10-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC  20549

FORM 10-K

x Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the fiscal year ended August 31, 2008.

o Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the transition period from                         to                          .

Commission File Number:  000-51096

Golden Oval Eggs, LLC

(Exact name of registrant as specified in its charter)

Minnesota	20-0422519
(State or other jurisdiction of incorporation or organization)	(IRS Employer Identification No.)

1800 Park Avenue East, P.O. Box 615

Renville, MN  56284

(Address of principal executive offices)

(320) 329-8182

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:  None

Securities registered pursuant to Section 12(g) of the Act:   Class A Units

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
Yes o No x

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act.
Yes o No x

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

Indicate by check mark if disclosure of delinquent filers pursuant to Rule 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. x

Indicated by check mark whether the registrant is a large accelerated filer, an accelerated filer or a non-accelerated filer:

Large accelerated filer o	Accelerated filer o	Non-accelerated filer x	Smaller reporting company o
		(Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No x

Golden Oval Eggs, LLC is a limited liability company whose common equity, consisting of its Class A units, is subject to significant restrictions on transfer under its Limited Liability Company Agreement.  No public market for voting and non-voting common equity of Golden Oval Eggs, LLC is established and it is unlikely in the foreseeable future that a public market for its voting and non-voting common equity will develop.

As of December 22, 2008, there were outstanding 5,500,353 Class A Units.

DOCUMENTS INCORPORATED BY REFERENCE:

Pursuant to General Instruction G (3), the Company omits Part III, Items 10, 11, 12, 13, and 14 and incorporates such items by reference to an amendment to this Annual Report on Form 10-K to be filed within 120 days after August 31, 2008 or to a definitive proxy statement to be filed within 120 days after August 31, 2008 with the Securities and Exchange Commission.

PART I

Item 1.            Business.

Introduction

Golden Oval Eggs, LLC, a Delaware limited liability company, is an egg production and processing company based in Renville, Minnesota.  Our production output consists of liquid whole egg, liquid egg white and liquid egg yolk, and further processed, value added egg products. Our unpasteurized liquid egg products are sold on a direct basis to companies who further process the unpasteurized liquid egg into various finished egg products including dried eggs, frozen, hard cooked, extended shelf-life liquid, pre-cooked egg patties, and specialty egg products.  Institutional, food service, restaurants, and food manufacturers in turn purchase these further processed products.  On June 30, 2006, we completed the acquisition of certain egg processing assets of MoArk, LLC and its subsidiaries, Cutler at Abbeville, L.L.C., Hi Point Industries, LLC, L&W Egg Products, Inc., Norco Ranch, Inc. and MoArk Egg Corporation (the “MoArk Acquisition”).  MoArk, LLC is a subsidiary of Land O’Lakes, Inc.  As a result of the MoArk Acquisition, we are able to further process the raw liquid egg into various finished egg products and through this additional product line, sell products to retail, foodservice and institutional markets.  The product lines acquired through the MoArk Acquisition have more than doubled our revenues.

Our revenues, which were primarily derived from the production and sale of egg products, were $218.0 million during fiscal 2008 (ending August 31, 2008), $198.3 million during fiscal 2007 (ending August 31, 2007), and $93.6 million during fiscal 2006 (ending August 31, 2006).

On December 15, 2008, we entered into a Purchase and Sale Agreement (the “purchase agreement”) to sell substantially all of our business assets to Rembrandt Enterprises, Inc. (“Rembrandt”).  Rembrandt is an egg producer and processor with facilities in Rembrandt, Iowa and other Midwestern locations.  The aggregate consideration we will receive for our assets in the proposed transaction is approximately $123.75 million in cash (subject to adjustment to reflect our working capital at closing and certain other potential adjustments specified in the purchase agreement) and the assumption of certain specified liabilities by Rembrandt.  The proposed transaction is subject to customary closing conditions, including the receipt of applicable regulatory approvals and the approval of our members.  Upon completion of the necessary regulatory approvals and procedures for distribution of a proxy, we will send our members a proxy statement asking for their vote to approve the proposed transaction.  The transaction has been unanimously approved by our Board of Managers and by the governing board of Rembrandt.  Additional information regarding the proposed transaction is included in Item 9B of this report.

Sales, Marketing and Customers

In the past, a majority of our egg products were sold through a variety of contract arrangements in an effort to reduce price and product sales risk.  As a result, we are currently a party to several multi-year written contracts to supply different customers, based on formula pricing, fixed price, toll milling and market based pricing. Those contracts typically involve the customer’s agreement to purchase a specified quantity of egg products each year during the term of the applicable agreement, and allow either party to terminate the contract upon specified notice to the other party. The current contracts expire at various times over the next three years, subject to termination by either party by giving six to 24 months’ notice.

In fiscal year 2008, there was one customer who represented more than 10% of our total revenues for fiscal year 2008.  That customer was Michael Foods, which represented 18% of our total revenues.  While most of our sales are made in the United States, some of our sales are outside of the United States, primarily to customers in Canada.  In fiscal 2008, non-U.S. sales totaled approximately $727,000, with sales in 2006 and 2007 approximately $3,532,000 and $1,788,000, respectively.  The Canadian shipments are to a facility owned by a significant United States customer and fluctuate based on orders as placed by that customer.

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Egg Industry and Markets

According to the U.S. Department of Agriculture (“USDA”), in 2007, the average number of egg-type laying hens in the United States was 288 million.  Average flock size as of September 2008 was 278 million layers; down from 282 million in the prior year.

In the United States there were 211.1 million cases (estimated) of shell eggs produced in 2007.  Of these 211.1 million cases:

·66.0 million cases (31%) were further processed (for foodservice, manufacturing, retail & export);

·124.6 million cases (59%) went to retail;

·19.0 million cases (9%) went for foodservice use; and

·1.5 million cases (0.7%) were exported.

We participate in the market encompassing the 66.0 million cases, or approximately 2.6 billion pounds of liquid egg, that are further processed into various types of egg product.

Competition

We compete with a number of egg production and processing companies in the United States for customers for shell eggs for processing, unpasteurized liquid egg for further processing, and for customers for further processed egg product.  Our primary competitors include Michael Foods, Cargill Kitchen Solutions (formerly Sunny Fresh Foods), Sonstegard Foods, ConAgra Foods, Sparboe Foods, Crystal Lake, LLC, Wabash Valley Produce, American Egg Products, Deb El Foods, Echo Lake Produce, and Rose Acre Farms.  We also compete with some of our customers who purchase our unpasteurized liquid egg and who further process unpasteurized liquid egg into other egg products.

At August 31, 2008, we had flocks of 6.3 million layers and at August 31, 2007, we had flocks of 6.2 million layers.  According to Egg Industry Magazine, there were 65 companies in the United States with at least 1 million laying hens as of December 31, 2007.  Egg Industry Magazine ranked us as the 9th largest producer nationally as of December 31, 2007 by layers.

Production

Our production operations in Renville, Minnesota and Thompson, Iowa consist primarily of a fully automated, environmentally controlled complex where hens produce shell eggs with an egg flow, feeding and watering system for layers.  These eggs gently roll to a conveyor belt that delivers the eggs to the processing facility in an adjoining room. Eggs are cleaned, shells removed, and yolks separated from whites.  The raw liquid egg is stored in stainless steel tanks, and later shipped out to customers or our own further processing facilities.  In addition to processing eggs from our own layers, we also purchase eggs from third parties for further processing.

The facilities acquired in the MoArk Acquisition do not produce eggs, but procure shell eggs and liquid eggs from other suppliers.  The acquired facilities rely upon liquid egg production from our internal facilities for a portion of their supply of raw liquid egg.  These plants generally have egg breaking and pasteurizing capabilities, in addition to a wide range of production platforms for further processed products, as well as refrigerated and frozen storage.

Feed is a primary cost component in the production of eggs.  At our Thompson, Iowa production facility, we have our own feed mill onsite.  At our Renville, Minnesota facility, we jointly own a feed mill, United Mills, with two other companies.  We purchase corn and other feed ingredients and custom mix our own feed.  Additionally, we process the shell by-products from our Thompson and Renville processing plants

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into poultry feed.  Prices for feed and feed ingredients can fluctuate and can be affected by weather and by various supply and demand factors.  We generally purchase the feed needed for our hens based upon the then-prevailing market price for such feed and feed ingredients.

Governmental Regulation

We are subject to federal and state regulations relating to grading, quality control, labeling, sanitary control and waste disposal.  Our egg processing facilities are subject to regulation by both the U.S. Department of Agriculture and the U.S. Food and Drug Administration.  We believe that we are in material compliance with the applicable regulatory requirements.  We also maintain our own inspection program to assure compliance with applicable regulatory requirements, our standards and customer specifications.

Environmental Matters

We are subject to several federal, state and local environmental regulations. The federal environmental regulations with which we must comply were promulgated by the U.S. Environmental Protection Agency (the “EPA”) pursuant to the Clean Air Act, Clean Water Act, Resource Conservation and Recovery Act, Comprehensive Environmental Response Compensation, and Liability Act, and the Emergency Planning and Community Right to Know Act.  The EPA has delegated permitting and most enforcement authority under each of these acts to the states in which we have facilities. Thus, we are primarily required to comply with the provisions of regulations promulgated by the various state environmental agencies pursuant to these federal acts.

In an effort to ensure that we do not experience any issues related to certain federal enforcement actions, in July 2005 we agreed to participate in a national program established by the EPA under which we entered into a Consent Agreement and Final Order with the EPA under which the EPA released us from potential federal enforcement actions under the Clean Air Act, the hazardous substance release notification provisions of the Comprehensive Environmental Response, Compensation and Liability Act, and the emergency notification provisions of the Emergency Planning and Community Right-to-Know Act.  In return, we agreed to be potentially selected as one of several egg production farms that would receive on-site monitoring to determine potential air emissions from poultry barns.  However, we subsequently were not selected for on-site monitoring.  Under the Consent Agreement, we also agreed to comply with new regulations likely to be promulgated by the EPA at the end of the air monitoring study period later in this decade.

Except for the Consent Order with the Iowa Attorney General regarding alleged violations at the wastewater treatment facility at our Thompson, Iowa facility discussed under “Legal Proceedings,” we believe that we are currently in material compliance with applicable environmental laws and regulations and have all necessary material permits for existing operations. We maintain an on-going program designed to ensure compliance with environmental laws and regulations. Any future changes in environmental laws or regulations might increase the cost of operating our facilities and conducting our business. Any such changes could have material adverse consequences on our business and results of operations.

Intellectual Property Rights

As a result of the MoArk Acquisition, we acquired certain intellectual property assets, including an exclusive, royalty bearing license from Land O’ Lakes, Inc. for certain egg products, a half interest in a patent to produce a value added product for use in the industrial market, a trademark for an extended shelf life product, and several registered and unregistered trademarks and trade names, as well as other patents and patent applications. The royalty bearing license agreement with Land O’ Lakes was terminated June 1, 2008.

Research and Development

In connection with the MoArk Acquisition, on July 1, 2006, we entered into an agreement with RTECH Laboratories, a business unit of Land O’ Lakes, Inc., for research and development services for products

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covered by a license agreement and for unlicensed products. The agreement with RTECH Laboratories expires December 31, 2008.  We had no material expenditures for fiscal years 2008, 2007 or 2006 in research and development.

Employees

As of August 31, 2008, we had approximately 509 full-time employees.  None of our employees are covered by collective bargaining agreements.  We consider our relationships with employees to be good.

Available Information

Our website address is www.goldenovaleggs.com. We file with or furnish to the SEC Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and any amendment to those reports, proxy statements and annual reports to shareholders, and, from time to time, other documents.  We make available, free of charge, these reports and other documents filed with or furnished to the SEC as soon as reasonably practicable after we electronically file them with or furnish them to the SEC. In addition, the public may read and copy any of the materials we file with the SEC at the SEC’s Public Reference Room at 100 F Street, NE, Washington DC 20549. The public may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. The SEC maintains an internet site that contains reports, proxy and information statements and other information regarding issuers, such as the Company, that file electronically with the SEC. The address of that Web site is http://www.sec.gov.

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Item 1A.         Risk Factors.

The Company is currently subject to a variety of risks to its business, operations and financial status.  Those risks can be grouped into the general categories of risks related to the proposed transaction with Rembrandt and risks associated with the operation of the Company’s business.  The risks associated with the proposed transaction will impact the Company until the proposed transaction is either completed or terminated.  The risks associated with the operation of the Company’s business will impact the Company until the proposed transaction is completed and will also be applicable to the Company if the proposed transaction is not completed.

If any of the following risks actually occur, our results of operations, cash flows, and the market for and market price of our units could be negatively impacted.  Although we believe that we have identified and discussed below the key risk factors affecting our business, there may be additional risks and uncertainties that are not presently known or that are not currently believed to be significant that may adversely affect our performance or financial condition.

Risks Related to the Proposed Transaction with Rembrandt

The Company and Rembrandt  may be unable to obtain the regulatory approvals required to complete the proposed transaction or, in order to do so, Rembrandt may be required to comply with material restrictions or conditions, which it may be unable or unwilling to do.

The proposed transaction is subject to the requirements of the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the “HSR Act”), and the rules and regulations promulgated thereunder, which provide that some acquisition transactions may not be completed until required information has been furnished to the Federal Trade Commission (“FTC”) and the Antitrust Division of the Department of Justice and until a statutory waiting period has been terminated or has expired.  The Company and Rembrandt intend to file the required HSR Act notifications with the Antitrust Division and the FTC as soon as practicable following execution of the Purchase and Sale Agreement with Rembrandt, and may request early termination of the HSR Act waiting period. There can be no assurance that such early termination will be granted and, even if granted, the termination of the HSR Act waiting period does not preclude the Antitrust Division, the FTC or others from challenging the proposed transaction on antitrust grounds and seeking to preliminarily or permanently enjoin the proposed transaction or challenge the completed transaction. Neither the Company nor Rembrandt believe that the transaction will violate federal antitrust laws, but there can be no guarantee that the Antitrust Division or the FTC will not take a different position.

The Company’s business will be adversely affected if the proposed transaction is not completed.

Completion of the proposed transaction is subject to several closing conditions, including obtaining the requisite Company member approval, and the Company may be unable to obtain such approval or fulfill the other closing conditions on a timely basis or at all.  While the Company’s future operations may be negatively impacted  to the extent that potential customers and suppliers are uncertain about its future direction, the Company’s future financial status and future operational activities may also be adversely affected if the proposed transaction is not completed. 

