or other collective
bargaining unit with respect to the Business, nor to Seller’s Knowledge has any union or other
collective bargaining unit been certified as representing any Employees. Except as



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previously disclosed to Buyer, for the past one year from the date of this Agreement, the Seller, with respect
to the Business: (1) has no, and has not had any, unfair labor practice charges or complaints
pending or, to the Knowledge of the Seller, threatened against it before the National Labor
Relations Board; (2) has no, and has not had any charges pending or, to the Knowledge of the
Seller, threatened against it before the Equal Employment Opportunity Commission or any state or local agency responsible
for the prevention of unlawful employment practices; (3) has no, and has not had any
investigations, charges or claims made or pending or, to the Knowledge of the Seller, threatened
against it by the Occupational Safety and Health Administration or any comparable state or local
agency; (4) has no, and has not had any labor strike, slowdown or work stoppage that occurred or
was threatened against it; and (5) has not had Knowledge of the occurrence of any union
organizational effort or representation petition with respect to any Employees.




     4.16 Major Customers; Major Suppliers. For the years ended 2003, 2004 and 2005, the identity
of the twenty largest customers (or 80%) of the Business based on the aggregate value of the
products purchased from Seller has been provided to Buyer. Except as disclosed to Buyer, no
customer has materially reduced or, the Seller’s Knowledge, intends to materially reduce purchases
of products from the Business. For the years ended 2003, 2004 and 2005, the identity of the twenty
largest suppliers (or 80% of supply costs) of raw materials or equipment of the Business. Except
as disclosed to Buyer, no supplier has materially reduced or to Seller’s Knowledge, will materially
reduce the amount of raw materials or equipment available for purchase by the Business.



     4.17 Intellectual Property. The Seller owns, or possesses legally enforceable rights to use
all of the Intellectual Property, free and clear of all encumbrances and subject to the
intellectual property Contracts which have been delivered to Buyer and identified as the
“Intellectual Property Contracts”. To Seller’s Knowledge, the Intellectual Property does not
infringe on the rights of any third parties.



     4.18 Books and Records. The Books and Records accurately and fairly reflect, in reasonable
detail, the transactions with respect to the Business. The Books and Records constitute all of the
customer lists and related records of Seller for the customers of the Business.



     4.19 Equipment and Fixed Assets. The Equipment and Fixed Assets are in general working order
in all Material respects, reasonable wear and tear and depreciation because of age excepted.



     4.20 Insurance. Seller has provided Buyer a list of the insurance policies and summarizes the
coverages that the Seller has in place with respect to the Purchased Assets. The insurance
policies are in amounts and types that are customary in the industry for similar assets, and all
the policies are in full force and effect.



     4.21 Misrepresentations and Omissions. No representation, warranty, covenant or statement by
the Seller in this Agreement, the Ancillary Agreements, the Schedules or the certificates or other
documents furnished or to be furnished to the Buyer pursuant to the Contemplated Transactions contains or will contain any
untrue statement of a Material fact, or



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omits or will omit to state a Material fact required or
necessary to be stated to make the statements contained in this Agreement, not false or Materially
misleading.




     4.22 Purchased Assets Necessary for Business. Seller represents and warrants that, except as
disclosed in Schedule 4.22, the Purchased Assets, the two license agreements referenced as
Ancillary Agreements, and the Contribution Assets represent all of the assets owned or controlled
by Seller that are necessary or convenient for the operation of the Business as presently
conducted, and, but for modifications, additions, deletions, substitutions and the like in the
ordinary course of business, represent all of the assets that produced the 2005 Business Financial
Statements.



ARTICLE 5

Representations And Warranties Of The Buyer




     5.1 Representations. The Buyer makes these representations and warranties as of the date
of this Agreement and as of the date of Closing.



     5.2 Existence and Good Standing. The Buyer is a limited liability company duly organized,
validly existing and in good standing under the laws of the State of Delaware. The Buyer has all
requisite power and authority to own, lease and operate its assets and to conduct its business and
is duly qualified to transact business and is in good standing in each jurisdiction in which its
assets are owned, leased or operated; and also is in good standing in each jurisdiction where the
nature of the operation of its business requires the Buyer to qualify to transact business, except
where the failure to be qualified and in good standing would not reasonably be expected to have a
material adverse effect on the Buyer’s business.



     5.3 Due Authorization. The Buyer has all requisite power and authority to execute, deliver
and perform this Agreement and the Ancillary Agreements to which it is a party and to consummate
the Contemplated Transactions, subject to the terms and conditions contained in this Agreement.
The execution, delivery and performance by the Buyer of this Agreement and the Ancillary Agreements
to which it is a party and the consummation by the Buyer of the Contemplated Transactions have been
duly and validly authorized by all necessary action on the part of the Buyer, and no other actions
or proceedings on the part of the Buyer is necessary to authorize the execution, delivery and
performance by the Buyer of this Agreement and by the Buyer of the Ancillary Agreements to which it
is a party or the Contemplated Transactions. The Buyer has duly and validly executed and delivered
this Agreement and has duly and validly executed and delivered (or prior to or at the Closing shall
duly and validly execute and deliver) the Ancillary Agreements to which it is a party. Upon the
execution and delivery of this Agreement (assuming
due execution and delivery of this Agreement by all other Parties) together with the Ancillary
Agreements to which the Buyer is a party, shall constitute, legal, valid and binding obligations of
the Buyer, enforceable against the Buyer in accordance with their respective terms, except as may
be limited by: (1) applicable bankruptcy, insolvency, moratorium, reorganization or similar laws
in effect which affect creditors’ rights generally; or (2) principles of equity including legal or
equitable limitations on the availability of specific remedies.



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     5.4 Absence of Conflicts. Neither the execution and delivery of this Agreement nor any of the
Ancillary Agreements to which the Buyer is a party nor the consummation of any of the Contemplated
Transactions will Materially violate, conflict with, or result in a Material breach of the terms,
conditions or provisions of: (1) the articles of organization, limited liability company
agreement, or other organizational documents of the Buyer; (2) any judgment, decree or order of any
Governmental Authority to which the Buyer is subject or by which the Buyer is bound; or (3) any
requirements of Laws applicable to the Buyer.



