EXHIBIT 10.1
AMENDMENT TO ASSET PURCHASE
AGREEMENT
This Amendment to
Asset Purchase Agreement (the “ Amendment ”) is
entered into as of February 15, 2008 by and among Moark, LLC,
a Missouri limited liability company (“ Moark
”), Cutler at Abbeville, L.L.C., a Missouri limited liability
company (“ Cutler ”), Hi Point Industries, LLC,
a California limited liability company (“ Hi Point
”), L & W Egg Products, Inc., an Ohio
corporation (“ L&W ”), Norco
Ranch, Inc., a California corporation (“ Norco
”), and Moark Egg Corporation, a Missouri corporation
(“ MEC ” and collectively, the “ Seller
Parties ”), Land O’Lakes, Inc., a Minnesota
cooperative corporation (“ LOL ”), and Golden
Oval Eggs, LLC, a Delaware limited liability company (“
Golden Oval ”), and GOECA, LP, a Delaware limited
partnership (“ GOECA ” and together with Golden
Oval, the “ Buyer Parties ”). The Seller
Parties, LOL and the Buyer Parties may be referred to herein as the
“ Parties .”
A.
The Seller Parties, as Sellers, and the Buyer Parties, as Buyers,
entered into that certain Asset Purchase and Sale Agreement dated
as of May 23, 2006 (the “ Asset Purchase
Agreement ”). Under the Asset Purchase Agreement,
the Buyer Parties were obligated to pay, among other consideration,
the Earn-Out Payment.
B.
Pursuant to the terms of the Asset Purchase Agreement, LOL and the
Buyer Parties entered into that certain Subordinate Promissory Note
dated as of June 30, 2006 (the “ Note
”). The Note provided that the Buyer Parties were
obligated to pay to LOL the principal sum of Seventeen Million
Dollars ($17,000,000.00), together with interest thereon, in
installments commencing on June 30, 2008 (the “
Initial Payment ”) and an ultimate maturity date
of June 30, 2009 (the “ Maturity Date
”). The Note, together with the Warrant to Subscribe
for and Purchase Units of Golden Oval (the “ 2006
Warrant ”) issued to LOL, further provided that if the
Note was not repaid by the Maturity Date, LOL had the option to
exercise the right to purchase up to ten percent (10%) of the
equity interest in Golden Oval at the price of $.01 per Unit (as
defined in the 2006 Warrant). The Note was secured by certain
property owned by Golden Oval, GOECA and Midwest Investors of Iowa,
Cooperative, an Iowa corporation (“ Midwest ”)
pursuant to that certain Security Agreement by and among LOL, as
secured party, and Golden Oval, GOECA and Midwest, as grantors,
dated as of June 30, 2006 (the “ Security
Agreement ”).
C.
In connection with the transaction contemplated by the Asset
Purchase Agreement, Norco and GOECA entered into that certain
Sublease of Norco Breaking Room dated as of July 1, 2006
(the “ Sublease ”), pursuant to which Norco
sublet to GOECA certain real property, together with certain
buildings and other improvements.
D.
In connection with the transaction contemplated by the Asset
Purchase Agreement and pursuant to the Subscription Agreement for
Class B Units in Exchange for Contribution of Assets by and
among Moark, Cutler, Hi Point and MEC, as subscribers (the “
Subscribers ”), and Golden Oval, as seller, the
Subscribers purchased and assigned to LOL 697,350 shares of Golden
Oval’s Class B Units (the “ Class B
Units ”).
E.
The Buyer Parties, on the one hand, and the Seller Parties and LOL,
on the other hand, have alleged various claims against each other
arising under the Asset Purchase Agreement, the Ancillary
Agreements and related obligations.
F.
The Buyer Parties have indicated to LOL that in order to maximize
the value of their business they are actively seeking to refinance
their existing senior secured indebtedness and that such
refinancing requires the accommodations made by LOL pursuant to
this Amendment.
G.
LOL has recognized the need, and is willing, subject to the terms
and conditions of this Amendment, to enter into certain financial
accommodations in order for the Buyer Parties to maximize their
going concern value.
H.
Capitalized terms not defined herein shall have the meanings set
forth in the Asset Purchase Agreement.
NOW THEREFORE, in
consideration of the foregoing and other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, the Parties, intending to be legally bound, hereby
consent and agree as follows:
1.