As described in the Liquidity and Capital Resources subsection of the Management’s Discussion and Analysis of Financial Condition and Results of Operations, the Company has obtained a series of extensions and amendments to its credit arrangements with its lenders.  As a condition to the various extensions of the Company’s debt, the Company’s lenders have required that the Company consider and pursue a strategic transaction, such as a sale of all or substantially all of the Company’s assets, in order to allow complete repayment of the Company’s lenders.  The Company’s plan, if the proposed transaction is completed, is to first use the proceeds of the transaction to repay the Company’s lenders in full.  From the amounts remaining after repayment of the Company’s lenders, the Company’s Board of Managers will establish amounts to be retained to cover our post-transaction expenses and any remaining contingent liabilities.  In that scenario, the Company would make an initial distribution of the remaining amounts to its unit holders and, if the retained amounts are not used in their entirety, would make a subsequent distribution to its unit holders of the remainder of such retained amounts.  If the proposed transaction is not completed, the Company does not believe that its lenders will provide further extensions of the Company’s credit arrangements.  As a result, if the proposed transaction is not completed, the Company’s lenders could declare the Company to be in default under its credit arrangements if the Company could not obtain refinancing or complete some other strategic transaction in order to provide full repayment to its lenders on a timely basis.  In addition, the Company will become subject to higher interest rates and costs associated with its debt arrangements if the proposed transaction is not completed. 

If the proposed transaction is not completed, but the Company is able to obtain future extensions from its lenders or repay those lenders from a refinancing or alternative strategic transaction, the Company’s business would still be adversely impacted.  The Company will be required to pay significant costs incurred in connection with the proposed transaction, including legal and accounting fees, whether or not the proposed transaction is completed.  In addition, the Company will incur the fees and expenses associated with the fairness opinion by KeyBanc Capital that will be described in the proxy statement to be distributed to the Company’s members.

Certain of the officers, managers and directors of the Company have interests and arrangements that could affect their decision to support or approve the proposed transaction.

The Company’s Board of  Managers and members of the management team were involved in and directed the negotiation of the proposed transaction agreement with Rembrandt, approved the purchase agreement and, in the Company’s proxy statement that will  be distributed to the Company’s members in connection with the members’  vote on the proposed transaction, may recommend that the members approve and adopt the Purchase and Sale Agreement and the proposed transactions contemplated by that agreement.  Cerrtain of the officers and managers of the Company have interests in the proposed transaction and related transactions that are different from, or in addition to, the interests of the Company’s members.  Such interests include the following:

· Following the proposed transaction, the Company’s managers and executive officers will have rights to receive indemnification for certain liabilities incurred prior to the closing of the proposed transaction; and

· Certain members of the Company’s management team may be offered continued employment with Rembrandt after the closing of the proposed transaction;

A description of these and other interests of the Company’s managers, directors and executive officers in the proposed transaction will be contained in the proxy statement to be distributed in connection with the proposed transaction.

The Company’s members have no dissenters’ rights of appraisal.

The Company’s members are not entitled to dissent to the proposed transaction and assert appraisal rights under the Company’s Amended and Restated Limited Liability Company Agreement or under applicable Delaware law.  Accordingly, the Company’s members do not have the right to seek a judicial determination of the fair value of their limited liability company units.

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The purchase agreement limits the Company’s ability to pursue alternatives to the proposed transaction.

The purchase agreement contains terms and conditions that make it more difficult for the Company to sell its business to a party other than Rembrandt. These “no shop” provisions impose restrictions on the Company that, subject to certain exceptions, limit the Company’s ability to discuss, facilitate or commit to competing third party proposals to acquire all or a significant part of the Company.

If the Company’s members approve the proposed transaction, Rembrandt and the Company may waive one or more conditions to the proposed transaction without the Company having to obtain further member approval.

Each of the conditions to Rembrandt and the Company’s obligations to complete the proposed transaction may be waived, in whole or in part, to the extent permitted by applicable law, by agreement of Rembrandt and the Company  if the condition is a condition to both parties’ obligation to complete the proposed transaction, or by the party for which such condition is a condition of its obligation to complete the proposed transaction. If the Company’s members approve the proposed transaction at the special meeting and either Rembrandt or the Company subsequently waive a condition to closing contained in the Purchase and Sale Agreement, the Company’s board of directors will evaluate the materiality of any such waiver to determine whether member approval of the amendment is necessary.  In the event the Company’s board of directors determines any such waiver is not significant enough to require resolicitation of members, it will have the discretion to complete the proposed transaction without seeking further member approval.

The proposed transaction will be taxable to the Company’s Unitholders.

If the transaction closes, the Company will receive approximately $123,750,000 for the assets of the Company being sold.  That amount will, in turn, be allocated to the various assets (or classes of assets) of the Company being sold.  The Company will recognize gain (or loss) on the sale of those various assets, measured by the difference between: (1) the amount of the aggregate purchase price allocated to each asset (or class of assets); and (2) the Company’s adjusted tax basis in that asset (or class of assets).  Amounts allocated to an asset in excess of its basis will be treated as a gain, while amounts allocated to an asset that is less than its basis will be treated as a loss.  Certain gains and losses (particularly from the sale of the Company’s inventory, accounts receivable and recapture of depreciation deductions previously claimed) will be treated as ordinary income or loss, while the remaining gains and losses will be treated as capital gains and losses.  Gains and losses treated as ordinary income or loss will then be aggregated, as will capital gains and losses.

Unitholders will be required to separately report on their federal income tax return their allocable share of the aggregated ordinary income (or loss) and the aggregated capital gain (or loss) from the transaction, as so calculated.   Such amounts will be reportable by each unit holder for the tax year in which the transaction closes.

In previous tax years, the Company has incurred operating losses that, because of the “passive loss rules” (Internal Revenue Code Section 469), have been deferred. The Company expects that these deferred passive losses will be available to reduce the amount of income otherwise allocable to and reportable by Unitholders from the transaction, whether or not the Company is liquidated in the same tax year in which the transaction occurs.

Under applicable tax regulations, the adjusted basis of your interest in the Company generally is increased by your allocable share of the Company’s taxable income and decreased by your allocable share of the Company’s taxable loss.  Allocations of taxable income and loss generally are made on the last day of the Company’s taxable year.  Therefore, gain (or loss) from the transaction will increase (or decrease) your basis in the Company as of the last day of the tax year in which the transaction closes.

Unless the Company liquidates, cash distributions from the Company to you generally are not taxable for federal income tax purposes except to the extent that the amount of cash distributed exceeds the adjusted tax basis of your interest in the Company immediately before the distribution.  Applicable regulations provide that advances of money against your distributive share of income are treated as if made on the last day of the Company’s taxable year.  Therefore, if the Company does not liquidate in the same year in which the transaction closes, cash distributions to you of sale proceeds will generally not be taxable except to the extent they exceed the basis of your interest in the Company (as adjusted because of the transaction).  Any such cash distributions will, however, reduce the basis of your interest in the Company.

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If and when the Company liquidates, in general you will be treated as if you disposed of your interest in the Company in a sale or exchange.  Assuming that you have held your interest in the Company for more than one year, you will be treated as having incurred a long-term capital gain (or loss) measured by the difference between: (1) the adjusted basis of your interest in the Company (as adjusted because of the transaction); and (2) the amount you receive from the Company on its liquidation.  You will be required to report that gain (or loss) for the tax year in which the liquidation of the Company occurs.

It is possible that a Unitholder could be allocated both a capital gain from the transaction and a capital loss as a result of the liquidation of the Company.  This could occur, for example, if the Company sells certain assets for amounts that exceed the Company’s adjusted basis in those assets.  The gain recognized by the Company would increase the adjusted basis of your interest in the Company.  If the Company then distributed to you in liquidation an amount that was less than that adjusted basis, you would recognize a capital loss.  If both the transaction and the liquidation of the Company occur in the same year, the capital loss from the liquidation would reduce the capital gain from the transaction and you would pay tax only on the difference.  If, however, the liquidation occurs in a year later than the year in which the transaction closes, you may be required to recognize and pay tax on the capital gain allocated to you on account of the transaction without any reduction for capital losses.  Those capital losses, if any, would be available to be claimed by you in the year in which the Company finally liquidated subject, however, to limitations in the Code on your ability to deduct more than $3,000 in capital losses in any year in excess of any capital gains for that year.

Risks Related to Our Business Activities

We must refinance our existing credit arrangements or obtain some other source of financing for repayment of our lenders and to provide access to sufficient working capital for our business. 

We have historically relied on cash generated from our operations to make payments on our debt, primarily consisting of our indebtedness under the Credit Agreement, and to partly fund working capital, capital expenditures, strategic acquisitions, investments and joint ventures and other general corporate requirements.  We have historically obtained most of our working capital from our credit arrangements with our lenders.  As described in the Liquidity and Capital Resources subsection of the Management’s Discussion and Analysis of Financial Condition and Results of Operations, the Company has obtained a series of extensions and amendments to its credit arrangements with its lenders.  As a condition to the various extensions of the Company’s debt, the Company’s lenders have required that the Company consider and pursue a strategic transaction, such as a sale of all or substantially all of the Company’s assets, in order to allow complete repayment of the Company’s lenders. 

If the proposed transaction with Rembrandt is not completed, we must either complete an alternative strategic transaction in order to repay our lenders in full, obtain a refinancing of the credit arrangements in order to continue our business activities as currently constituted or obtain additional funds from the sale of equity interests in Golden Oval.  During fiscal years 2008 and 2007, we unsuccessfully sought additional financing to refinance our current credit arrangements.

No assurance can be given that any alternative strategic transaction will be on terms and conditions desirable or acceptable to us or our members.  No assurance can be given that resources for the repayment of our lenders or additional working capital will be obtained from a refinancing or sale of equity interests in an amount that is sufficient for our needs, in a timely manner or on terms and conditions desirable or acceptable to us or our members.  Our efforts to raise additional funds by incurring additional indebtedness may be hampered by the fact that we already have significant outstanding indebtedness and all of our assets are pledged to our lenders to secure our obligations under our current credit arrangements. If we obtain debt financing, a substantial portion of our operating cash flow may be dedicated to the payment of principal and interest on such indebtedness, thus limiting funds available for our business activities.  Our efforts to raise additional funds from the sale of equity may be hampered by the fact that our securities are illiquid and are subject to restrictions on transfer.  Sales of equity securities could also result in additional substantial dilution to the current holders of our Class A Units.  

Even if we are successful in obtaining the resources necessary to refinance our current credit arrangements and to meet our short-term working capital needs, our ability to generate cash is subject to general economic, financial, competitive, legislative, regulatory and other factors that are beyond our control.  We cannot assure you that we will generate cash flow from operations sufficient to fund our business needs in the future.  We also cannot assure you that we will be able to correspondingly reduce our need for capital with any declines in our income from operations, whether through implementing cost savings and operating improvements, or that we will increase net sales growth to a level sufficient to support our business, if at all.  

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Market prices of wholesale liquid eggs and the further processed egg products we produce are volatile and changes in these prices can adversely impact our results of operations.

Our operating results are significantly affected by wholesale liquid egg market prices, which fluctuate widely and are outside of our control. Small increases in production or small decreases in demand can have a large adverse effect on the price to our customers of our liquid egg products.  Over the last several years, egg prices and demand for liquid egg have both increased and decreased, due to a variety of factors such as decrease in production of eggs due to facilities closures, the outbreak of poultry disease, and consumer preference for high protein/low carbohydrate diets.  Even though increases in production or decreases in may result in disproportionate adverse impact on liquid egg prices, we may not be able to correspondingly adjust our production, expenses or prices to our customers to mitigate the impact of the decline in liquid egg prices.   In addition, many further processed liquid egg products are priced in relation to liquid egg prices, and the premium over the liquid egg price does not necessarily increase or decrease at the same time or in the same proportion as the underlying price of liquid eggs.  The volatility of liquid egg prices and our inability to timely anticipate and respond to changes in liquid egg pricing or manage the spread risk of processed egg products can have a material adverse effect on our future results of operations and financial condition

Changes in consumer demand for liquid eggs can negatively impact our business.

Demand for liquid eggs has increased in recent years as a result of a number of factors. We believe that increased fast food restaurant consumption, favorable reports from the medical community regarding the health benefits of liquid eggs, reduced liquid egg cholesterol levels, and industry advertising campaigns have all contributed to the increase in liquid egg demand.  However, there can be no assurance that the demand for liquid eggs will not decline in the future. Adverse publicity relating to health concerns and changes in the perception of the nutritional value of liquid eggs, could adversely affect demand for liquid eggs, which would have a material adverse effect on our future results of operations and financial condition.

Feed costs are volatile and changes in these costs can adversely impact our results of operations.

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Feed costs represent a significant element of our liquid egg production cost, equating to approximately 25% of total annual cost in the last fiscal year. Although feed ingredients are available from a number of sources, we have little, if any, control over the prices of the ingredients that we purchase, which are affected by various demand and supply factors and have experienced significant fluctuations in the past.  Increases in feed costs which are not accompanied by increases in the selling price of liquid eggs will have a material adverse effect on the results of our operations.  Recently, increased demand for corn for ethanol production has resulted in extreme price volatility.  The impact of a permanent increase in demand for ethanol may raise production costs adversely affecting our ability to compete with other food sources, as eggs become relatively more expensive compared to other food sources.

Our sales will decline and our business will be materially harmed if there is any loss of any significant customer or any reduction, delay or cancellation of orders from any significant customer.

During 2007 and 2008 we derived more than 10% of our revenue from Cargill Kitchen Solutions and Michael Foods, who represented 8% and 18% of our revenues for fiscal year 2008, respectively, and 12%, and 19% of our revenues for fiscal year 2007, respectively.  During 2006, we derived more than 10% of our revenue from Primera Foods, Sunny Fresh Foods, and Michael Foods, who represented 14%, 23%, and 31% of our revenues for fiscal year 2006, respectively.  The loss of these customers or any other large customer could have a negative impact on our operating results.  While we would attempt to replace the lost sales through other customers, we cannot be certain that we would be able to replace any lost sales.  Our customers could cease buying our products from us at any time and for any reason.  The loss of any major customer would disrupt distribution of our products and result in a loss of revenue.  If a significant number of our customers cease purchasing products from us, our business would be materially and adversely harmed.  Further, any significant reduction or delay in the historical level of orders from our customers or cancellation of orders from any significant customer would have a negative impact on our operating results.