     5.5 Litigation. There is no litigation of any nature pending or asserted against the Buyer by
or before any Governmental Authority or by or on behalf of any Third Party which questions or
challenges the validity of this Agreement or any Ancillary Agreement or any of the Contemplated
Transactions or which, if adversely determined, would adversely affect the ability of the Buyer to
consummate the Contemplated Transactions.



     5.6 Financial Capability. The Buyer: (1) at the Closing, will have sufficient funds
available to pay the Initial Purchase Price and any expenses incurred by the Buyer in connection
with the Contemplated Transactions; (2) at the Closing, will have the resources and capabilities
(financial or otherwise) to perform its obligations under this Agreement, including the Assumed
Obligations; (3) at the due date, will have sufficient funds available to pay the Earn-Out Payment;
and (4) has not incurred, and will not voluntarily incur, any obligation, commitment, restriction
or liability of any kind, which would impair or adversely affect such funds, resources and
capabilities. The Buyer has obtained the commitment for financing as evidenced by the mandate
letter from Co-Bank (the “Commitment Letter”), which has been provided to Seller.



     5.7 Misrepresentations and Omissions. No representation, warranty, covenant or statement by
the Buyer in this Agreement, the Ancillary Agreements, the Schedules and the certificates to be
furnished to the Seller pursuant to this Agreement contains or will contain any untrue statement of
a Material fact, or omits or will omit to state a Material fact required or necessary to be stated
to make the statements contained in this Agreement not false or materially misleading.



     5.8 Hired Employees. Buyer represents to Seller that Buyer does not currently contemplate a facility closing or
layoff of, Hired Employees, or any terminations that in the aggregate would affect more than ten
percent (10%) of Hired Employees during the one (1) year period following the Closing. Subject to
any of the limitations set forth in Article 13, Buyer shall indemnify, defend and hold Seller
harmless from and against any and all reasonable loss, cost, damage, or expense, including
reasonable attorneys’ fees arising out of or connected to a breach by Seller of this representation
and warranty contained in this Section 5.8.



     5.9 Financial Statements. Buyer has previously delivered to Seller the “Audited Financial
Statements” of the Buyer and the “Interim Financial Statements” of the Buyer.



     The Audited Financial Statements present fairly, in all Material respects, the financial
position, results of operations and cash flows of Buyer at the respective dates and for the
respective periods indicated and have been prepared in accordance with generally accepted
accounting principles applied on a consistent basis throughout the periods involved. The Interim
Financial Statements present fairly, in all Material respects, the financial position and results
of



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operations of Buyer at the date and for the period indicated and have been prepared in
accordance with generally accepted accounting principles applied on a consistent basis with the
Audited Financial Statements, subject to normal year-end adjustments and except that the Interim
Financial Statements do not contain all footnote disclosures required by generally accepted
accounting principles.




ARTICLE 6



Covenants Of The Seller




     6.1 Covenant to Buyer. The Seller covenants with the Buyer to complete the actions in
this Article 6:



     6.2 Conduct of Business. Except as otherwise contemplated by this Agreement, and except as
otherwise consented to by the Buyer in writing, from the date of this Agreement until the Effective
Time, the Seller shall:




     (1) Conduct the Business in the usual and ordinary course consistent with Seller’s
current business practices;




     (2) Use commercially reasonable efforts, consistent with the Seller’s current business
practices, to preserve the goodwill of the Business and preserve Seller’s current
relationships with Employees, customers and suppliers of the Business;




     (3) Use, operate, repair, replace and maintain all Purchased Assets in a commercially
reasonable manner and consistent with the Seller’s current business practices;




     (4) Maintain in full force and effect all types of insurance described in Section 4.20
that provides coverage for the Purchased Assets; and,




     (5) Promptly notify the Buyer in writing of any significant incidents or accidents
involving the Business or the Purchased Assets.



     6.3 Disclosure Schedules; Notice of Developments. From and after the date of this Agreement
until Closing, Seller shall promptly notify Buyer by written update to the Disclosure Schedules of
any development causing a breach of any of the representations or warranties set forth in Article
4. Buyer shall have its remedies available to Buyer under this Agreement, which shall include
termination of this Agreement pursuant to Section 8.6 by reason of the development. The written
notice pursuant to this Section 6.3 shall be deemed to have amended the Disclosure Schedules, to
have qualified the representations and warranties contained in Article 4, and to have cured any
misrepresentation or breach of warranty that otherwise might have existed by reason of the
development.



ARTICLE 7



Covenants Of The Buyer And The Seller




     7.1 Access to Information, Inspections.


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     (a) Access to Seller. During the period from the date of this Agreement through the
Closing Date, upon the terms and conditions required by Seller (including any bio-security
protocols) and upon reasonable advance notice received from the Buyer, the Seller shall give
the Buyer and its authorized representatives reasonable access during regular business
hours, to all properties, offices, facilities, and Books and Records of the Seller relating
to the Business, the access to be exercised in a manner that does not unreasonably interfere
with the Seller’s operations or result in a breach of confidentiality under this Agreement.




     (b) Access to Information Post Closing. Buyer acknowledges that Seller may need access
to information relating to the Business acquired by Buyer after the Closing Date. Seller
acknowledges that Buyer must maintain biosecurity at the facilities and confidentiality of
the business operation information. Recognizing the concerns of Buyer and Seller, the
parties agree that upon reasonable request by Seller’s parent, Land O’Lakes, Inc., Buyer
shall, at and after the Closing, provide, at Land O’Lakes, Inc.’s cost, requested
information abut the Business reasonably necessary to determine any matter relating to or
arising during the period ending on or before the Closing Date. If Buyer cannot, or chooses
not to, provide the requested information, then upon request of Land O’Lakes, Inc., Buyer
shall grant Land O’Lakes, Inc. or its agents (providing the agents are not employed or
affiliated with a competitor of the Buyer and the agents are subject to confidentiality
restrictions in the same manner as Land O’Lakes, Inc.) access to the Books and Records of
the Business and, if necessary, the employees and properties of the Business on terms and
conditions reasonably established by Buyer to protect biosecurity, confidentiality, and in a
manner that does not unreasonably interfere with Buyer’s operations. Buyer shall notify
Land O’Lakes, Inc. of its record retention and destruction
policy. If Land O’Lakes, Inc. desires records that are scheduled to be destroyed, it
shall notify Buyer at least 30 days prior to the destruction date and Buyer shall provide
copies to Land O’Lakes, Inc. upon Land O’Lakes, Inc.’s agreeing to pay for the reasonable
duplication expenses; provided, however, Buyer agrees not to destroy any Books and Records
received from Seller hereunder during the one year period following the Closing Date.