Definitions .
“Affiliate” shall mean, with
respect to any person or entity, the predecessors, successors, and
assigns of such Person, and any partner, principal, subsidiary,
parent, holding company, division, shareholder, affiliate, officer,
director, employee, agent, or attorney of such Person, in each case
in such capacity, and the predecessors, successors, and assigns of
each of the foregoing.
“Business Day” shall mean any day
other than a Saturday, Sunday, or any other day on which commercial
banks in the State of Minnesota are required or authorized to close
by law or executive order.
“Cause of
Action” shall mean all actions, claims, causes
of action, liabilities, obligations, rights, suits, damages,
judgments, remedies, demands, setoffs, defenses, recoupments,
crossclaims, counterclaims, third-party claims, indemnity claims,
contribution claims or any other claims whatsoever, whether known
or unknown, matured or unmatured, fixed or contingent, liquidated
or unliquidated, disputed or undisputed, suspected or unsuspected,
foreseen or unforeseen, direct or indirect, choate or inchoate,
existing or hereafter arising, in law, equity or otherwise, based
in whole or in part upon any act or omission or other event.
“Parties” shall have the meaning
set forth in the recitals to this Amendment.
“Refinancing Effective Date” shall
mean the date on which the Buyer Parties consummate the refinancing
of their existing senior secured indebtedness.
2.
Purchase Price Reduction . The purchase price as set
forth in the Asset Purchase Agreement shall be reduced by seventeen
million dollars ($17,000,000.00) plus a sum equal to the Earn Out
Payment (the “ Purchase Price Reduction
”). The Purchase Price Reduction shall be accomplished
at such time by (i) cancellation of the principal amount owed
under the Note (including cancellation of the Security Agreement)
and (ii) cancellation of the Buyer Parties’ obligations
with respect to the Earn Out Payment. In connection with the
Purchase Price
2
Reduction (and the issuance of the 2008
Warrant), LOL shall return the original Note to Buyer Parties
marked “cancelled” and shall take such actions as are
reasonably necessary to release the Security Interest (as that term
is defined in the Security Agreement). LOL shall also
surrender the 2006 Warrant for cancellation by Golden
Oval.
3.
Warrants . In consideration of the agreement by LOL to
release the Buyer Parties from their obligation to pay all interest
accrued on the Note (an amount equal to $3,241,643.77 as of the
date hereof), Golden Oval shall grant to LOL the right to acquire
membership units in Golden Oval on the conditions and at the price
set forth in the warrants attached hereto as Exhibit B
(the “ 2008 Warrant ”).
4.
Sublease Modification . The Sublease hereby is amended
pursuant to the terms of the First Amendment to Sublease, attached
hereto as Exhibit C (the “ First Sublease
Amendment ”).
5.
Indemnification . Article 13 of the Asset
Purchase Agreement is deleted in its entirety.
6.
[ RESERVED. ]
7.
Conversion of Class B Units . The
Class B Units will be converted into an equal number of
Class A Common Units of Golden Oval and all rights held (or
deemed held) by LOL in connection with its ownership of the
Class B Units will terminate upon such conversion.
8.
Releases .
(a)
Release of Seller Parties and LOL . Each of the Buyer
Parties, on behalf of itself and each of its Affiliates, hereby
release and discharge, absolutely, completely, unconditionally,
irrevocably and forever, each of the Seller Parties and LOL from
any and all Causes of Action accruing prior to the date hereof,
including, but not limited to, those arising under the Shell Egg
Supply Agreement and the Asset Purchase Agreement and documents
related thereto, including but not limited to the Ancillary
Agreements, as each may have been amended; provided, however
, that the foregoing release shall not apply to (i) the
obligations of LOL or any of the Seller Parties pursuant to this
Amendment, the 2008 Warrant or
the First Sublease Modification or (ii) any obligation of LOL
or any of the Seller Parties under any Ancillary Agreement arising
on or after the date hereof. E ach Buyer Party shall
be deemed to have granted such release notwithstanding that it may
hereafter discover facts in addition to, or different from, those
which it now knows or believes to be true, and without regard to
the subsequent discovery or existence of such different or
additional facts, and such Buyer Party expressly waives any and all
rights that it may have under any statute or common law principle,
including Section 1542 of the California Civil Code, which
would limit the effect of such releases to thos
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