Failure to comply with applicable governmental regulations, including environmental regulations, could harm our operating results, financial condition and reputation.

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We are subject to federal and state regulations relating to grading, quality control, labeling, sanitary control and waste disposal. As a fully-integrated liquid egg producer, our liquid egg facilities are subject to United States Department of Agriculture (the “USDA”), and Food and Drug Administration (the “FDA”), regulation and various state and local health and agricultural agencies. Our liquid egg processing facilities are subject to continuous USDA inspections. Our feed production facilities are subject to FDA regulation and inspections.

Our operations and facilities are also subject to various federal, state and local environmental, health and safety laws and regulations governing, among other things, the generation, storage, handling, use, transportation, disposal and remediation of hazardous materials. Under these laws and regulations, we are also required to obtain permits from governmental authorities, including, but not limited to wastewater discharge permits.

If we fail to comply with any applicable law or regulation or permit, or fail to obtain any necessary permits, we could be subject to significant fines and penalties or other sanctions, our reputation could be harmed and our operating results and financial condition could be materially and adversely affected.  In particular, the resolution of the notices of violation issued against us by the Iowa Department of Natural Resources relating to the wastewater treatment facility at our Thompson, Iowa facility have resulted in fines and expense.  See Part I of this Form 10-K, Item 3.  “Legal Proceedings.”  In addition, because these laws and regulations are becoming increasingly more stringent, there can be no assurances that we will not be required to incur significant costs for compliance with such laws and regulations in the future.

Our business is highly competitive.

The production and sale of liquid egg products is intensely competitive. We compete with a large number of companies that may prove to be more successful than we are in marketing and selling products. We cannot assure you that we will be able to compete successfully with any or all of these companies, some of whom have greater marketing, financial, development and personnel resources than we do.

In addition, increased competition could result in price reductions, greater cyclicality, reduced gross profit margins and loss of market share and could require increased spending by us on product research and development, sales and marketing support, which would negatively affect our business, results of operations and financial condition.

Agricultural risks could harm our business.

Our liquid egg production activities are subject to a variety of agricultural risks. Unusual or extreme weather conditions, disease and pests can materially and adversely affect the quality and quantity of liquid eggs we produce and distribute. If a substantial portion of our production facilities are affected by any of these factors in any given quarter or year, our business, financial condition and results of operations could be materially and adversely affected.

If we do not maintain adequate supply of eggs or if we fail to adequately forecast demand, the likely resulting delays in delivering products to our customers would damage our business.

We do not maintain a significant inventory of liquid egg product.  We forecast production based on past sales and our estimates of future demand.  In the event that we significantly underestimate our needs or encounter an unexpectedly high level of demand for our liquid egg product or we are unable to produce liquid egg product in a timely manner, we may be unable to fill our product orders on time which could harm our reputation and result in reduced sales.

Outbreaks of disease affecting poultry could reduce our ability to produce our liquid egg product and reduce sales.

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The productivity and profitability of our business depends upon the health of hens that produce our eggs (“layers”) and disease control among the population of our layers.

We face the risk of outbreaks of poultry diseases, such as Newcastle disease and avian influenza (also known as “bird flu”), which could lead to the destruction of our poultry flocks. Because these diseases can be highly contagious and destructive, any such outbreak of disease could result in the widespread destruction of infected flocks. Destruction of any part of our flocks could result in a decreased supply of layers and eggs, which could reduce our sales and profit margin, as well as result in increased expense to replace the destroyed infected flocks and to contain the poultry disease.  Additionally, our business may be adversely impacted if public concerns about the poultry diseases led consumers in the United States to reduce their consumption of eggs and egg products generally or reduce their consumption of our liquid egg products in response to any outbreak of disease among our flocks.

Product liability claims or product recalls could adversely affect our business reputation and expose us to increased scrutiny by federal and state regulators.

The sale of food products for human consumption involves the risk of injury to consumers and the sale of animal feed products involves the risk of injury to those animals as well as human consumers of those animals. Such hazards could result from:

·tampering by unauthorized third parties;

·product contamination (such as listeria, e. coli. and salmonella) or spoilage;

·the presence of foreign objects, substances, chemicals, and other agents; or

·improperly formulated products which either do not contain the proper mixture of ingredients or which otherwise do not have the proper attributes.

Most of the products that we sell are integrated into products sold by third parties and such third parties may not have adequate quality control standards to assure that such products are not adulterated, misbranded, contaminated or otherwise defective.  We may be subject to claims made by consumers as a result of products manufactured by these third parties.

Consumption of our products may cause serious health-related illnesses and we may be subject to claims or lawsuits relating to such matters.  An inadvertent shipment of adulterated products is a violation of law and may lead to an increased risk of exposure to product liability claims, product recalls and increased scrutiny by federal and state regulatory agencies. Such claims or liabilities may not be covered by our insurance or by any rights of indemnity or contribution which we may have against others in the case of products which are produced by third parties. In addition, even if a product liability claim is not successful or is not fully pursued, the negative publicity surrounding any assertion that our products caused illness or injury could have a material adverse effect on our reputation with existing and potential customers and on our brand image. If we determine to recall any of our products, we may face material consumer claims.

Special interest groups can have adverse impacts on the industry’s reputation, and as the Golden Oval brand becomes known the risk of identification by special interest groups increases.

Changing consumer expectations with regard to treatment of animals and animal effluent may result in unfavorable publicity for participants in the industry who do not meet the demands of activists.  The unfavorable publicity may adversely affect the entire industry regardless of the practices of any particular producer.  Furthermore, as the Golden Oval brand becomes more recognizable, the potential for being singled out by special interest pressure groups may increase, diverting management time and attention and having an adverse impact on sales, operations, and returns to unitholders.

The price of our Class A Units may be volatile and a unitholder’s investment could decline in value.

The price of our Class A Units has fluctuated in the past and may continue to fluctuate significantly, making it difficult for an investor to resell shares or to resell shares at an attractive price.  The market prices

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for securities of emerging companies have historically been highly volatile.  Future events concerning us or our competitors could cause such volatility, including:

·actual or anticipated variations in our operating results;

·technological innovations or new commercial products introduced by us or our competitors;

·developments concerning proprietary rights;

·changes in senior management;

·investor perception of us and our industry;

·general economic and market conditions including market uncertainty;

·national or global political events; and

·public confidence in the securities markets and regulation by or of the securities markets.

In addition, the market for the Class A Units is subject to price and volume fluctuations that affect the market prices for companies in general, and small-capitalization companies in particular, which are often unrelated to the operating performance of these companies.  Any failure by us to meet or exceed estimates of unitholders is likely to cause a decline in the price of our Class A Units.

There is no public market for our Class A Units and no public market is expected to develop.

There is no established public trading market for our Class A Units, and we do not expect one to develop in the foreseeable future. To maintain our partnership tax status, we do not intend to list the units on any stock exchange or automatic quotation system such as the Nasdaq Stock Market. As a result, unitholders may have to hold their Class A Units for an indefinite period of time because they may not be able to readily resell their units.  Further, even if a unitholder is able to sell the Class A Units, the unitholder may not be able to sell at a price equal to the unitholder’s investment or a price that is otherwise attractive to the unitholder.

The Class A Units are subject to significant restrictions on transfer.

The ability to transfer our Class A Units is restricted by our Limited Liability Company Agreement.  Members wishing to transfer their Class A Units will be required to obtain the prior consent of our Board of Managers before making any transfer of the Class A Units. As a result of our analysis of strategic alternatives and subsequent execution of the purchase agreement with Rembrandt, since April of 2008 our Board of Managers has suspended the approval for transfers. Transferability of units is restricted in part to ensure that we are not deemed a “publicly traded partnership” and thus taxed as a corporation. As a result, unitholders may have to hold their Class A Units for an indefinite period of time because they may not be able to readily resell their units.

Our ability to issue additional Class A Units or other classes of units may dilute or otherwise limit your voting or economic rights or have the effect of preventing a change in control.

Our Board of Managers has the ability to issue an unlimited number of additional Class A Units or units of other classes. The Board of Managers also has the ability to establish the designations, powers, preferences, rights, qualifications, limitations or restrictions of any additional class of units, and to alter the relative economic rights of units.  Such rights, powers, preferences and privileges may be greater than those associated with the Class A Units.  Issuances of additional units may have the effect of diluting or otherwise limiting the voting or economic rights of holders of Class A Units, particularly if the units are issued on more favorable terms than the Class A Units.  Issuance of additional classes of units may also have the effect of preventing changes in control of Golden Oval Eggs, even if such change in control would be beneficial to holders of Class A Units.

Future sales of shares of our units in the public market may negatively affect our Class A Units price.

Future sales of our Class A Units, our Class B Units or any other newly-created class of membership units, or the perception that these sales could occur, could have a significant negative effect on the market price of our Class A Units.  In addition, issuances of additional Class A Units could decrease future distributions to holders of Class A Unit, if any, and could depress the market value of our Class A Units.  Because our

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Class B Units are treated as the same as Class A Units for the purposes of distributions, the issuance of additional Class B Units could also dilute future distributions to holders of Class A Units.  Dilution and potential dilution, and the possibility of additional issuances and sales of our Class A Units, Class B Units or other classes of units may negatively affect both the trading price of our Class A Units and the liquidity of our Class A Units.

We are dependent on key personnel.

Our future success depends, in significant part, upon the continued service and performance of our senior management and other key personnel, in particular Dana Persson, our Chief Executive Officer, Robert A. Harrington, our Chief Operating Officer and Thomas A. Powell, our Chief Financial Officer. The loss of the services of Messrs. Persson, Harrington, or Powell could impair our ability to effectively manage our company and to carry out our business plan. While we have an employment agreement with each of Messrs Persson, Harrington, and Powell, either party may terminate the executive officer’s employment at any time with or without cause. The other members of our management team also have significant experience with our company and in our industry. We may face particular challenges in retaining members of management while the transaction with Rembrandt is pending, given the uncertainty around the transaction generally and any actual or perceived uncertainty around their on-going role with the Company if the transaction is completed.  The loss of any member of our senior management could likewise impair our ability to effectively manage our company and carry out our business plan.  We do not carry key person life insurance on any of our executive officers.

In addition, competition for skilled employees in our industry is intense. Our future success also depends on our continuing ability to attract, retain and motivate highly qualified managerial, operations and sales personnel.  Our inability to retain or attract qualified personnel could have a significant negative effect and materially harm our business and financial condition.

Compliance with changing regulation of corporate governance and public disclosure may result in additional expenses.

Keeping abreast of, and in compliance with, changing laws, regulations and standards relating to corporate governance and public disclosure, including the Sarbanes-Oxley Act of 2002 and in particular Section 404 of that act relating to management certification of internal controls and the regulations of the Securities and Exchange Commission, have required an increased amount of management attention and external resources and have caused delays in our periodic filings.  The investments needed for us to attempt to comply with evolving corporate governance and public disclosure standards may result in increased general and administrative expenses and a diversion of management time and attention from revenue-generating activities to compliance activities, and our failure to comply with these standards could lead to adverse regulatory action.

Item 1B.         Staff Comments.

None.

Item 2.            Properties.

We maintain production and processing facilities at a total of seven sites, including our original 60-acre site in Renville, Minnesota that is also our headquarters, and a second 240-acre site northeast of Thompson, Iowa.  The remaining five facilities were acquired with the MoArk Acquisition, with one each in Alabama, Missouri and Ohio, and two in California.

Abbeville, Alabama

We own the production facility in Abbeville, which is a 90,000 square foot facility, built in 1970.  Approximately 30,000 square feet are occupied by freezers and finished product coolers.  The plant has egg breaking, pasteurizing, and drying capabilities, in addition to a wide range of production platforms for

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further processed products.  The Abbeville facility is subject to a mortgage to secure our indebtedness. The breaking and drying operations have been terminated and the carrying value of these assets have been impaired as more fully described in Item 7.

Vernon, California

We lease approximately 30,034 square feet of manufacturing and processing space in our Vernon facility pursuant to three leases that expire February 28, 2010. Total monthly payments on the leases are $24,492, with a provision in each for adjustment based upon the Consumer Price Index.  The Vernon facility is located near Los Angeles and has breaking, pasteurizing, and packaging capabilities as well as refrigerated and frozen storage.  The breaking, pasteurizing, and packaging operations have been terminated and the carrying value of the assets have been impaired as more fully described in Item 7.

Norco, California

We lease approximately 102,000 square feet in Riverside County, California pursuant to a sublease we entered into in connection with the MoArk Acquisition. The sublease expires February 2, 2010 and monthly payments are $12,463.  This site has breaking, pasteurizing, packaging, freezing, and hard cooked capabilities.

Neosho, Missouri

We lease a  30,650 square foot facility in Neosho.  The lease on the Neosho facility terminates on December 31, 2011 and requires monthly lease payments based on a sliding schedule consisting of a base charge of $15,000 per month plus a charge per case of eggs received for breaking and a flat charge per tanker of liquid egg received. The average monthly lease payment is approximately $21,508.  This facility has breaking, pasteurizing and packaging capabilities as well as refrigerated and frozen storage.

Millersburg, Ohio

We lease the 45,000 square foot Millersburg facility pursuant to a lease that expires June 30, 2009 and calls for monthly payments of $14,430 per month subject to adjustment with the Consumer Price Index.  The Millersburg facility is primarily an egg breaking operation with limited pasteurization and packaging capacity. In September, 2008, the decision was made to close this location by December 31, 2008.  The Company expects to recognize approximately $585,000 of expense in the first fiscal quarter of 2009 for severance and other associated costs.

Renville, Minnesota

The Renville facility consists of a total of 623,000 square feet of barns, processing and office space.   The corporate offices of Golden Oval Eggs are located at this processing operation. Our Renville facility is subject to a mortgage to secure our indebtedness.

Thompson, Iowa

The Thompson facility consists of 1,660,800 square feet of barns, processing, office and storage space, with the second phase of construction adding three layer barns was completed in the first calendar quarter of 2006.  We own the land on which our Thompson facility is located through Midwest Investors of Iowa, Inc., a cooperative that we control. The land is collateral for debt obligations of Midwest Investors of Iowa, Inc. relating to the land.

Item 3.            Legal Proceedings.