     7.2 Title Evidence, Closing Fees and Proration of Utilities.




     (a) Title Commitment. As evidence of title to the Owned Real Property, and for
informational purposes as to the Leased Real Property, the Seller has caused to be prepared
and delivered to the Buyer at the Seller’s expense, a commitment or preliminary title report
for the applicable California properties (a “Title Commitment”) from First American Title
Company (the “Title Company”) together with copies of all exception documents, to issue to
the Buyer at Closing an owner’s title insurance policy (for Owned Real Property only),
subject to any easements and encroachments and other encumbrances disclosed by the Title
Commitments. Buyer also has obtained land surveys for the Owned Real Property and Lease
Real Property. Buyer, and Buyer’s lenders, have reviewed the status of the Owned Real
Property and the Lease Real Property and Buyer hereby accepts the condition of the Owned
Real Property and the Leased Real Property except that Seller agrees that it shall address,
on or before Closing,



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the items listed on Schedule 7.2(a), attached hereto, which has
separately been agreed to by Buyer and Seller.




     (b) Title Fees and Costs. All fees charged by the Title Company for the Title
Commitment shall be paid by Seller. The Buyer shall pay all costs to record the general
warranty deeds, including payment of any transfer tax, and the costs for the final title
policy and endorsements.




     (c) Utility Charges. All utility charges, including gas, oil, electricity, telephone,
sewer and water, pertaining to the Purchased Assets shall be prorated between Seller and
Buyer as of the Closing Date and settled outside of Closing; and accordingly, the portion of
any invoices for utility charges received following the Closing Date which have accrued up
to and including the Closing Date shall be for Seller’s account, and paid for or reimbursed
by Seller to Buyer with five (5) business days of receipt and written notice to Seller, and
any invoices for utility charges which accrue after the Closing Date shall be for Buyer’s
account.



     7.3 Motor Vehicles. The Seller shall take all actions and prepare all documents necessary to
effect the transfer to the Buyer of all motor vehicle registrations pertaining to automobiles,
trucks, and other motor vehicles of whatever kind used in the Business in compliance with the motor
vehicle registration and other applicable Laws of any jurisdictions where such motor vehicles are
registered. All transfer taxes related to the sale of motor vehicles in connection with the
consummation of the Contemplated Transactions shall be borne by the Buyer.



     7.4 Tax Matters.




     (a) Property Taxes. At the Closing, all state and local real and personal property
Taxes, tonnage taxes, ad valorem and similar Taxes and assessments (“Property Taxes”) which
are past due or have become due and payable in the normal course of business upon any of the
Purchased Assets on or before the Effective Time shall be paid by the Seller together with
any penalty or interest. All Property Taxes imposed by any Tax authority with respect to
the Purchased Assets that have been paid or are due and payable with respect to a Taxable
period beginning before the Effective Time and ending after the Effective Time (taking into
account whether the Property Taxes are payable in advance or in arrears) shall be
apportioned between: (1) the period beginning before and ending at the Effective Time (the
“Pre-Transfer Period”); and (2) the period beginning on the day immediately after the
Effective Time and ending on the last day of the relevant Taxable period (the “Post-Transfer
Period”). In performing the apportionment, all Property Taxes shall be prorated on the
assumption that an equal amount of Property Tax applies to each day of the relevant Taxable
period regardless of how installment payments are billed or made. The Seller shall be
liable for all Property Taxes apportioned to the Pre-Transfer Period. The Buyer shall be
liable for all the Property Taxes apportioned to the Post-Transfer Period.




     (b) Tax Payments at Closing. At the Closing, Buyer shall pay to Seller the amount of
any previously paid Property Taxes for which Buyer is liable under



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Section 7.4(a), net of
any payments due from Seller to Buyer. Upon request by Buyer (but not more than ten (10)
days prior to the due date for paying the Tax) Seller shall pay to the Buyer within three
(3) business days of the request the amount of any Property Taxes for which the Seller is
liable under Section 7.4(a). The Buyer shall pay to the appropriate Governmental Authority
all Property Taxes which become due and payable after the Effective Time with respect to a
Taxable period beginning before the Effective Time and ending after the Effective Time. To
the extent the Title Company handles the Closing as it relates to the Owned Real Property,
all Property Tax payments as noted in Section 7.4(a) shall be paid to the Title Company or
noted as debits and/or credits on the closing statement and the Title Company shall pay the
applicable Governmental Authority directly.




     (2) Foreign Person Certificate. At or before the Closing Date, Seller shall provide a
certificate to Buyer, in the form prescribed by Treasury Regulations under Section 1445 of
the Code, that Seller is not a foreign person within the meaning of Section 1445 of the Code
and the Treasury Regulations thereunder.



     7.5 Confidentiality. Buyer and Seller reaffirm that they are bound by terms and conditions of
that Confidentiality Agreement dated April 19, 2005, between Buyer and Moark, LLC, (the
“Confidentiality Agreement”), and in furtherance of the agreement, the Buyer and Seller shall keep
confidential all information obtained by it with respect to the other in connection with this
Agreement and the negotiations preceding this Agreement, the terms and conditions of this Agreement
and any Ancillary Agreement, and shall use the information solely in connection with
the Contemplated Transactions, and as otherwise contemplated by the Confidentiality Agreement.
If the Contemplated Transactions are not consummated, each Party shall return to the other upon
request, without retaining the information in electronic, paper or any other form, any schedules,
documents, or other written information obtained from the other in connection with this Agreement
and the Contemplated Transactions. Notwithstanding the foregoing, no Party shall be required to
keep confidential or return any information that: (1) is required to be disclosed by Law, pursuant
to an order or request of a judicial authority or Governmental Authority having competent
jurisdiction, or pursuant to the rules and regulations of any national stock exchange applicable to
the disclosing party (provided the party seeking to disclose the information provides the other
party with reasonable prior written notice); (2) is required to be disclosed by the Seller in
connection with obtaining the release of an encumbrance; or (3) can be shown to have been generally
available to the public other than as a result of a breach of this Section 7.5.



