Exhibit 10.3
EXTE NSION
AGREEMENT
This EXTENSION AGREEMENT
(“Extension Agreement”), effective as of December 13,
2007, is by and between GOLDEN OVAL EGGS, LLC, a limited liability
company organized under the laws of the State of Delaware, GOECA,
LP, a Delaware limited partnership, and MIDWEST INVESTORS OF IOWA,
COOPERATIVE, a cooperative organized under the laws of the State of
Iowa (individually each a “ Borrower ”
and collectively the “ Borrowers ”) the banks
and other financial institutions or entities which are signatories
hereto (individually each a “ Lender ” and
collectively the “ Lenders ”), and COBANK, ACB,
a federally charted instrumentality under the Farm Credit Act of
1971, as amended, one of the Lenders and as agent for the Lenders
(in such capacity, the “ Administrative Agent
’’).
RECITALS
1.
The Lenders and the Borrowers entered into an Amended and Restated
Credit Agreement dated as of June 30, 2006 (the “Credit
Agreement”); and
2.
The Lenders and the Borrowers entered into a First Amendment to the
Amended and Restated Credit Agreement dated as of April 30,
2007 (the “First Amendment”), and entered into a Second
Amendment to the Amended and Restated Credit Agreement dated as of
October 19, 2007 (the “Second Amendment); the Credit
Agreement as amended by the First Amendment and Second Amendment
all together may be referred to as the “Amended Credit
Agreement”; and
3.
The Borrowers are working diligently with ING Capital LLC
(“ING”) to obtain sufficient financing to repay all
existing debt arising from or related to the Amended Credit
Agreement, and have asked for certain accommodations from the
Lenders in this regard. The Lenders are willing, upon the terms and
conditions set forth herein, to extend various reporting and
payment due dates set forth under the Amended Credit Agreement.
AGREEMENT
NOW, THEREFORE, for
good and valuable consideration, the receipt and adequacy of which
are hereby acknowledged, the parties hereto hereby covenant end
agree to be bound as follows:
Section 1.
Capitalized Terms . Capitalized terms used
herein and not otherwise defined herein shall have the meanings
assigned to them in the Amended Credit Agreement, unless the
context shall otherwise require.
Section 2.
Impact of Extension on Borrowers’ Obligations
. Unless specifically
provided for otherwise in this Extension Agreement, this Extension
Agreement does not replace
1
or supplant the Amended
Credit Agreement. Borrowers shall fully perform their obligations
under the Amended Credit Agreement unless specifically modified
herein.
Section 3.
Preconditions to Extensions . The Lenders’
obligation to extend various performance dates under the Amended
Credit Agreement shall be subject to the following conditions, all
of which shall be considered preconditions and continuing until all
matters have been completed:
A.
Execution of this Extension Agreement by Borrowers. This
Extension Agreement shall not be effective until and unless it has
been fully and properly executed by all parties hereto in multiple
originals, electronic copies of which must be furnished to the
Lenders on or before Thursday, December 13, 2007.
B.
Receipt of Binding Commitment Letter by December 14, 2007.
On or before December 14, 2007 , Borrowers must have
received, and transmitted to Lenders, a binding commitment from ING
(the “Commitment”) on substantially the same terms and
conditions as set forth in the ING term sheet dated October 8,
2007, provided to Lenders on or about November 21, 2007, and
attached hereto as Exhibit A. The terms of the ING transaction
must include the repayment in full of all obligations to Lenders
arising from or related to the Amended Credit Agreement, with said
repayment occurring on or before February 29, 2008.
C.
Compliance with Amended Credit Agreement. Borrowers must be in
compliance with all terms and conditions of the Amended Credit
Agreement, except to the extent such performance has been
specifically excused or modified in this Extension Agreement.
D.
Payment of Extension Fee. Upon execution of this Agreement,
Borrowers shall pay to Lenders an extension fee of $21,280.
Section 4. Termination
Date Extension – Short Term Revolving
Note . The Termination Date as it applies to the Short Term
Revolving Note shall be extended to March 1,
2008.
Section 5. Deferral of
Principal Payments under Tranche A and B Loans .
Principal payments due on January 20, 2008 and
February 20, 2008 for any Tranche A Loan or Tranche B Loan
shall be deferred until the Maturity Date of the applicable Tranche
Loan.
Section 6. Other
Extensions . The Amended Credit Agreement provides
for certain financial benchmarks and ratios to be achieved by
Borrowers beginning on December 15, 2007. Provided that the
preconditions to extensions described in Section 3 herein and
contingencies set forth herein are met as required, Lenders agree
that the commencement date of December 15, 2007 for the
Current Ratio, Working Capital, Leverage Ratio, and Fixed Charge
Coverage Ratio,
2
and Net Worth shall be
extended to March 1, 2008. The Minimum EBIDTA requirements
shall not be affected by this Extension Agreement, nor shall the
other reporting requirements contained in the Amended Credit
Agreement.
Section 7. Waiver of
filing default . The Lenders acknowledge that the
Borrowers filed a two (2) week extension for the filing of
their SEC 10K and for delivery, within 90 days, of their
August 31, 2007 audit report. To the extent that requesting
this extension creates a Default under the Amended Credit
Agreement, Lenders waive said Default. Borrowers represent and
warrant that the SEC has approved the extension request, and
further represent and warrant that the Borrowers will make the SEC
10K filing by December 14, 2007.
Section 8. Additional
Reporting Requirements . Borrowers shall participate
in, on at least a bi-weekly basis, a conference call including the
Lenders and such other bank group participants as shall elect to
attend. Unless otherwise agreed, Borrowers shall be responsible for
arranging said calls, and providing at least 24 hours notice to all
possible participants.
In
addition to the reporting requirements set forth in the Amended
Credit Agreement, Borrower shall also provide such additional
financial data and analysis as may be reasonably requested by
Lenders, including but not limited to a weekly listing of all
payments made by any Borrower. Said listing shall include the name
of the payee, amount of payment, date of payment, and nature of
payment (i.e. “trade creditor”, “employee”,
“rent”).
Section 9. Termination
of Extension Agreement . This Extension Agreement
terminates without notice to Borrowers upon the occurrence of any
of the following:
A.
Withdrawal of the Commitment by 1NG for any reason, or termination
of the lending process prior to the consummation of the loan
transaction set forth in the Commitment; or
B.
Termination of the lending process with ING by Borrowers, for any
reason, including the unwillingness or inability of Borrowers to
consummate the transaction set forth in the Commitment; or
C.
Failure of Borrowers to make the loan payments due to Lenders on
December 20, 2007 on any
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