Recent events in our industry have resulted in a variety of disputes, including disputes with government authorities and an array of private parties.  Following is a summary of certain material cases and procedures in which the company has been, or continues to be, involved.

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United States Department of Justice Grand Jury Investigation

On March 27, 2008, the Company received a grand jury subpoena issued by the Antitrust Division of the U.S. Department of Justice (“DOJ”) in the Eastern District of Pennsylvania, requesting documents for the period of January 1, 2002 through March 27, 2008 relating primarily to the pricing, marketing, and sales of egg products.  The Company has produced documents in response to the subpoena and has been informed by government prosecutors that it is not a target of the government’s investigation.  The DOJ has not provided to the Company the factual basis for its investigation.  Aside from the discovery requested by the DOJ, it does not appear that the DOJ is seeking any relief from the Company.

Civil Antitrust Claims

In late September 2008, after media reports publicized the existence of the investigation by the DOJ, several groups of plaintiffs’ lawyers filed class action civil antitrust suits against the Company and other companies in the egg products industry.  The complaints were filed in the United States District Court for the District of Minnesota and the United States District Court for the Eastern District of Pennsylvania.  The Company informed the plaintiffs’ lawyers in each case that the Company was not a target of the government’s investigation, and the plaintiffs agreed to voluntarily dismiss their claims against the Company without prejudice in exchange for a tolling agreement that would allow the plaintiffs to re-assert their claims if it was determined that the Company had any liability.  The Company has not been renamed as a defendant in any of the complaints.

On December 2, 2008, because complaints had been filed in both Minnesota and Pennsylvania, the United States Judicial Panel on Multidistrict Litigation ordered that all of the complaints be consolidated before the Honorable Gene E.K. Pratter, United States District Court Judge for the Eastern District of Pennsylvania.  The cases have been consolidated under a master file in the matter of T.K. Ribbings Family Restaurant v. United Egg Producers, Inc. et al., 08-cv-465-GP (E.D. Pa.).  The Company was voluntarily dismissed from this action on October 8, 2008.

The Company has also been voluntarily released from the following tag along actions related to the above described litigation:

ZaZa, Inc. v. Golden Oval Eggs LLC, et al., 08-cv-5262 (DSD/JSM) (D. Minn.)

Somerset Industries, Inc. v. Cal-Maine Foods, Inc., 08-cv-4676-LS (E.D. Pa.)

Bemus Point Inn, Inc. v. United Egg Producers, Inc., 08-cv-4750-GP (E.D. Pa.)

The Egg Store, Inc. v. United Egg Producers, Inc., 08-cv-4880-GP (E.D. Pa.)

Nussbaum – SF, Inc. v. United Egg Producers, Inc., 08-4819-GP (E.D. Pa.)

Julius Silvert, Inc. v. Golden Oval Eggs LLC, 08-cv-5174-GP (E.D. Pa.)

Environmental Proceedings

Our Thompson, Iowa facility has an industrial wastewater treatment facility designed to treat wastewater from egg breaking.  The Thompson facility has a National Pollution Discharge and Elimination System (“NPDES”) permit from the Iowa Department of Natural Resources (“IDNR”) that governs the quality of the wastewater influent to and effluent from the treatment facility.

Beginning in 2001 and through July 2008, IDNR issued several Notices of Violation (“NOV”) against us regarding alleged violations of the NPDES permit discharge limits for biochemical oxygen demand, total suspended solids, and ammonia nitrogen.

On March 29, 2007, the Iowa Attorney General’s office filed suit against us requesting civil penalties and injunctive relief against further NPDES permit violations.  To address the violations, we decided to make certain capital infrastructure improvements to our Thompson wastewater treatment facility totaling $2.5 million.  The improvements are designed to ensure full compliance with the NPDES permit.  In addition,

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operational changes were made at the wastewater facility to achieve significant improvement in compliance with the NPDES permit requirements.

On February 11, 2008, we received a construction permit from IDNR for the improvements to the wastewater facility.  On July 14, 2008, a Consent Order, Judgment and Decree was filed in Iowa District Court for Winnebago County.  The Order is a settlement with the Iowa Attorney General and obligated us to pay a $200,000 civil penalty to the State of Iowa for the alleged violations, and to complete the permitted improvements to the Thompson wastewater facility by April 30, 2009.  We paid the $200,000 civil penalty in July 2008, and construction of the wastewater improvements are on schedule, with substantial completion expected by January 2009.  Once the improvements are completed and there are no further violations of the permit, our obligations under the Consent Order will be satisfied.

Item 4.            Submission of Matters to a Vote of Security Holders.

None.

PART II

Item 5.            Market for Registrant’s Common Equity and Related Stockholder Matters.

There is no established trading market for our Class A Units or our Class B Units and none is expected to develop.  As of August 31, 2008 there were 689 holders of Class A Units and one holder of a warrant to purchase 880,492 Class A Preferred Units.

Item 6.            Selected Financial Data.

The following table sets forth selected financial data of Golden Oval Eggs, LLC. The information presented as of and for the fiscal years ended August 31, 2008, 2007, 2006, 2005, and 2004 is derived from our financial statements, which have been audited by Moore Stephens Frost, our independent auditors.

You should read the financial data presented below along with “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” as well as the financial statements and related notes included at the end of this Annual Report on Form 10-K.

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Selected Financial Data of Golden Oval Eggs, LLC
(in thousands, except unit and per unit data)

	2008			2007			2006			2005			2004
Income Statement Data:
Revenues, net	$	218,046		$	198,277		$	93,638		$	63,196		$	83,543
Cost of goods sold	195,111			183,367			79,851			52,118			50,693
Gross profit	22,935			14,910			13,787			11,078			32,850
Operating expenses	22,036			20,919			9,734			7,677			9,749
Income from operations	899			(6,009		)	4,053			3,401			23,101
Interest expense	(8,862		)	(10,026		)	(3,835		)	(6,385		)	(2,732		)
Non-controlling interest in income of consolidated entities	(97		)	(16		)	42			(103		)	(41		)
Other income	927			878			805			750			513
Forgiveness of debt	17,000			—			—			—			—
Income (loss) before income tax expense (benefit)	9,867			(15,173		)	1,065			(2,337		)	20,841
Income tax expense (benefit)	8			—			2			(378		)	2,926
Net income (loss)	$	9,859		$	(15,173	)	$	1,063		$	(1,959	)	$	17,915
Basic weighted average members’ units outstanding	5,456,358			5,423,218			4,811,023			4,581,762			4,581,762
Diluted weighted average members’ units outstanding	5,933,995			5,423,218			4,811,023			4,581,762			4,581,762
Basic net income (loss) per members’ unit	$	1.82		$	(2.80	)	$	0.22		$	(0.43	)	$	3.91
Diluted net income (loss) per members’ unit	$	1.67		$	(2.80	)	$	0.22		$	(0.43	)	$	3.91
Distributions per members’ unit	$	—		$	—		$	—		$	—		$	4.22

	2008		2007		2006		2005		2004
Balance Sheet Data:
Current assets	$	45,374	$	38,684	$	32,936	$	17,992	$	25,926
Property, plant and equipment	57,789		68,205		79,829		69,614		55,143
Other assets	38,801		43,489		45,235		3,339		6,396
Total assets	$	141,964	$	150,378	$	158,000	$	90,945	$	87,465
Current liabilities	$	99,543	$	43,034	$	26,169	$	13,523	$	24,360
Long-term debt, less current maturities	6,420		84,727		94,257		46,546		30,335
Total owners’ equities	$	36,001	$	22,617	$	37,574	$	30,876	$	32,770
Basic weighted average members’ units outstanding	5,456,358		5,423,218		4,811,023		4,581,762		4,581,762
Diluted weighted average members’ units outstanding	5,933,995		5,423,218		4,811,023		4,581,762		4,581,762
Basic book value per member unit	$	6.60	$	4.17	$	7.63	$	6.73	$	7.15
Diluted book value per member unit	$	6.07	$	4.17	$	7.63	$	6.73	$	7.15

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Item 7.            Management’s Discussion and Analysis of Financial Condition and Results of Operation.

Forward-Looking Statements

The following discussion contains forward-looking statements. Such statements are based on assumptions by our management, as of the date of this report, and are subject to risks and uncertainties, including those discussed under Part I, Item 1A. “Risk Factors” in this report, that could cause actual results to differ materially from those anticipated. We caution readers not to place undue reliance on such forward-looking statements.

Overview

We are engaged in the production of egg products.  From 1994 to 2006, we were a first stage processor engaged in the breaking and sale of non-pasteurized liquid whole eggs, liquid whites, and liquid yolks. We primarily marketed our liquid eggs on a direct basis to companies who further process the raw liquid eggs into various egg products such as dried eggs, frozen, hard cooked, extended shelf-life liquid, pre-cooked egg patties, specialty egg products, etc.  Institutional, food service, restaurants, and food manufacturers in turn purchase these further processed products.

On June 30, 2006, we completed the MoArk Acquisition.  With the MoArk Acquisition, we entered into the business of further processing liquid egg into various finished egg products.  We have maintained our integrated production facilities in Renville, Minnesota and Thompson, Iowa, and will continue to supply some of the needs of the acquired facilities which were customers prior to the Moark Acquisition.

Our operating income or loss is significantly affected by wholesale liquid egg prices and feed costs, primarily corn and soybean meal, which can fluctuate widely and are outside of our control. Liquid eggs are a commodity product and prices fluctuate in response to supply and demand factors.  Feed costs are similarly commodity products subject to wide fluctuations, but not necessarily correlated with liquid egg prices.

Our cost of production is materially affected by feed costs,which have been extremely volatile and which average approximately 25% of our total direct costs. Approximately 75% of these feed costs are incurred in the procurement of corn and soybean meal.  The cost of these ingredients is affected by a number of supply and demand factors such as crop production and weather, and other factors, such as the level of grain exports, over which we have little or no control.

The open market quoted price of liquid unpasteurized whole eggs has fluctuated widely over the last five years, from a low of $0.21 per pound to a high of $1.075 per pound, according to reports by Urner Barry Publications, Inc.  The high price occurred in March 2008.  Market prices averaged $0.4260 per pound in fiscal year 2007 and $0.2666 per pound in fiscal year 2006.  Both years are below five year average prices of approximately $0.4648 per pound.  The average reported price for fiscal year 2008 was $0.7824, ranging from a high of $1.075 per pound at the beginning of the third fiscal quarter to a low of $0.63 per pound at the end of the third fiscal quarter.

A portion of our production is sold to customers under long-term contracts at fixed prices that are necessarily not tied to the market price at the time of delivery.  Depending upon market circumstances, the prices generated by our contract sales tend to be either less or more than what the prevailing open market prices would generate.

Currently, we do not have any additional facility expansions underway at any of our facilities.  However, we are currently undertaking the construction of improvements to the wastewater treatment facility at our Thompson, Iowa facility.  See Part I of this Form 10-K, Item 3.  “Legal Proceedings.”

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Results of Operations

The following table presents the amounts sold and weighted average sales prices of those sales for the liquid eggs for the twelve month fiscal periods presented.

Year ending August 31	2006		2007		2008
Pounds sold (in millions)	258.2		378.1		280.9
Average price per pound	$	0.349	$	0.502	$	0.724

Fiscal Year Ended August 31, 2008 Compared to Fiscal Year Ended August 31, 2007

Net Sales.  Net sales for the fiscal year ending August 31, 2008 were $218.0 million, an increase of $19.7 million, or 9.97%, as compared to fiscal year 2007. Sales pounds decreased by  97.2 million pounds as compared to fiscal year 2007.  The majority of the increase in net sales, or $13.8 million, is due to higher average selling prices for liquid egg products driven by increased input costs mainly feed for the hens.  Sales from United Mills increased $4.4 million due to increased grain prices.

Cost of Goods Sold.  Cost of goods sold for fiscal 2008 was $195.1 million, an increase of $11.7 million, or 6.4%, over the prior year.  The increased cost of grain, shell eggs, and purchased liquid eggs accounted for the additional cost. Average feed cost per ton increased in fiscal year 2008 to $176.97 per ton as compared to $124.12 per ton cost in fiscal year 2007, an increase of  42.6%.

Operating Expenses.  Operating expenses for fiscal 2008 were $22.0 million, an increase of $1.1 million, or  5.3%, from the prior year fiscal year. Actual expenses decreased $2.6 million due to the withdrawal from the retail market and the termination of the royalty bearing license agreement with Land O’ Lakes. In fiscal 2008, we incurred an impairment charge of $3.7 million consisting of $.5 million in obsolete assets in Abbeville and Vernon, and $3.2 million intangible impairment due to the termination of the royalty bearing Land O’ Lakes license agreement.

Total Other Expense.  Total other expense decreased  to $(9.0) million in fiscal 2008 from $9.2 million in the prior year, a decrease of  $18.2 million. The decrease was primarily due to the negotiated adjustment to the purchase price of the MoArk acquisition, which resulted in debt forgiveness of $17.0 million and six months worth of interest expense savings  of $1.0.

Income Taxes.  We expect to be treated as a partnership for federal income tax purposes and thus we will not be required to pay income tax.  Rather, our members will pay tax on their share of our net income. Accordingly, we did not record a provision for income taxes in fiscal year 2008 or fiscal year 2007. United Mills recorded income tax expense of $.008 million for fiscal year 2008.

Fiscal Year Ended August 31, 2007 Compared to Fiscal Year Ended August 31, 2006

Net Sales.  Net sales for the fiscal year ending August 31, 2007 were $198.3 million, an increase of $104.6 million, or 111.7%, as compared to fiscal year 2006.  The majority of the increase, or $100.7 million, is due to the inclusion of twelve months of results for the business acquired in the Moark Acquisition compared to only two months of operations in the prior fiscal year.  Higher average selling prices for unpasteurized liquid eggs slightly offset lower reported sales from the Renville, Minnesota and Thompson, Iowa facilities as production was used internally instead of sold to third parties.  Sales from United Mills increased $2.6 million due to increased grain prices.

Cost of Goods Sold.  Cost of goods sold for fiscal 2007 was $183.4 million, an increase of $103.5 million, or 129.6% over the prior year.  The MoArk Acquisition businesses accounted for $87.2 million of the increase, while the increased cost of grain and shell eggs accounted for $12.2 million additional cost in Renville and Thompson and $2.9 million additional cost at United Mills.