     7.6 Payments Received. After the Closing, the Seller and Buyer shall hold and promptly
transfer and deliver to the other, from time to time as and when received by them, any cash, checks
with appropriate endorsements (using their best efforts not to convert the checks into cash), or
other property that they may receive on or after the Closing which properly belongs to the other
party, including any insurance proceeds, and shall account to the other for all of the receipts.



     7.7 Satisfaction of Conditions. Without limiting the generality or effect of any provision of
Articles 8 and 9, prior to the Closing, each of the Parties shall use their respective commercially
reasonable efforts with due diligence and in good faith to satisfy promptly all


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conditions required
hereby to be satisfied by the Party in order to expedite the consummation of the Contemplated
Transactions.



     7.8 Accounts Receivable. The Accounts Receivable of the Business arising prior to the
Effective Time remain property of the Seller. Buyer hereby agrees to use commercially reasonable
efforts to collect Accounts Receivable excluded under Section 2.3(1) and to deliver to Seller or
its assignee, within three (3) Business Days after its receipt, any checks made payable to Seller
and all monies delivered to Buyer representing payment on any excluded accounts receivable. The
Buyer also agrees to cooperate with the Seller or its assignee in the Seller or its assignee’s
collection of any accounts receivable.



     7.9 Ancillary Agreements. The parties covenant to each other that, on the Closing Date and as
a condition to Closing for both Seller and Buyer, Seller and Buyer shall execute and deliver to
each other, or cause to be executed and delivered, the following agreements, (collectively, the
“Ancillary Agreements”):




     (1) Egg Supply Agreement pursuant to which Moark shall supply eggs to Buyer;




     (2) Transitional Services Agreement;




     (3) Subscription Agreement pursuant to which Seller shall contribute assets of the
Business valued at five million dollars ($5,000,000) to Golden Oval Eggs, LLC in exchange
for an agreed upon membership interest in Golden Oval Eggs, LLC;




     (4) Norco Breaking Room Sublease;




     (5) License Agreement between Land O’Lakes, Inc. and Buyer;




     (6) Subordinated Promissory Note between Land O’Lakes, Inc. and Buyer;




     (7) License Agreement re “Norco Ranch” and “McAnally”;




     (8) Shared Services Agreement;




     (9) Land O’Lakes Indemnification Guarantee Agreement; and




     (10) R & D Services Agreement.



     7.10 HSR Act. Each of Seller and Buyer shall file as of the date of execution hereof any
notification and report forms required for the Contemplated Transactions pursuant to the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the “HSR Act”), and will promptly
file or cause to be filed any supplemental information requested under the HSR Act. All filing
fees required to be paid by Buyer under the HSR Act will be paid by Buyer.



ARTICLE 8



Conditions Precedent To Obligations Of The Buyer




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     8.1 Conditions Precedent. The obligations of the Buyer to consummate the Contemplated
Transactions are subject to the satisfaction or waiver by the Buyer of the conditions precedent in
this Article 8 on or before the Closing Date or as otherwise required in this Agreement.



     8.2 Accuracy of Representations and Warranties. The representations and warranties of the
Seller contained in this Agreement and in any certificate or other writing delivered by the Seller
pursuant to this Agreement or the Ancillary Agreements shall be true, accurate and correct as of
the date of this Agreement and as of the Closing Date, as if made at and as of the date (unless any
representation or warranty refers specifically to a specified date, in which case the
representation or warranty shall be true, accurate and correct on and as of the specified date) in
all Material respects. The Buyer shall have received a certificate signed by an executive officer
of the Seller to the foregoing effect.



     8.3 Compliance with Agreements and Covenants.
The Seller shall have performed and complied in all respects with all of its covenants,
obligations and agreements contained in this Agreement to be performed and complied with by it on
or prior to the Closing Date or any other date specified in this Agreement in all material
respects.



     8.4 No Injunctions. There shall not be in effect any temporary restraining order, preliminary
injunction, injunction or other pending or threatened action by any third party or any order of any
court or Governmental Authority restraining or prohibiting the Closing of the Contemplated
Transactions.



     8.5 Intentionally Deleted.



     8.6 No Material Adverse Effect. There shall not have occurred any event, circumstance, change
or effect that has had, or could reasonably be expected to result in, a Material Adverse Effect to
the Business or on or to the Purchased Assets.



     8.7 Deliveries. The Seller shall have made, or be prepared to make at the Closing, all of the
deliveries set forth in Section 11.2.



     8.8 HSR Act. All filings required under the HSR Act shall have been made, and the waiting
period required thereby shall have expired or terminated.



ARTICLE 9



Conditions Precedent To Obligations Of The Seller




     9.1 Conditions Precedent. The obligations of the Seller to consummate the Contemplated
Transactions are subject to the satisfaction or waiver by the Seller of the following conditions
precedent in this Article 9 on or before the Closing Date or as otherwise required in this
Agreement.



     9.2 Accuracy of Representations and Warranties. The representations and warranties of the
Buyer contained in this Agreement and in any certificate or other writing delivered by the Buyer
pursuant to this Agreement or the Ancillary Agreements shall be true, accurate and correct as of
the date of this Agreement and as of the Closing Date, as if made at



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and as of the date (unless any
representation or warranty refers specifically to a specified date, in which case the
representation or warranty shall be true, accurate and correct on and as of the specified date) in all Material respects. The Seller
shall have received a certificate signed by an executive officer of the Buyer to the foregoing
effect.



     9.3 Compliance with Agreements and Covenants. The Buyer shall have performed and complied
with all of its covenants, obligations and agreements contained in this Agreement to be performed
and complied with by it on or prior to the Closing Date or any other date specified in this
Agreement in all Material respects.



     9.4 No Injunctions. There shall not be in effect any temporary restraining order,
preliminary injunction, injunction or other pending or threatened action by any Third Party or any
order of any court or Governmental Authority restraining or prohibiting the Closing of the
Contemplated Transactions.



     9.5 Deliveries. The Buyer shall have made, or be prepared to make at the Closing, all of the
deliveries set forth in Section 11.3.



     9.6 HSR Act. All filings required under the HSR Act shall have been made, and the waiting
period required shall have expired or terminated.



ARTICLE 10



Employees And Benefit Plans




     10.1 Offer of Employment. Seller shall cause all of the Employees to be terminated
effective at the Effective Time, subject to the Closing having occurred. Buyer shall offer
employment to all Employees identified by Buyer in writing to Seller as employees that will be
hired by Buyer at Closing (“Identified Employees”) at substantially similar salary or wage rates as
were in effect on the date of Closing and with a benefits package which is comparable to the
package currently maintained for employees of Buyer. Buyer shall offer to employ all Identified
Employees (hereinafter, all Identified Employees who accept Buyer’s offer of employment being
referred to as the “Hired Employees”) effective as of the Effective Time; provided, that in the
ease of Identified Employees who are on disability or leave of absence on the Closing Date, their
employment with Seller will not end and unless and until the Identified Employees are removed from
disability status employment with Buyer will not be offered unless and until they promptly advise
Buyer when they are released to return to work. Seller makes no representation as to whether
Employees will accept employment with Buyer. Seller shall be responsible for any employee benefit
obligations for Employees, including Hired Employees, accrued prior to the Effective Time or the
date the Employee is hired by Buyer. At Closing, Seller will transfer to Buyer funds equivalent to
the value of accrued vacation and/or sick time attributable to Hired Employees, and Buyer agrees to
credit each Hired Employee with the vacation and/or sick time
balances in accordance with Buyer’s employment policies, in addition to any benefits that may
accrue to the Hired Employees according to Buyer’s customary practice or policy. Buyer shall
comply with all applicable laws regarding non-discrimination in making decisions identifying or
affecting Identified Employees, including without limitation requirements for reasonable
accommodation of Identified Employees on disability leave. Subject to any of the limitations set
forth in Article 13, Buyer shall indemnify, defend and hold Seller harmless from and against any



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and all loss, costs, damage or expense, including reasonable attorneys’ fees, arising out of or
connected to a breach by Seller of this covenant contained in this Section 10.1.



     10.2 Recognition. Buyer shall consider for purposes of participation, eligibility and
vesting (but not necessarily for purposes of benefit accrual and compensation arrangements) under
its employee benefit plans (including vacation), the service of any Hired Employee with either
Seller or their respective affiliates prior to the Closing Date.



ARTICLE 11



Closing




     11.1 Closing. The Closing shall take place on or before June 30, 2006, at the offices of
Land O’Lakes, Inc. in Arden Hills, Minnesota, at or about 9:00 a.m. Central Standard Time. The
parties agree that time is of the essence. The date on which the Closing occurs is referred to in
this Agreement as the “Closing Date.” The Closing shall be effective as of the Effective Time.



     11.2 Deliveries by the Seller. At or prior to the Closing, the Seller shall deliver to the
Buyer the following, each dated the Closing Date and duly executed by the Seller:




     (1) Real and Personal Property. One or more assignment and assumption agreements,
general warranty deeds for each parcel of Owned Real Property, together with an updated
Title Commitment for each parcel of Owned Real Property, bills of sale and other conveyance
documents (collectively, the “Conveyance Documents”) with respect to tangible personal
property included in the Purchased Assets in forms acceptable to Buyer and Seller;




     (2) Possession of Assets. Possession of the Purchased Assets and the Real Property
Leases, the Personal Property Leases and all other Assigned Contracts listed in any
Schedule;




     (3) Vehicle Certificates. Certificates of title for all vehicles included in the
Purchased Assets, duly endorsed for transfer to the Buyer;




     (4) Transfer Instruments. Other instruments of transfer reasonably requested by the
Buyer to evidence the transfer of the Purchased Assets to the Buyer and consummation of the
Contemplated Transactions;




     (5) Conditions Precedent Certificate. A certificate, dated the Closing Date, of the
Seller certifying as to the compliance by the Seller with Sections 8.1 through 8.11;




     (6) Authorization Certificate. A certificate, dated the Closing Date, of the Seller
certifying that all necessary actions have been taken by each Seller to approve and
authorize this Agreement and the Ancillary Agreements to which each Seller is a party and
the consummation by each Seller of the Contemplated Transactions (together with an
incumbency and signature certificate regarding the officer or member signing on behalf of
the Seller);



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     (7) Foreign Person Certificate. A certificate, in the form prescribed by Treasury
regulations under Section 1445 of the Code, that the Seller is not a foreign Person within
the meaning of Section 1445 of the Code;




     (8) Certificate of Good Standing. Certificates of Good Standing for Seller in each
state where Owned Real Property is located;




     (9) Ancillary Agreements. The Ancillary Agreements, fully executed; and,




     (10) Other Documents. The other documents and instruments as may be reasonably
required to consummate the Contemplated Transactions.



     11.3 Deliveries by the Buyer. At the Closing, the Buyer shall make the payment described in
Section 3.2 and shall deliver to the Seller the following, each dated the Closing Date and duly
executed by the Buyer:




     (1) Assignment and Assumption Agreements. One or more Assignment and Assumption
Agreements under which the Assigned Contracts are assigned to Buyer and Buyer agrees to
comply with all of Seller’s obligations under the Assigned Contracts which become due and
dischargeable on or after the Closing Date, in forms acceptable to Buyer and Seller;




     (2) Conditions Precedent Certificate. A certificate, dated the Closing Date, of the
Buyer, certifying as to compliance by the Buyer with Sections 9.1 through 9.6;




     (3) Authorization Certificate. A certificate, dated the Closing Date, of the Buyer
certifying that all necessary actions have been taken by the Buyer to approve and authorize
this Agreement and the Ancillary Agreements to which the Buyer is a party and the
consummation by the Buyer of the Contemplated Transactions (together with an incumbency and
signature certificate regarding the officer(s), partners or members signing on behalf of the
Buyer);




     (4) Ancillary Agreements. The Ancillary Agreements, fully executed; and,




     (5) Other Documents. The other documents and instruments as may be reasonably required
to consummate the Contemplated Transactions.