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Operating Expenses.  Operating expenses for fiscal 2007 were $20.9 million, an increase of $11.2 million, or  114.9% from the prior year.  An increase in marketing expenses for new products as well as new management and technical staff hired in to manage a larger and more complex business contributed to an increase in expenses, while the newly acquired business accounted for $3.1 million. Full year amortization of intangibles arising from the acquisition accounted for $1.6 million of expense compared to two months of expense in fiscal 2006. In addition, an impairment charge of $1.3 million relating to certain fixed assets at the Millersburg facility and obsolete assets at the Abbeville facility was recorded.

Total Other Expense.  Total other expense increased to $9.2 million from $3.0 million in the prior year, a increase of $6.2 million.  Interest expense on higher average debt levels associated with the acquisition accounted for the expense increase.

Income Taxes.  We expect to be treated as a partnership for federal income tax purposes that will not be required to pay income tax.  Rather, our members will pay tax on their share of our net income. Accordingly, we did not record a provision for income taxes in fiscal year 2007 or fiscal year 2006.  United Mills recorded income tax expense of $.002 million in fiscal year 2006.

Fiscal Year Ended August 31, 2006 Compared To Fiscal Year Ended August 31, 2005

Net Sales.  Net Sales for the fiscal year ended August 31, 2006 were $93.6 million, an increase of $30.4 million, or 48.1%, as compared to fiscal year 2005.  The increase is due to increased sales of liquid egg products largely attributable to the completion of the Thompson, Iowa facility in January 2006 and the resultant sale of its production, accounting for $11.2 million of the increase.  Sales of product produced at the facilities acquired in the MoArk Acquisition generated additional sales of $20.2 million from July 1, 2006, the first day following the closing of the acquisition, to August 31, 2006, our fiscal year end.  A small decline in the weighted average selling price of liquid eggs accounted for approximately $0.8 million of reduced sales.

Cost of Goods Sold.  Cost of goods sold for fiscal 2006 was $79.8 million, an increase of $27.7 million, or 53.2% over the prior year.  The MoArk Acquisition businesses accounted for $18.9 million of the increase, with the balance attributable to increased sales volumes in the liquid egg business existing prior to the acquisition.  Unit costs of production declined slightly due to modest declines in the average cost per ton of feed and the cost per dozen of purchased shell eggs.

Operating Expenses.  Operating expenses for fiscal 2006 were $9.7 million, an increase of $2.0 million, or 26.8% from the prior year.  New management and technical staff hired in anticipation of managing a larger and more complex business contributed to an increase in expenses, while the newly acquired business accounted for $1.0 million. Amortization of intangibles arising from the acquisition accounted for $0.3 million of expense in the last two months of the fiscal year.

Total Other Expense.  Total other expense declined to $3.0 million from $5.7 million in the prior year, a reduction of $2.7 million.  In the prior year, charges related to the retirement of the 2000 bonds resulted in a charge to interest expense of $2.3 million reflecting the adjustment of the embedded interest rate swap agreement to fair market value.  No such charges were incurred in fiscal year 2006.  Interest income of consolidated entities increased by $0.2 million over the prior year, while miscellaneous other income was largely unchanged.

Income Taxes.  We expect to be treated as a partnership for federal income tax purposes that will not be required to pay income tax.  Rather, our members will pay tax on their share of our net income.  Accordingly, we did not record a provision for income taxes in fiscal year 2006 or fiscal year 2005.  United Mills recorded tax expense of $.002 million in fiscal year 2006.

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Our Conversion From A Cooperative to a Limited Liability Company

Effective August 31, 2004, Midwest Investors of Renville, Inc., d/b/a “Golden Oval Eggs”, a Minnesota cooperative (the “Cooperative”) was converted into a limited liability company with Golden Oval Eggs, LLC being the surviving company in the conversion.  We operate as the successor to the Cooperative and our operations are a continuation of the operations of the Cooperative.

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Liquidity and Capital Resources

Our working capital at August 31, 2008 was negative ($54.0) million compared to negative ($4.3) million at August 31, 2007.   Due to various factors discussed below, certain portions of our long term debt have been treated as coming due within twelve months, and reported as a current liability, which is what caused working capital to be negative.  Without this change in the treatment of the bank debt, working capital would have improved to $3.8 million at August 31, 2008.  Our current ratio was 0.5 at August 31, 2008 compared to 0.9 at August 31, 2007. Without the change in treatment of bank debt, the current ratio would have improved to 1.1 at August 31, 2008.  Golden Oval Eggs, LLC, Midwest Investors of Iowa and GOECA, LP are parties to a Credit Agreement that was originally entered into on September 13, 2004, first amended on November 30, 2005 and amended and restated on June 30, 2006 and subsequently amended or extended on April 30, 2007 and October 19, 2007, December 14, 2007, March 11, 2008 and August 29, 2008.  We have historically financed our working capital needs through the Credit Agreement and, to the extent of our cash flow, from operations.

The Amended and Restated Credit Agreement executed in June 2006 provided us with an additional $38.0 million of debt that was used to finance the MoArk Acquisition and revolving lines of credit and swing loans to facilitate seasonal variations in liquidity requirements.  The first amendment to the Amended and Restated Credit Agreement extended the term of the revolving loans from April 30, 2007 to March 1, 2008 and also amended certain covenants. The second amendment to the Amended and Restated Credit Agreement (1) provided us with an additional $2.5 million through a short term revolving note due December 14, 2007, (2) deferred principal payments due October 20, 2007 and November 20, 2007, (3) required us to retain a financial adviser to evaluate strategic alternatives, and (4) modified our financial covenants for the period ending December 14, 2007.

On December 13, 2007, we entered into an Extension Agreement with the lenders under our Amended and Restated Credit Agreement, as amended, which extends the termination date of the $2.5 million short-term revolving note from December 14, 2007 to March 1, 2008, the original termination date of the revolving facility.  The Extension Agreement also extends the commencement date of financial covenants from December 15, 2007 to March 1, 2008 and deferred principal payments on the Tranche A and Tranche B term debt until the due date of the respective Tranche.

On February 15, 2008, the Company and LOL executed an agreement whereby the purchase price of the Egg Products Division of MoArk was reduced by $17 million by reducing the amount of the subordinated note used to finance the acquisition.  The Warrant to subscribe for and purchase units of Golden Oval Eggs, LLC (the “2006 Warrant”) was surrendered and cancelled as part of the purchase price reduction.  Additionally, the Company issued a warrant to LOL for a convertible preferred security exchangeable for up to 880,492 Class A units in exchange for the forgiveness of accrued interest on the subordinated note.  The convertible preferred security also carries a preference upon liquidation of $10.0 million in the aggregate;  however, the liquidation preference is not available to LOL if the convertible preferred security has been exercised for the issuance of the 880,492 Class A units.  The 697,350 Class B units held by LOL were converted to Class A units per the agreement.

On March 11, 2008, the Company entered into an Extension and Amendment Agreement of its credit facility which extended the termination date of the revolving line of credit to July 31, 2008 and continued the deferral of principal payments on the bank debt, specifically the Tranche A and Tranche B loans.  Payments of $200,000 per month were to be made into an interest bearing account to set aside funds for improvements to waste water processing at the Thompson, Iowa facility made as part of the settlement of matters with the Iowa Attorney General and DNR (See Litigation for further discussion).

On August 29, 2008, the Company entered into a Third Amendment of its credit facility.  Under this amendment, principal payments on the Company’s Tranche A and Tranche B debt were resumed, in the amount of $692,000 per month in the aggregate.  This resumption was made possible by improved earnings and cash flow reported in the Company’s third fiscal quarter ending May 31, 2008 and continued through its fourth fiscal quarter.  Additionally, a further $1.7 million was to be placed in an interest bearing account to fund the balance of improvements in waste water processing at the Thompson, Iowa facility.

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We expect that cash flow from operations will be sufficient to fund operations.  However, it may not be sufficient to make all payments of interest and principal when due, and to make distributions to our members for at least the next 12 months.  We would require significant additional capital resources in order to proceed with potential future expansions or to otherwise respond to competitive pressures in the industry.  Despite improved financial performance, deteriorating credit markets have led our lenders to pressure the company to reduce its total indebtedness.  That pressure included, as a condition to the various extensions of the Company’s debt described above, requirements for the Company to consider and pursue a strategic transaction, such as a sale of all or substantially all of Company’s assets, intended to allow complete repayment of the Company’s lenders.  The arrangements also included penalty rates of interest in the event that the Company did not pursue a strategic transaction on a time schedule acceptable to the Company’s lenders.  Financial advisors were retained and strategic alternatives explored, resulting in the execution of the agreement with Rembrandt Enterprises, Inc. described elsewhere in this report.  Although the Company has been meeting negotiated covenants, it continues to be unable to meet its original covenants under the June 2006 Credit Agreement that financed the MoArk transaction.  Given the uncertainties surrounding the ability to meet these covenants and the inability to secure long-term funding from the current bank group, the long term portion of the bank debt has been treated as current for reporting purposes. Please see Item 9B Other Information for a summary of the proposed transaction with Rembrandt.

Capital expenditures for additions to plant, property and equipment for fiscal 2008 totaled $0.3 million.  Capital expenditures for plant, property and equipment totaled $1.4 million in 2007.  Capital expenditures for 2006 totaled $38.3 million, primarily for the purchase of assets relating to the MoArk acquisition.

Our long-term debt including current maturities at August 31, 2008 was $73.9 million, compared to $94.2 million at August 31, 2007, and $103.7 million at August 31, 2006. The decrease in long term debt in 2008 is due primarily to the elimination of the $17.0 million subordinated note, the timely payment of principal on the corporate bonds, and two months of principal payments on senior bank debt under the Credit Agreement.  Substantially all trade receivables and inventories collateralize our line of credit, and property, plant and equipment collateralize our long-term debt under our loan agreements. We are current on all interest and principal repayment requirements under existing credit agreements.  No events of default have occurred or been declared.

At August 31, 2008, we had an interest rate collar agreement that was originally embedded in our Corporate Bonds, Series 2000, which limited the variability of the interest rate on the bonds to a range of 8.46% to 7.31%, and was determined to be clearly and closely related.  In September 2004, we entered into a new financing agreement and a portion of the proceeds from the new financing was used to retire the Corporate Bonds, Series 2000.  At the time the Corporate Bonds, Series 2000 were retired in September 2004, the interest rate collar agreement became a separate stand-alone agreement.  As of August 31, 2008, the interest rate collar agreement, which terminates on July 10, 2010, has a notional amount of $14.3 million.  The interest rate collar agreement requires that we maintain a collateral account.  The fair value of the interest rate collar agreement is recorded as a reduction of the value of the collateral account in our consolidated balance sheet.  As of August 31, 2008, the net value of the collateral account was $0.3 million.  Subsequent to the fiscal year end, in October 2008, the Company terminated the interest rate collar agreement and the related exposure to a volatile interest rate environment.  Excess collateral of $913 was returned to the Company by the counterparty.  As interest rates have subsequently continued to drop in response to the current credit environment, the Company has avoided capital calls to the counterparty on the floor component of the collar agreement, eliminating an unpredictable potential demand on cash resources.

Net cash flow from operations was $5.1 million for fiscal 2008.  Usage on the revolving line of credit increased by $4.4 million, offsetting payments of long term debt of $3.3 million and an increase in restricted cash of $1.4 million, primarily for the Thompson waste water project.  Coupled with active management of receivables and trade debt and improved earnings in the third and fourth fiscal quarters, the Company was able to report $4.3 million in cash balances at fiscal year end, compared to no cash at the end of the prior fiscal year.

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Net cash flow from operations was $2.6 million for fiscal 2007.  A total of $1.4 million was paid for additions to fixed assets during the fiscal year.  No additional term debt was issued.  The revolving line of credit increased by $8.0 million.

Net cash flow from operations was $1.4 million for fiscal 2006.  A total of $38.3 million was paid for fixed assets and intangibles during the course of the year.  Proceeds from new debt were $41.0 million and $5.5 million of debt was repaid.  The revolving line of credit provided an additional $1.1 million in funds.  An additional $0.3 million was paid for financing costs related to the MoArk Acquisition.  Cash balances declined $0.5 million at the end of fiscal year 2006.

Contractual Obligations

The following table presents our various known contractual obligations as of August 31, 2008, in thousands:

	Payments due by period
Contractual Obligations	Total		Less than 1 year		1-3 years		3-5 years		More than 5 years
Long-Term Debt	$	73,946	$	67,526	$	3,898	$	1,204	$	1,318
Operating Leases	5,090		1,441		1,958		1,014		677
Construction Obligations	2,500		2,500		—		—		—
Total	$	81,536	$	71,467	$	5,856	$	2,218	$	1,995

The data presented in the preceding table does not include any expected interest payments. The construction obligation is for the Thompson Waste Water project.

Critical Accounting Estimates

We prepare our financial statements in accordance with accounting principles generally accepted in the United States of America (“GAAP”). Our significant accounting policies are discussed in detail in Note 1 to the consolidated financial statements included at the end of this document. Certain of these accounting policies as discussed below require management to make estimates and assumptions about future events that could materially affect the reported amounts of assets, liabilities, revenues and expenses and disclosure of contingent assets and liabilities. We base our assumptions, estimates and judgments on historical experience, current trends and other factors that management believes to be relevant at the time the consolidated financial statements are prepared.  On a quarterly basis, management reviews the accounting policies, assumptions, estimates and judgments to ensure our financial statements are presented fairly and in accordance with GAAP. However, because future events and their effects cannot be determined with certainty, actual results could differ from our assumptions and estimates, and such differences could be material.

We believe that the following accounting policies are the most critical to aid in fully understanding and evaluating our reported financial results, and they require our most difficult and subjective judgments, resulting from the need to make estimates about the effect of matters that are inherently uncertain. We have reviewed these critical accounting policies and estimates with the Audit Committee of our Board of Managers.

Allowance for Doubtful Accounts.  In the normal course of business, we extend credit to our customers on a short-term basis. Although credit risks associated with its customers are considered minimal, we routinely review our accounts receivable balances and make provisions for probable doubtful accounts. In circumstances where management is aware of a specific customer’s inability to meet its financial obligations to us (e.g. bankruptcy filings), a specific reserve is recorded to reduce the receivable to the amount expected to be collected. For all other customers, we recognize reserves for bad debts based on management’s experience and the length of time the receivables are past due, generally the entire balance for amounts more than 90 days past due.

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Inventories.  Inventories of eggs, processed egg products, feed and supplies are valued principally at the lower of cost (first-in, first-out method) or market. If market prices for eggs and feed grains move substantially lower, we would record adjustments to write-down the carrying values of eggs and feed inventories to fair market value.

The cost associated with flock inventories, consisting principally of chick costs, feed, labor, and overhead costs, are accumulated during the growing period of approximately 18 weeks.  Layer flock costs are capitalized to the point at which the pullet goes into production and are amortized over the productive lives of the flocks, generally 18 to 24 months. High mortality from disease or extreme temperatures would result in abnormal adjustments to write-down flock inventories. Management continually monitors each flock and attempts to take appropriate actions to minimize the risk of mortality loss.

Long-Lived Assets.  Depreciable long-lived assets are primarily comprised of buildings and improvements and machinery and equipment. Depreciation is provided by the straight-line method over the estimated useful lives based on management’s experience, which is 7 to 39 years for buildings and improvements and 3 to 15 years for machinery and equipment. An increase or decrease in the estimated useful lives would result in changes to depreciation expense. In the year ended August 31, 2008, there were no write-offs as a result of changes to asset useful lives.

We continually reevaluate the carrying value of our long-lived assets for events or changes in circumstances that indicate that the carrying value may not be recoverable. As part of this reevaluation, if impairment indicators are present, we estimate the future cash flows expected to result from the use of the asset and its eventual disposal. In the year ended August 31, 2008, we determined that  impairment of $3.7 million had occurred consisting of  $3.1 million from the termination of the Land O’ Lakes License agreement, $.4 million at the Abbeville facility due to the loss of  quality egg suppliers, $.2 million at the Vernon facility due to egg supply availability.

Intangible Assets

As a result of the MoArk Acquisition that was completed June 30, 2006, we acquired intangible assets consisting of licenses to use certain brand names and trademarks, licenses of certain product technology and certain patents and patent applications.  We recorded the excess of consideration paid over assets acquired.  Financial Accounting Standard No. 141 “Business Combinations” dictates that values be assigned to certain intangible assets.  We accordingly made estimates of the values to be carried on our books for intangible assets acquired, including registered and unregistered trade names and trademarks, licensing agreements, and patents and patent applications.  The values of these assets are determined by forecasting future cash flows and assessing the risk of achieving the forecast.  Those intangible assets with finite lives will be amortized over a period matching the life of the underlying intellectual property, for example, the term of the license agreement or the remaining life of the patent.  Those intangibles with indefinite lives have been recorded as goodwill, and will not be amortized over a fixed time period.  Rather, they will be tested for impairment when impairment indicators are deemed present or on an annual basis.   As of August 31, 2008,  we concluded the fair value of the single entity reporting unit exceeded the carrying value of the reporting unit based on the pending sale of substantially all of the operations.  As a result, no provision for impairment was required.

Financial Instruments.  Our financial instruments consist primarily of cash equivalents, accounts receivable, long-term receivable, accounts payable, debt, and an interest rate collar agreement.  The carrying amounts of cash equivalents, accounts receivable, and accounts payable approximate their fair values because of the short-term maturity of such instruments.  The stated value of our long-term receivables approximates their fair value based on current market rates for financial instruments of the same remaining maturities and risk characteristics.  The carrying values of long-term debt instruments approximate their fair value because interest rates on such debt are periodically adjusted and approximate current market rates. The interest rate collar agreement manages our exposure to fluctuations in interest rates.  We have accounted for this agreement in accordance with Statement of Financial Accounting Standards (“SFAS”) No. 133, “Accounting for Derivative Instruments and Hedging Activities, “as amended by SFAS No. 138 “Accounting

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for Certain Derivative Instruments” and SFAS No. 149 “Amendment of Statement 133 on Derivative Instruments and Hedging Activities”. Interest rate swap contracts are reported at fair value with the gain or loss on market value recorded as an increase or reduction of interest expense. At August 31, 2006, no interest rate swap agreements are designated as hedges.  An increase or decrease in the fair value of these financial instruments would result in changes of the recorded value of these financial instruments in our consolidated financial statements.  During the year ended August 31, 2005, we had only one abnormal and material adjustment due to fluctuations in the fair values of financial instruments.  This adjustment recognized a $2.3 million decrease in the recorded value of the collateral on the interest rate collar agreement at the time this agreement was determined to no longer be clearly and closely related to the Corporate Bonds, Series 2000. Due to the changing collateral values, in fiscal 2008 a net loss of $(.6) million was recorded as an increase in interest expense. Subsequent to the end of fiscal 2008, we recognized income in September 2008 from the interest rate collar agreement of $.9 million recorded as a reduction of interest expense. We terminated the interest rate collar agreement October 2, 2008 resulting in a loss of $(.2) million  recorded as an increase to interest expense.

Recent Accounting Pronouncements

In September 2006, the FASB issued SFAS No. 157, “Fair Value Measurements.”  SFAS No. 157 establishes a single authoritative definition of fair value, sets out a framework for measuring fair value, and expands on required disclosures about fair value measurement.  SFAS No. 157 is effective for the Company on September 1, 2008 and will be applied prospectively.  Management does not believe the adoption of SFAS No. 157 will have a significant impact on its consolidated financial statements.

In February 2007, the FASB issued SFAS No. 159, “Establishing the Fair Value Option for Financial Assets and Liabilities,” to permit all entities to choose to elect to measure eligible financial instruments at fair value.  SFAS No. 159 applies to fiscal years beginning after November 15, 2007 with early adoption permitted for an entity that has also elected to apply the provisions of SFAS No. 157, “Fair Value Measurements.”  An entity is prohibited from retrospectively applying SFAS No. 159, unless it chooses early adoption.  Management does not believe the adoption of SFAS No. 159 will have a significant impact on its consolidated financial statements.

In December 2007, the Financial Accounting Standards Board (“FASB”) issued FASB Statement No. 160, Noncontrolling Interests in Consolidated Financial Statements (“FAS 160”). FAS 160 establishes accounting and reporting standards for the noncontrolling interest in a subsidiary and for the deconsolidation of a subsidiary. The effective date of FAS 160 is for fiscal years beginning on or after December 15, 2008. Golden Oval is reviewing FAS 160  to determine what impact it may have to the consolidated financial statements.

In March 2008, the Financial Accounting Standards Board (“FASB”) issued FASB Statement No. 161, Disclosures about Derivative Instruments and Hedging Activities, an Amendment to FASB Statement No. 133. FAS 161 establishes the disclosure requirements for derivative instruments and hedging activities and expands the disclosure requirements of statement 133. The effective date for financial statements issued for fiscal years and interim periods beginning after November 15, 2008. Golden Oval is reviewing FASB 161 but anticipates very little impact to the Company.

The FASB issued two new statements in May 2008, FASB Statement No. 162, The Hierarchy of Generally Accepted Accounting Principles and FASB Statements No. 163, Accounting for Financial Guaranty Insurance Contract, an interpretation of FASB 60. FASB 162 identifies sources of accounting principles and establishes a hierarchy of accounting principles to be used in preparation of financial statements in conformity with GAAP for non governmental entities. FASB 162 is effective 60 days following SEC approval of Public Company Accounting Oversight Board (PCAOB) amendments to AU section 411. The Company does not anticipate any impact with the enactment of FASB 162. FASB 163 clarifies the recognition and measurement of claim liabilities in an insured financial obligation by insurance enterprises. FASB 163 is not applicable to the Company.

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Item 7A.         Quantitative and Qualitative Disclosures About Market Risk.

Market risk is the risk of loss to future earnings, to fair values or to future cash flows that may result from changes in the price of a financial instrument. The value of a financial instrument may change as a result of changes in interest rates, commodity prices, exchange rates, equity prices and other market changes. Market risk is attributed to all market-risk sensitive financial instruments, including long-term debt.

We do not believe we are subject to any material market risk exposure with respect to interest rates, commodity prices, exchange rates, equity prices, or other market changes that would require disclosure.

Item 8.            Financial Statements and Supplementary Data.

The Report of Independent Registered Public Accounting Firm and our consolidated balance sheets as of August 31, 2008 and 2007, our related consolidated statements of operations, owners’ equity and cash flows for each of the three years in the period ended August 31, 2008, and the Notes to the Consolidated Financial Statements are set forth listed immediately following the signature page of this Annual Report on Form 10-K.

Item 9.            Changes in and Disagreements With Accountants on Accounting and Financial Disclosure.

There are no disagreements with the accountants on accounting or financial disclosure.

Item 9A(T).   Controls and Procedures.

Evaluation of disclosure controls and procedures

Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we conducted an evaluation of our disclosure controls and procedures, as such term is defined in Rule 13a-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”).

Based on this evaluation, our Chief Executive Officer and our Chief Financial Officer concluded that our disclosure controls and procedures were not effective as of August 31, 2008.  In their evaluation, our Chief Executive Officer and Chief Financial Officer concluded that there is a continuing deficiency in our disclosure controls and procedures, as previously reported, relating to our failure to maintain a sufficient number of personnel to support our consolidation and financial reporting processes for the periodic reports required under the Exchange Act.  As a result of this deficiency, we were unable to timely file this Form 10-K for the year ended August 31, 2008 because we required additional time to finalize the financial statements and to prepare the Annual Report and related disclosures, as well as additional time to allow our registered independent public accounting firm to complete the audit following completion of our work. While we did secure additional personnel resources during the first quarter of this fiscal year to assist with the consolidation and financial reporting process, as reported in our Quarterly Report on Form 10-Q for the quarter ended May 31, 2008, this did not fully alleviate the deficiency, and we were evaluating other possible remedial actions to improve our disclosure controls and procedures.  However, prior to our putting in place any additional remedial measures, the existing deficiency was exacerbated during the fourth quarter as our limited resources have been diverted to evaluating strategic alternatives and, having decided to pursue the transaction with Rembrandt, facilitating Rembrandt’s due diligence investigation as well as negotiating the definitive purchase agreement.

Management’s Annual Report on Internal Control over Financial Reporting

Management is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act.

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Management conducted a preliminary evaluation of the effectiveness of internal control over financial reporting as of August 31, 2008.  Management determined, based on the preliminary evaluation, that the Company’s internal control over financial reporting did not satisfy the criteria established in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”).    Factors such as those described in the preceding paragraphs, including the inability to file the Company’s report on Form 10-K on or before November 30, 2008,  led to management’s conclusion that that the Company’s internal control over financial reporting did not meet the criteria established by COSO.

Management has concluded that, due to the deficiencies identified above under “Evaluation of disclosure controls and procedures” and due to the failure to meet the COSO criteria, as of August 31, 2008 our internal control over financial reporting was not effective.

Changes in Internal Control Over Financial Reporting

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, has evaluated whether any change in our internal control over financial reporting occurred during the fourth quarter of fiscal 2008. Based on that evaluation, management concluded that our internal controls over financial reporting were subject to the events and influences described above in this Item 9A under the heading “Evaluation of disclosure controls and procedures”.

This annual report on Form 10-K does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting. Additionally, management’s report was not subject to attestation by our registered public accounting firm pursuant to temporary rules of the Securities and Exchange Commission that permit us to provide only management’s report in this annual report.

Item 9B.         Other Information

Purchase and Sale Agreement

The “Company and its affiliates GOECA, LP, GOEMCA, Inc., and Midwest Investors of Iowa, Cooperative (each party is referred to as a “Seller Party” and, collectively, the “Seller”) entered into the purchase agreement with Rembrandt (“Purchaser”) dated December 15, 2008.  Under the terms of the purchase agreement, Rembrandt will purchase from Seller substantially all of the assets used in the operation of Seller’s business of producing, processing, and distributing value added egg products (the “business assets”).  The purchase price paid by Rembrandt to Seller for the business assets, will be $123,750,000,  subject to adjustment by a closing working capital adjustment and certain other potential adjustments specified in the purchase agreement.  Rembrandt has represented to us in the purchase agreement that at closing it will have sufficient funds to pay the purchase price, and the closing is not contingent upon Rembrandt receiving financing.

Consummation of the transactions contemplated under the purchase agreement is subject to certain closing conditions, including approval of the purchase agreement by the Company’s members and the expiration or termination of the applicable waiting period under the HSR Act.

Each Seller Party jointly and severally has made representations and warranties in the purchase agreement regarding Seller and the business assets.  The representations and warranties of Seller under the purchase agreement are made as of the date of the purchase agreement and as of the closing and terminate upon the closing or upon termination of the purchase agreement.  The assertions embodied in the representations and warranties were made for the purpose of the purchase agreement and are subject to qualifications and limitations agreed to by Seller in connection with negotiating the terms of the purchase agreement.

Seller also has agreed to certain covenants, including covenants regarding the operation of the business prior to closing and covenants prohibiting Seller from soliciting or providing information or entering into discussions concerning proposals relating to alternative offers for the assets or ownership interests in Seller, except in limited circumstances to permit the Company’s board of directors to comply with its fiduciary duties or as otherwise provided in the Agreement.  Seller has agreed to a covenant not to compete with Rembrandt anywhere in the United States for a period of five years following the closing.

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Either Seller or Rembrandt can terminate the purchase agreement in certain specified instances, and the purchase agreement provides that under certain circumstances, Seller or Rembrandt may be required to pay the other party up to $500,000 upon termination.  If the closing does not occur and the Company enters into a subsequent transaction under certain conditions specified in the purchase agreement, the Company will be required to pay Rembrandt up to $4,000,000.

We will file a proxy statement and relevant materials with the SEC  in connection with the Rembrandt transaction. Our Members are urged to read the proxy statement and relevant materials upon availability as they will contain important information about the Company and the proposed transaction. The proxy statement and relevant materials (when available) and any other documents we file with the SEC may be obtained free of charge at the SEC’s website (http://www.sec.gov). In addition, our members may obtain free copies of the proxy statement and other relevant materials (when available) filed with the SEC by the Company by request to Golden Oval Eggs, LLC, Attention: Sandie Wohlman, 1800 Park Avenue East, P.O. Box 615, Renville, Minnesota 56284 or  (320)329-8182, ext301.

The Company, its directors, officers, other members of management and employees may be deemed participants in the solicitation of proxies for the proposed transaction. Information regarding the identity of each participant and a description of each participant’s direct or indirect interest in the solicitation  will be included in the proxy materials relating to the proposed transaction, when available.