ARTICLE 12



Termination




     12.1 Termination. This Agreement may be terminated at any time on or prior to the
Closing:




     (1) Mutual Agreement. By the mutual written agreement of the Seller and the Buyer;




     (2) Expiration Date. By the Seller or the Buyer if the Closing shall not have taken
place on or before July 31, 2006; provided, however, that the terminating party



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shall not
have failed to fulfill any obligation under this Agreement or be in breach of any
representation or warranty under this Agreement, which failure or breach was the cause of or
resulted in the failure of the Closing to occur on or before that date;




     (3) Government Order. By the Seller or the Buyer, if any court of competent
jurisdiction or other Governmental Authority shall have issued a final and non-appealable
order, decree or ruling or taken any other action permanently restraining, enjoining or
otherwise prohibiting the consummation of the Contemplated Transactions;




     (4) Breach. By the Seller or the Buyer, if prior to the Closing Date, the other party
is in default or breach in any material respect of any representation, warranty, covenant,
or agreement contained in this Agreement, and the default or breach is not cured within
twenty (20) Business Days after the date written notice of the breach is delivered by the
party claiming the default or breach to the party in default or breach; or




     (5) Material Adverse Effect. By the Buyer if an event or circumstance shall have
occurred since the date of this Agreement that has a Material Adverse Effect on the Business
or the Purchased Assets.



     12.2 Effect of Termination. If this Agreement is terminated pursuant to Section 12.1, all
obligations of the Parties under this Agreement shall terminate, except for the obligations set
forth in Sections 3.1(b) (Earnest Money Deposit), 7.5 (Confidentiality), 14.2 (Expenses), 14.8
(Publicity), and 14.12 (Applicable Law; Jurisdiction), which shall survive the termination of this
Agreement, and except that no termination shall relieve any Party from liability for any prior
breach of this Agreement.



     12.3 Remedy Upon Breach. In the event this Agreement is terminated by Seller pursuant to
Section 12.1(4) due to a breach by Buyer, Seller’s sole and exclusive remedy shall be to retain the
Earnest Money Deposit. In the event this Agreement is terminated by Buyer pursuant to Section
12.1(4) due to a breach by Seller, Buyer’s sole and exclusive remedy shall be its direct monetary
damages actually incurred, subject to an aggregate maximum sum of one million five hundred thousand
dollars.



ARTICLE 13



Indemnification




     13.1 Excluded Assets and Excluded Obligations. Without limitation as to time or dollar
amount, Seller shall indemnify and hold Buyer harmless from and against any loss, cost, expense or
other damage (including, without limitation, reasonable attorneys’ fees and expenses) resulting
from, arising out of, or incurred with respect to, or (in the case of claims asserted against Buyer
by a third party), alleged to result from or arise out of or have been incurred with respect to any
of the Excluded Assets (except the Contribution Assets, which are subject to the Membership
Interest and Contribution Agreement) or Excluded Obligations.



     13.2 Purchased Assets and Assumed Obligations. Without limitation as to time or dollar amount,
and except to the extent subject to Seller’s obligation to indemnify Buyer as set forth in Sections
13.1 and 13.3, Buyer shall indemnify and hold Seller harmless from and against



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any loss, cost,
expense or other damage (including, without limitation, reasonable attorneys’ fees and expenses)
resulting from, arising out of, or incurred with respect to, or (in the case of claims asserted
against Buyer by a third party), alleged to result from or arise out of or have been incurred with
respect to any of the Purchased Assets or any of the Assumed Obligations.



     13.3 Breach of Representations and Warranties.




     (a) Applicability. Except as provided in Section 12.3, the Parties agree as provided
in this Section as follows regarding indemnification of each other concerning claims,
actions, or proceedings arising from a breach of a representation and warranty under this
Agreement or in any certificate signed by a party and delivered to the other party in
connection with this Agreement.




     (b) Survival. The representations and warranties of Seller and Buyer contained in this
Agreement or contained in any certificate delivered pursuant to this Agreement shall survive
for three years following the Closing Date, except those representations of Seller set forth
in Section 4.14 “Environmental Matters” shall survive for five years following the Closing
Date, at which time they shall expire. No claim by either party regarding a breach of any
representation or warranty shall be made after the relevant date. Any claim asserted within
the period of survival as provided shall be deemed timely made for purposes hereof.




     (c) Indemnification. Subject to Sections 13.1, 13.2, 13.3(a) and 13.3(b), each Party
shall indemnify and hold the other party harmless from and against any loss, cost, expense
or other damage (including, without limitation, reasonable attorneys’ fees and expenses)
resulting from, arising out of, or incurred with respect to, or (in the case of claims
asserted by a third party), alleged to result from or arise out of or have been incurred
with respect to the falsity or the breach of any representation or warranty made by the
Party or in any Schedule or any certificate issued pursuant to this Agreement.




     (d) Limitation on Amount. Each party’s obligation to indemnify the other party
provided in Section 13.3(c) shall not exceed the aggregate maximum sum of six million
dollars ($6,000,000) (the “Indemnification Cap”), provided however, that neither party shall
be liable to the other Party for indemnification until the time as the aggregate damages
incurred by the Party seeking indemnification shall have exceeded three hundred eighty
thousand dollars (the “Indemnification Basket”). Each party shall only be obligated to
indemnify the other for amounts in excess of the Indemnification Basket, subject to the
Indemnification Cap, and with respect to environmental matters referenced in Section 4.14,
the Indemnification Cap shall be increased to twelve million dollars ($12,000,000) and there
shall be no applicable Indemnification Basket.