PART III

Pursuant to General Instruction G (3), we omit Part III, Items 10, 11, 12, 13, and 14 and incorporates such items by reference to an amendment to this Annual Report on Form 10-K to be filed within 120 days after August 31, 2008 or to a definitive proxy statement to be filed within 120 days after August 31, 2008 with the Securities and Exchange Commission.

PART IV

Item 15.         Exhibits and Financial Statement Schedules.

(a)     The following are filed as part of this report:

1.    Financial Statements

	Form 10-K Page Reference
Report of Independent Registered Public Accounting Firm	F-1
Consolidated Balance Sheets as of August 31, 2008 and 2007	F-2
Consolidated Statements of Operations for the years ended August 31, 2008, 2007 and 2006	F-4
Consolidated Statements of Changes in Owners’ Equity for the years ended August 31, 2008, 2007 and 2006	F-5
Consolidated Statements of Cash Flows for the years ended August 31, 2008, 2007 and 2006	F-6
Notes to Consolidated Financial Statements	F-7

2.    Financial Statement Schedules

All schedules are omitted as the required information is inapplicable or the information is presented in the consolidated financial statements or related notes.

3.    Exhibits

Exhibit Number	Exhibit Description
2.1	Amended and Restated Agreement and Plan of Merger between Midwest Investors of Renville, Inc. and Golden Oval Eggs, LLC (incorporated by reference to Appendix A to the Registration Statement on Form S-4 (File No. 333-112533) (the “Form S-4”)).
3.1	Certificate of Formation of Golden Oval Eggs, LLC dated November 24, 2003 (incorporated by reference to Appendix B to the Form S-4).

30

3.2	Amended and Restated Limited Liability Company Agreement of Golden Oval Eggs, LLC adopted effective August 31, 2004 (incorporated by reference to Appendix C to the Form S-4).
3.3	Certificate of Designation for Class B Units of Golden Oval Eggs, LLC dated June 30, 2006 (incorporated by reference to Exhibit 3.3 of the Company’s Annual Report on Form 10-K for the year ended August 31, 2006 (the “2006 10-K”)).
10.1	Employment, Non-Competition and Severance Agreement dated September 1, 2004 between Dana Persson and Golden Oval Eggs, LLC (incorporated by reference to Exhibit 10.1 of the Company’s Annual Report on Form 10-K for the year ended August 31, 2005).*
10.2	Employment, Non-Competition, and Severance Agreement effective August 1, 2007 by and between Golden Oval Eggs, LLC and Thomas A. Powell (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K dated August 2, 2007).*
10.3	Employment, Non-Competition, and Severance Agreement dated May 23, 2006 by and between Golden Oval Eggs, LLC and Robert A. Harrington (incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K dated May 23, 2006).
10.4	Litter Handling Agreement dated January 1, 2002 by and between Farmers Cooperative Company and Golden Oval Eggs, LLC, successor to Midwest Investors of Renville, Inc. (incorporated by reference to Exhibit 10.5 of the Form S-4).**
10.5	Litter Handling Agreement dated March 31, 2003 between Co-op Country Farmers Elevator and Golden Oval Eggs, LLC, successor to Midwest Investors of Renville, Inc. (incorporated by reference to Exhibit 10.6 of the Form S-4).**
10.6	Pullet Production and Sale Agreement effective as of August 1, 2008 by and between Fort Recovery Equity, Inc. and Golden Oval Eggs, LLC. (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K dated September 4, 2008).**
10.7	Joint Venture Agreement between Midwest Investors of Iowa, Cooperative and Golden Oval Eggs, LLC, successor to Midwest Investors of Renville, Inc. (incorporated by reference to Exhibit 10.8 to the Form S-4).
10.8	Land Lease Agreement dated October 1, 1999 between Midwest Investors of Iowa, Cooperative and Golden Oval Eggs, LLC, successor to Midwest Investors of Renville, Inc. (incorporated by reference to Exhibit 10.9 to the Form S-4).
10.9	Asset Purchase and Sale Agreement dated as of May 23, 2006 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 GOECP, LP as Buyer (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K dated May 23, 2006).
10.10	Subordinated Promissory Note in principal amount of $17,000,000 dated June 30, 2006 made by Golden Oval Eggs, LLC, a Delaware limited liability company Midwest Investors of Iowa, Cooperative, an Iowa Cooperative, and GOECA, LP as debtors to the order of Land O’ Lakes, Inc. (incorporated by reference to Exhibit 10.10 of the 2006 10-K).
10.11	Security Agreement dated as of June 30, 2006 by Golden Oval Eggs, LLC, GOECA, LP, and Midwest Investors of Iowa, Cooperative, for the benefit of Land O’ Lakes, Inc. (incorporated by reference to Exhibit 10.11 of the 2006 10-K).
10.12	Subordination and Intercreditor Agreement dated as of June 30, 2006 made Land O’ Lakes, Inc. in favor of CoBank ACB, as agent (incorporated by reference to Exhibit 10.12 of the 2006 10-K).

31

10.13	Warrant to purchase Units of Golden Oval Eggs, LLC dated as of June 30, 2006 issued to Land O’Lakes, Inc. (incorporated by reference to Exhibit 10.13 of the 2006 10-K).
10.14	Amended and Restated Credit Agreement dated as of June 30, 2006 among Golden Oval Eggs, LLC, Midwest Investors of Iowa, Cooperative, and GOECA, LP, CoBank ACB, and Metropolitan Life Insurance Company (incorporated by reference to Exhibit 10.14 of the 2006 10-K).
10.15	First Amendment to Amended and Restated Credit Agreement effective as of April 30, 2007 by and between Golden Oval Eggs, LLC, GOECA, LP and Midwest Investors of Iowa as borrowers, the lenders signatory thereto, and CoBank, ACB as administrative agent (incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K dated April 30, 2007).
10.16	Second Amendment to Amended and Restated Credit Agreement effective as of October 19, 2007 by and between Golden Oval Eggs, LLC, GOECA, LP and Midwest Investors of Iowa as borrowers, by Metropolitan Life Insurance Company, as a bank and lender, and by CoBank, ACB as a lender and administrative agent (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K dated October 19, 2007 (the “October Form 8-K”)).
10.17	Short Term Revolving Note dated October 19, 2007 in principal amount of $2,500,000 by Golden Oval Eggs, LLC, GOECA, LP and Midwest Investors of Iowa as borrowers, and Metropolitan Life Insurance Company and CoBank, ACB as lenders (incorporated by reference to Exhibit 10.2 to the October Form 8-K).
10.18	Amended and Restated Swing Line Note dated October 19, 2007 in principal amount of $2,000,000 by Golden Oval Eggs, LLC, GOECA, LP and Midwest Investors of Iowa as borrowers and CoBank ACB as lender (incorporated by reference to Exhibit 10.3 to the October Form 8-K).
10.19	Amended and Restated Revolving Note dated October 19, 2007 in the principal amount of $13,000,000 by Golden Oval Eggs, LLC, GOECA, LP and Midwest Investors of Iowa as borrowers, and CoBank, ACB as lender (incorporated by reference to Exhibit 10.4 to the October Form 8-K).
10.20	Purchase and Sale Agreement dated December  15, 2008 by and between Golden Oval Eggs, LLC, GOE CA, L.P., Midwest Investors of Iowa, Cooperative and Rembrandt Enterprises, Inc.
10.21	Extension Agreement dated December 13, 2007 to the Second Amendment to the Amended and Restated Credit Agreement effective as of October 19, 2007 by and between Golden Oval Eggs, LLC, GOECA, LP and Midwest Investors of Iowa as borrowers, by Metropolitan Life Insurance Company, as a bank and lender, and by CoBank, ACB as a lender and administrative agent (incorporated by reference to Exhibit 10.3 to the Company’s report on Form 10-Q filed April 14, 2008).
10.22	Extension and Amendment Agreement dated March 11, 2008 to the Second Amendment to the Amended and Restated Credit Agreement effective as of October 19, 2007 by and between Golden Oval Eggs, LLC, GOECA, LP and Midwest Investors of Iowa as borrowers, by Metropolitan Life Insurance Company, as a bank and lender, and by CoBank, ACB as a lender and administrative agent (incorporated by reference to Exhibit 10.4 to the Company’s report on Form 10-Q filed April 14, 2008).
10.23	Third Amendment to Amended and Restated Credit Agreement dated August 29, 2008 by and between Golden Oval Eggs, LLC, GOECA, LP and Midwest Investors of Iowa as borrowers, by the banks and other financial institutions or entities that are signatories as lenders, and CoBank, ACB as a lender and administrative agent (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed September 4, 2008.)
21.1	Subsidiaries of Golden Oval Eggs, LLC, the registrant.
23.1	Consent of Moore Stephens Frost PLC.
31.1	Certification of Chief Executive Officer pursuant to Rule13a-14(a) or 15d-14(a).
31.2	Certification of Chief Financial Officer pursuant to Rule 13a-14(a) or 15d-14(a).
32.1	Certification Pursuant to 18 U.S.C. Section 1350.

*Indicates management contract or compensatory plan, contract or arrangement

**Portions of the exhibit have been omitted and filed separately with the Securities and Exchange Commission pursuant to a request for confidential treatment under Rule 406 of the Securities Act of 1933, as amended.

32

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, Golden Oval Eggs, LLC has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized on December 23, 2008.

GOLDEN OVAL EGGS, LLC
By:	/s/ Dana Persson
Dana Persson, President and Chief Executive Officer
By:	/s/ Thomas A. Powell
Thomas A. Powell, Chief Financial Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this Annual Report on Form 10-K has been signed by the following persons on December 23, 2008 on behalf of Golden Oval Eggs, LLC in the capacities indicated.  Each person whose signature appears below constitutes and appoints Dana Persson and Thomas A. Powell as his true and lawful attorneys-in-fact and agents, each acting alone, with the full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities, to sign any or all amendments to this Annual Report on Form 10-K and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, each acting alone, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all said attorneys-in-fact and agents, each acting alone, or his substitute or substitutes, may lawfully do or cause to be done by virtue thereof.

/s/ Dana Persson	President and Chief Executive Officer
Dana Persson	(principal executive officer)
/s/ Thomas A. Powell	Chief Financial Officer
Thomas A. Powell	(principal financial and accounting officer)
/s/ Chris Edgington	Chairman
Chris Edgington
/s/ Howard Dahlager	Vice Chairman
Howard Dahlager
/s/ Paul Wilson	Secretary
Paul Wilson
/s/ Marvin Breitkreutz	Manager
Marvin Breitkreutz
/s/ Mark Chan	Manager
Mark Chan
/s/ Loren Norgaard	Manager
Loren Norgaard

33

GOLDEN OVAL EGGS, LLC

August 31, 2008, 2007 and 2006

Consolidated Financial Statements

With

Report of Independent Registered Public Accounting Firm

Report of Independent Registered Public Accounting Firm

Members and Board of Managers

Golden Oval Eggs, LLC

Renville, Minnesota

We have audited the accompanying consolidated balance sheets of Golden Oval Eggs, LLC as of August 31, 2008 and 2007, and the related consolidated statements of operations, changes in owners’ equity and cash flows for each of the three years in the period ended August 31, 2008.  These consolidated financial statements are the responsibility of the Company’s management.  Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States).  Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement.  An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated financial statements.  An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall consolidated financial statement presentation.  We believe our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of Golden Oval Eggs, LLC as of August 31, 2008 and 2007, and the consolidated results of its operations and its cash flows for each of the three years in the period ended August 31, 2008 in conformity with accounting principles generally accepted in the United States of America.

As discussed in Note 16 to the consolidated financial statements, on December 15, 2008, the Company entered into a definitive agreement to sell essentially all of its operations.  This agreement is subject to regulatory and shareholder approval.  As discussed in Note 7 to the consolidated financial statements, certain provisions of credit agreements require a majority of the long-term debt to be repaid within the next 12 months.  Management anticipates the proceeds from the sale of operations will be the source of funds for this repayment.

/s/ Moore Stephens Frost

Certified Public Accountants

Little Rock, Arkansas

December 15, 2008

F-1

GOLDEN OVAL EGGS, LLC

Consolidated Balance Sheets

August 31, 2008, 2007 and 2006

(In Thousands)

	2008			2007
Assets
Current assets
Cash and cash equivalents	$	4,289		$	—
Accounts receivable	15,861			18,502
Inventories	21,783			18,352
Restricted cash	2,212			783
Other current assets	1,229			1,047
Total current assets	45,374			38,684
Property, plant and equipment
Land and land improvements	11,649			11,649
Buildings	40,279			40,684
Leasehold improvements	943			896
Equipment	72,275			71,906
Construction in progress	317			173
	125,463			125,308
Accumulated depreciation	(67,674		)	(57,103		)
Total property, plant and equipment, net	57,789			68,205
Other assets
Investments	1,733			1,670
Intangibles, net	13,962			18,826
Goodwill	22,858			22,858
Note receivable	248			135
Total other assets	38,801			43,489
Total assets	$	141,964		$	150,378

F-2

	2008		2007
Liabilities and Owners’ Equity
Current liabilities
Revolving line of credit	$	16,261	$	11,884
Accounts payable	9,531		14,221
Accrued interest	500		2,988
Accrued compensation	3,005		1,824
Other current liabilities	2,720		2,595
Current maturities of long-term debt	67,526		9,522
Total current liabilities	99,543		43,034
Long-term debt, less current maturities	6,420		84,727
Commitments and contingencies - See Notes 6, 7 and 12
Owners’ equity
Members’ equity	34,852		21,612
Noncontrolling interest in consolidated entities	1,149		1,005
Total owners’ equity	36,001		22,617
Total liabilities and owners’ equity	$	141,964	$	150,378

The accompanying notes are an integral part of these consolidated financial statements.

F-3

GOLDEN OVAL EGGS, LLC

Consolidated Statements of Operations

For the Years Ended August 31, 2008, 2007 and 2006

(In Thousands, except per unit data)

	2008			2007			2006
Net sales	$	218,046		$	198,277		$	93,638
Cost of goods sold	195,111			183,367			79,851
Gross profit	22,935			14,910			13,787
Operating expenses	22,036			20,919			9,734
Income (loss) from operations	899			(6,009		)	4,053
Other income (expense)
Interest expense	(8,862		)	(10,026		)	(3,835		)
Noncontrolling interest in income (loss) of consolidated entities	(97		)	(16		)	42
Other income	927			878			805
Gain on forgiveness of debt	17,000			—			—
Total other income (expense)	8,968			(9,164		)	(2,988		)
Income (loss) before income taxes	9,867			(15,173		)	1,065
Income tax expense	8			—			2
Net income (loss)	$	9,859		$	(15,173	)	$	1,063
Basic net income (loss) per members’ unit	$	1.82		$	(2.80	)	$	0.22
Diluted net income (loss) per members’ unit	$	1.67		$	(2.80	)	$	0.22
Distributions per members’ unit	$	—		$	—		$	—

The accompanying notes are an integral part of these consolidated financial statements.