     13.4 Procedure.




     (a) Assertion. Within thirty (30) days after receipt of the written assertion of any
claim or the commencement of any action (“Assertion”) against any party who is or may be
entitled to indemnification under this Article 13, (the “Indemnified Party”), the
Indemnified Party shall notify the party from whom the indemnification may be sought



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(the “Indemnifying Party”) in writing of the Assertion. Failure to so notify the Indemnifying
Party shall relieve the Indemnifying Party of any liability under this Agreement.




     (b) Participation in Claim. The Indemnifying Party shall be entitled to participate in
and, to the extent the Indemnifying Party elects by written notice to the Indemnified Party
within thirty (30) days after receipt by the Indemnifying Party of notice of the Assertion,
to assume the defense of the Assertion, at the Indemnifying Party’s own expense, with
counsel chosen by the Indemnifying Party and satisfactory to the Indemnified Party.
Notwithstanding that the Indemnifying Party shall have elected by the written notice to
assume the defense of any Assertion, the Indemnified Party shall have the right to
participate in the investigation and defense, with separate counsel chosen by the
Indemnified Party, and the fees and expenses of the counsel shall be paid by the Indemnified
Party.




     (c) Settlement and Compromise. Notwithstanding anything to the contrary in this
Section, neither party shall: (1) settle or compromise any action or consent to the
entering of any judgment which does not include as an unconditional term thereof the
delivery by the claimant or plaintiff to such other party of a duly executed written release
of such party from all liability in respect of such party; or (2) settle or compromise any
action without the consent of the other party, which consent shall not be unreasonably
withheld. Failure to comply with the provisions of this Section 13.4(c) shall be construed
as a waiver of any right of indemnification related to the claim.




     (d) For Other Claims. A claim for indemnification for any matter not constituting a
Third Party Claim shall be asserted by written notice to the party from whom indemnification
is sought.



     13.5 Payment. Subject to the provisions of this Article 13, the Indemnifying Party shall
promptly pay and/or reimburse the indemnified party for any amounts due hereunder. In the event
Buyer is the Indemnified Party, Buyer shall seek full payment and/or reimbursement from the Sellers
as the Indemnifying Parties. If, after exhausting all commercially reasonable efforts to obtain
full payment for any indemnification amounts owed under this Agreement, Buyer is still owed some or
all of such indemnification amounts, Seller may seek recovery of such amount from MoArk LLC’s
parent entity, Land O’Lakes, Inc., pursuant to the terms of the Land O’Lakes Indemnification
Guarantee Agreement which is one of the Ancillary Agreements.



     13.6 Sole Remedy. With the exception of fraud, or unless another remedy is specifically
provided for elsewhere in this Agreement, Buyer and Seller each agree that the indemnification
obligations set forth in this Article 13 constitute the sole and exclusive remedy with respect to
any and all claims relating to the subject matter of this Agreement. In furtherance of the
foregoing, Seller and Buyer waive, to the fullest extent permitted under applicable law, all
rights, claims and causes of action Seller may have against Buyer and Buyer may have against Seller
under or based upon any federal, state, local or foreign statute, law, ordinance, rule, or
regulation or arising under or based upon common law or otherwise, except to the extent provided in
Section 13.3. Except as may be specifically otherwise provided in this Agreement, neither party
shall be liable to the other for incidental, special, punitive, exemplary or



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consequential damages
including, but not limited to, loss of profits or revenue, interference with business operations,
loss of lenders, buyers, diminution in value of the Purchased Assets, or inability to use the
Purchased Assets, in excess of the applicable Indemnification Cap.



     13.7 No Third Party Beneficiary Claims. This Article 13 regarding Indemnification is not
intended to create, and does not create, any third party beneficiary or similar rights in any third
party.



     13.8 Not Applicable to Fraud or Ancillary Agreements. Notwithstanding anything to the contrary
contained in this Agreement, the indemnification limitations set forth in this Article 13 shall not
apply to any instance of fraud or for any claims solely arising out of or connected solely with any
of the Ancillary Agreements.



ARTICLE 14



Miscellaneous




     14.1 Disclosure Schedules. The inclusion of any matter on any schedule shall not
constitute an admission by the Seller that the Matter is material or would reasonably be expected
to have a Material Adverse Effect unless the Schedule is given in response to a provision
identifying Materiality to be disclosed.



     14.2 Expenses. Except as otherwise provided in this Agreement, each Party shall bear its own expenses with
respect to the Contemplated Transactions.



     14.3 Amendment. This Agreement may be amended, modified or supplemented only by a writing
signed by the Buyer and the Seller.



     14.4 Interpretation. The headings preceding the text of articles and sections included in this
Agreement and the headings to schedules and exhibits attached to this Agreement are for convenience
only and shall not be deemed part of this Agreement or be given any effect in interpreting this
Agreement. The terms as set forth in this Agreement have been arrived at after mutual negotiation
with the advice of counsel and, therefore, it is the intention of the parties that its terms may
not be construed against any of the parties by reason of the fact that it was prepared by one of
the parties.



     14.5 Notices. Any notice, request, instruction or other document to be given under this
Agreement by a Party shall be in writing and shall be deemed to have been given: (1) when received
if given in person or by courier or a courier service; (2) on the date of transmission if sent by
telex, facsimile or other electronic transmission (receipt confirmed); or (3) five (5) Business
Days after being deposited in the mail, certified or registered, postage prepaid.



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If to the Seller, addressed as follows:



Moark, LLC.

Attention: 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, MN 55164-0101

Attention: John Curran



If to the Buyer, addressed as follows:



Golden Oval Eggs, LLC

1800 Park Avenue East

P.O. Box 615

Renville, MN 56284

Attention: Dana Persson



With a copy to:



Mark Hanson

Lindquist & Vennum PLLP

4200 IDS Center

80 South Eighth Street

Minneapolis, MN 55402-2274



or to such other individual or address or facsimile number as a Party may designate for itself by
notice given under this Section.




     14.6 Waivers. The failure of a Party at any time or times to require performance of any
provision shall in no manner affect its right at a later time to enforce the same. No waiver by a
party of any condition or of any breach of any term, covenant, representation or warranty contained
in this Agreement shall be effective unless in writing, and no waiver in any one or more instances
shall be deemed to be a further or continuing waiver of any condition or breach in other instances
or a waiver of any other condition or breach of any other term, covenant, representation or
warranty.



     14.7 Successors and Assigns. This Agreement shall be binding upon and shall inure to the
benefit of the parties and their respective permitted successors and assigns, provided, however,
that neither this Agreement, nor any Ancillary Agreements (except as may be expressly provided
otherwise in any Ancillary Agreement) nor any right or obligation under this



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Agreement may be
assigned by any Party without the prior written consent of the other Party; provided, further, that
no assignment shall relieve a party from its obligations under this Agreement or any Ancillary
Agreement.



     14.8 Publicity. No public announcement or other publicity regarding the transactions referred
to in this Agreement shall be made by the Buyer or the Seller or any of their respective officers,
directors, employees, representatives or agents, without the prior written agreement of the Seller
and the Buyer, respectively, unless the announcement or disclosure is required by any Governmental
Authority or Applicable Law, and even then advance notice shall be given to the other Party. Any
announcement shall be agreed to by the Parties as to form, content, timing and manner of
distribution or publication. Nothing in this Section 14.8 shall prevent the Parties from
discussing the transactions with those persons whose consent, approval, agreement or opinion, as
the case may be, is required for consummation of the transactions. The Parties shall exercise all
reasonable efforts to assure that such persons keep confidential any information relating to this
Agreement or any agreement, document or instrument contemplated in this Agreement.



     14.9 Further Assurances. The Seller and the Buyer agree to cooperate fully with each other in connection with obtaining
the satisfaction of the conditions set forth in Articles 8 and 9. The Seller and the Buyer agree
to execute and deliver other documents, certificates, agreements and other writings and to take
other actions as may be reasonable, necessary or desirable in order to consummate or implement
expeditiously the Contemplated Transactions and any agreement, document or instrument contemplated
in this Agreement.



     14.10 Severability. If any provision of this Agreement is held invalid, illegal or
unenforceable, the validity, legality or enforceability of the other provisions of this Agreement
shall not be affected, and there shall be deemed substituted for the provision at issue a valid,
legal and enforceable provision as similar as possible to the provision at issue.



     14.11 Entire Understanding. This Agreement, the Confidentiality Agreement, and the Ancillary
Agreements set forth the entire agreement and understanding of the Parties with respect to the
Contemplated Transactions and supersede any and all prior agreements, arrangements and
understandings among the Parties relating to the subject matter.



     14.12 Applicable Law; Jurisdiction. This Agreement shall be governed by and construed and
enforced in accordance with the internal laws of the State of Minnesota without giving effect to
the principles of conflicts of law. Any suit, action or proceeding between the parties hereto
relating to this Agreement or to any agreement, document or instrument delivered pursuant hereto or
in connection with the transactions contemplated hereby or in any other manner arising out of or
relating to the transactions contemplated by or referenced in this Agreement (except for the
Ancillary Agreements,, which shall contain their own provision), shall be commenced and maintained
exclusively in courts having sites within the City of Minneapolis, State of Minnesota. The parties
hereto submit themselves unconditionally and irrevocably to the personal jurisdiction of such
courts, as applicable. The parties hereto irrevocably waive any objection to such personal
jurisdiction or venue, including, but not limited to, the objection that any suit, action or
proceeding has been brought in an inconvenient forum.



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     14.13 Counterparts. This Agreement may be executed in counterparts, each of which shall be
deemed an original, but all of which together shall constitute one and the same original
instrument.



     14.14 Passage of Title and Risk of Loss. Legal title, equitable title, and risk of loss in
respect of the Purchased Assets will not pass to the Buyer until such Purchased Assets are
transferred at the Closing, which transfer, once it has occurred, will be deemed effective for tax,
accounting, insurance and other computational purposes as of the Effective Time.



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     IN WITNESS WHEREOF, the parties hereto have executed and delivered this Asset Purchase and
Sale Agreement as of the date first above written.



	 	 	 	 	 	 	 	 	 
	GOLDEN OVAL EGG, LLC	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	By:

	 	/s/ Chris R. Edgington	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	Print Name: Chris R. Edgington	 	 	 	 	 	 
	Title: Chair, Board of Managers	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	GOLDEN OVAL EGG, LLC	 	GOECA, LP	 	 
	 
	 	 	 	 	 	 	 	 
	By:

	 	/s/ Dana Persson
	 	By:
	 	/s/ Dana Persson	 	 
	 

	 	 
	 	 	 	 	 	 
	Print Name: Dana Persson	 	Print Name: Dana Persson	 	 
	Title: Chief Executive Officer	 	Title: CEO of General Partner, GOECMA, Inc.	 	 
	 
	 	 	 	 	 	 	 	 
	MOARK, LLC	 	CUTLER AT ABBEVILLE, L.L.C.	 	 
	 
	 	 	 	 	 	 	 	 
	By:

	 	/s/ Craig Willardson
	 	By:
	 	/s/ Craig Willardson	 	 
	 

	 	 
	 	 	 	 	 	 
	Print Name: Craig Willardson	 	Print Name: Craig Willardson	 	 
	Title: President	 	Title: President	 	 
	 
	 	 	 	 	 	 	 	 
	HI POINT INDUSTRIES, LLC	 	L & W EGG PRODUCTS, INC	 	 
	 
	 	 	 	 	 	 	 	 
	By:

	 	/s/ Craig Willardson
	 	By:
	 	/s/ Craig Willardson	 	 
	 

	 	 
	 	 	 	 	 	 
	Print Name: Craig Willardson	 	Print Name: Craig Willardson	 	 
	Title: President	 	Title: President	 	 
	 
	 	 	 	 	 	 	 	 
	MOARK EGG CORPORATION	 	NORCO RANCH, INC.	 	 
	 
	 	 	 	 	 	 	 	 
	By:

	 	/s/ Craig Willardson
	 	By:
	 	/s/ Craig Willardson	 	 
	 

	 	 
	 	 	 	 	 	 
	Print Name: Craig Willardson	 	Print Name: Craig Willardson	 	 
	Title: President	 	Title: President	 	 







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