F-4

GOLDEN OVAL EGGS, LLC

Consolidated Statements of Changes in Owners’ Equity

For the Years Ended August 31, 2008, 2007 and 2006

(In Thousands)

							Noncontrolling
	Common Stock						Interest in			Total
	Class A	Class B		Members’			Consolidated			Owners’
	Units	Units		Equity			Entities			Equity
Balance - September 1, 2005	4,582	—		$	29,891		$	985		$	30,876
Units issued	121	697		5,747			—			5,747
Net income	—	—		1,063			—			1,063
Noncontrolling interest in income (loss) of consolidated entities, net of distributions	—	—		—			(112		)	(112		)
Balance - August 31, 2006	4,703	697		36,701			873			37,574
Units issued	31	—		84			—			84
Net loss	—	—		(15,173		)	—			(15,173		)
Noncontrolling interest in income of consolidated entities, net of distributions	—	—		—			132			132
Balance - August 31, 2007	4,734	697		21,612			1,005			22,617
Units issued	69	—		139			—			139
Conversion of Class B Units to Class A Units	697	(697	)	—			—			—
Issuance of warrant for forgiveness of subordinated note accrued interest	—	—		3,242			—			3,242
Net income	—	—		9,859			—			9,859
Noncontrolling interest in income of consolidated entities, net of distributions	—	—		—			144			144
Balance - August 31, 2008	5,500	—		$	34,852		$	1,149		$	36,001

The accompanying notes are an integral part of these consolidated financial statements.

F-5

GOLDEN OVAL EGGS, LLC

Consolidated Statements of Cash Flows

For the Years Ended August 31, 2008, 2007 and 2006

(In Thousands)

	2008			2007			2006
Cash flows from operating activities
Net income (loss)	$	9,859		$	(15,173	)	$	1,063
Adjustments to reconcile net income (loss) to net cash provided by operating activities
Depreciation	10,204			11,593			8,083
Amortization	1,701			1,898			498
Asset impairment	3,711			1,338			—
Stock issued as Executive compensation	117			196			—
Stock issued as Board of Directors compensation	22			31			14
SFAS No. 123R adjustment	—			(143		)	—
Gain on disposal of property, plant and equipment	(7		)	(39		)	(9		)
Gain on forgiveness of debt	(17,000		)	—			—
Noncontrolling interest in income (loss) of consolidated entities, net of distributions	144			132			(112		)
Changes in operating assets and liabilities, net of effects of adoption of FIN-46R
Accounts receivable	2,641			(3,648		)	(10,045		)
Inventories	(3,431		)	(2,347		)	(4,816		)
Other current assets	(182		)	29			(689		)
Accounts payable	(4,690		)	6,556			4,835
Accruals and other current liabilities	2,060			2,233			2,606
Net cash provided by operating activities	5,149			2,656			1,428
Cash flows from investing activities
Purchases of property, plant and equipment	(336		)	(1,406		)	(2,612		)
Acquisition of Moark, LLC assets	—			—			(35,703		)
Proceeds from sale of property, plant and equipment	7			138			33
Advance of note receivable	(113		)	(58		)	(40		)
Purchases of investments in other cooperatives	(63		)	5			(59		)
Retirement of investment in other cooperatives	—			(99		)	12
Net cash used by investing activities	(505		)	(1,420		)	(38,369		)
Cash flows from financing activities
Net increase in revolving line of credit	$	4,377		$	8,015		$	1,145
Proceeds from issuance of long-term debt	—			—			41,000
Payments of long-term debt	(3,303		)	(9,469		)	(5,496		)
Payment of deferred financing costs	—			—			(314		)
Restricted cash	(1,429		)	(4		)	138
Net cash provided (used) by financing activities	(355		)	(1,458		)	36,473
Net increase (decrease) in cash and cash equivalents	4,289			(222		)	(468		)
Cash and cash equivalents - beginning of year	—			222			690
Cash and cash equivalents - end of year	$	4,289		$	—		$	222
Supplementary disclosures of cash flow information
Cash paid during the year for Interest, net of capitalized interest, of $226, $174 and $171 during 2008, 2007 and 2006, respectively	$	7,260		$	10,015		$	3,664
Income taxes	8			—			2
Supplementary disclosures of non-cash transactions
Goodwill purchased with Class B Units	$	—		$	—		$	5,000
Long-term debt issued for acquisition	—			—			17,000
Issuance of warrants for accrued interest	3,242			—			—

The accompanying notes are an integral part of these consolidated financial statements.

F-6

GOLDEN OVAL EGGS, LLC

Notes to Consolidated Financial Statements

August 31, 2008, 2007 and 2006

(In Thousands, except unit data)

1.Summary of Significant Accounting Policies

a.Organization – Golden Oval Eggs, LLC (the “Company”) was organized as a Delaware limited liability company to affect the reorganization of Midwest Investors of Renville, Inc. (“MIR”) effective August 31, 2004.  MIR was incorporated as a cooperative under the laws of the state of Minnesota in March 1994.  Upon conversion, MIR patrons’ equity, including common stock, additional paid-in capital, qualified written notices of allocation and unallocated capital reserve were converted into members’ equity of the Company.

b.Principles of consolidation – The consolidated financial statements include the accounts of the Company and its wholly owned subsidiary GOECA, LP, the accounts of AEI, LLC of which the Company holds a 68% membership interest at August 31, 2008 and the accounts of variable interest entities in which the Company is the primary beneficiary.  The Company holds a 33 1/3% membership interest and is also a purchaser of feed produced by United Mills a Minnesota cooperative and Midwest Investors of Iowa, Inc. a lessor of property to the Company.  The Company investments of 20% to 50% owned entities that are not variable interest entities in which the Company is the primary beneficiary are accounted for using the equity method.  The Company investments in less than 20% owned entities that are not variable interest entities in which the Company is the primary beneficiary and in which the Company does not exercise significant influence over operating and financial policies are accounted for under the cost method.  All material intercompany accounts and transactions have been eliminated in the consolidated financial statements.

c.Business operations and environment – The Company is an integrated poultry and liquid egg processing operation that produces and sells liquid and processed egg products, principally in the United States and Canada.  The Company operates as one reportable segment in accordance with Statement of Financial Accounting Standards (“SFAS”) No. 131, “Disclosures about Segments of an Enterprise and Related Information,” which establishes standards for the way that public business enterprises report information about operating segments in annual consolidated financial statements.

The Company operates in an environment wherein the commodity nature of both its products for sale and its primary raw materials cause sales prices and purchase costs to fluctuate, often on a short-term basis, due to the worldwide supply and demand situation for those commodities.  The supply and demand factors for its products for sale and the supply and demand factors for its primary raw materials correlate to a degree, but are not the same, thereby causing margins between sales price and production costs to increase, decrease, or invert, often on a short-term basis.

d.Cash equivalents – The Company considers all highly liquid cash investments purchased with an original maturity of three months or less to be cash and cash equivalents.

F-7

GOLDEN OVAL EGGS, LLC

Notes to Consolidated Financial Statements

August 31, 2008, 2007 and 2006

(In Thousands, except unit data)

1.Summary of Significant Accounting Policies (cont.)

e.Accounts receivable – Accounts receivable are recorded at the invoiced amount and do not bear interest.  The Company reviews its customer accounts on a periodic basis and records a reserve for specific amounts that the Company feels may not be collected.  The Company’s management deems accounts receivable to be past due based on contractual terms.  Amounts will be written off at the point when collection attempts on the accounts have been exhausted.  Management uses significant judgment in estimating uncollectible amounts.  In estimating uncollectible amounts, management considers factors such as current overall economic conditions, industry-specific economic conditions, historical customer performance and anticipated customer performance.  While management believes the Company’s processes effectively address its exposure to doubtful accounts, changes in the economic, industry or specific customer conditions may require adjustment to any allowance recorded by the Company.  As of August 31, 2008 and 2007, management has determined that an allowance of $671 and $199, respectively, is required due to the changing nature of the customer base.

f.Inventories – Pullet and layer hen inventories are stated at the cost of production which includes the costs of the chicks, feed, overhead and labor.  Layer hen flock costs are capitalized to the point at which the pullet goes into production and are amortized over the productive lives of the flocks, generally 18 to 24 months.  Feed, supplies, ingredients, liquid egg inventories and processed egg products are stated at the lower of cost (first-in, first-out) or market.

g.Property, plant and equipment – Property, plant, leasehold improvements, and equipment are stated at cost and depreciation is provided primarily by the straight-line method over the following lives:

Land improvements	7 to 15 years
Buildings	7 to 39 years
Leasehold improvements	1 to 3 years
Equipment	3 to 15 years

Costs of maintenance and repairs that do not improve or extend asset lives are expensed as incurred.  Major additions and improvements of existing facilities are capitalized.  For retirements or sales of property, the Company removes the original cost and the related accumulated depreciation from the accounts and the resulting gain or loss is reflected in other income in the accompanying consolidated statements of operations.  Depreciation and repairs and maintenance expenses are allocated to either cost of goods sold or operating expenses in the accompanying consolidated statements of operations based on the nature and use of the related asset.

h.Impairment of long-lived assets to be held and used – The Company reviews the carrying value of long-lived assets for impairment whenever certain triggering events or changes in circumstances indicate that the carrying amounts of any asset may not be recoverable.  Recoverability of assets to be held and used is measured by a comparison to the carrying amount of an asset to future net cash flows expected to be generated by the asset.  If such assets are considered to be impaired, the impairment to be recognized is measured by the excess of the carrying amount over the fair value of the assets.

F-8

GOLDEN OVAL EGGS, LLC

Notes to Consolidated Financial Statements

August 31, 2008, 2007 and 2006

(In Thousands, except unit data)

1.Summary of Significant Accounting Policies (cont.)

i.Investments – Investments include the Company’s investments in CoBank and four additional cooperatives involved in activities which are similar or complementary to the Company.  Additionally, fiscal years 2008, 2007 and 2006 include United Mills’ investment in Land O’Lakes, Inc. (“LOL”) and five additional cooperatives involved in activities which are similar or complementary to United Mills.

j.Restricted cash – Restricted cash consists of cash that is restricted as to future use by contractual agreements associated with the outstanding bonds, an interest rate collar agreement, and an escrow account for the Thompson facility waste water improvements.  See Note 7 for further discussion of the interest rate collar agreement and Note 12 on the waste water escrow.

k.Intangible assets – Intangibles include patents, brand names, contractual license agreements and costs incurred in connection with the acquisition of financing.  Financing costs are capitalized and amortized over the life of the related financing instrument.  Patents, brand names and licenses are valued based upon net present value of the projected cash flow streams for each within determinable time frames, based upon brand name life (15 years), contractual license agreement terms (10 years) or remaining patent life (11.3 years).  Intangibles are shown net of accumulated amortization on the accompanying consolidated balance sheets.

l.Goodwill – Goodwill represents the excess purchase price over the fair value of net assets acquired in the acquisition of certain assets from Moark, LLC and its subsidiaries, Cutler at Abbeville, L.L.C., Hi Point Industries, LLC, L&W Egg Products, Inc., Norco Ranch, Inc. and Moark Egg Corporation (the “Moark Acquisition”) on June 30, 2006.  The Company accounts for goodwill in accordance with the provisions of SFAS No. 142, “Goodwill and Other Intangible Assets,” and tests goodwill for impairment on an annual basis or earlier, if facts and circumstances indicate that there may be a potential impairment.  As of August 31, 2008, the Company concluded the fair value of the single entity reporting unit exceeded the carrying value of the reporting unit based on the pending sale of substantially all operations (Note 16).

m.Derivative financial instruments – The Company entered into an interest rate collar agreement to manage its exposure to fluctuations in interest rates.  The Company has accounted for this agreement in accordance with SFAS No. 133, “Accounting for Derivative Instruments and Hedging” (as amended by SFAS No. 138, “Accounting for Certain Derivative Instruments and Certain Hedging Activity” and SFAS No. 149, “Amendment of SFAS No. 133 on Derivative Instruments and Hedging Activities”).  Interest rate swap contracts are reported at fair value with the gain or loss on market value recorded as an increase or reduction of interest expense.  At August 31, 2008, no interest rate swap agreements are designated as hedges.

n.Income taxes – The Company and AEI, LLC are limited liability companies and as such, are treated as partnerships for income tax purposes.  Accordingly, the taxable income or loss of these entities is reported on the individual income tax returns of their members.  No provision for income taxes or deferred income tax liability related to these entities is included in the accompanying consolidated financial statements.

F-9

GOLDEN OVAL EGGS, LLC

Notes to Consolidated Financial Statements

August 31, 2008, 2007 and 2006

(In Thousands, except unit data)

1.Summary of Significant Accounting Policies (cont.)

United Mills, Midwest Investors of Iowa, Inc. and MIR (prior to its conversion to a LLC) are subject to federal and certain other income taxes and operate as cooperatives that qualify for tax treatment under Subchapter T of the Internal Revenue Code.  Accordingly, under specific conditions, these entities can exclude from taxable income amounts distributed as qualified patronage refunds to their members.  Provisions for income taxes are recorded only on those earnings not distributed or not expected to be distributed as patronage refunds.  For the years ended August 31, 2008 and 2006, income tax provision of $8 and $2 were recorded.  No provision for income taxes was recorded for the year ending August 31, 2007.

o.Fair value – The Company’s financial instruments consist primarily of cash equivalents, accounts receivable, accounts payable and debt.  The carrying amounts of cash equivalents, accounts receivable and accounts payable approximate their fair values because of the short-term maturity of such instruments.  The carrying values of long-term debt instruments approximate their fair value because interest rates on such debt are periodically adjusted and approximate current market rates.

p.Revenue recognition – Revenue is recognized by the Company when the following criteria are met: persuasive evidence of an agreement exists; delivery has occurred (Free-on-Board (“FOB”) shipping point or destination, depending on the customer) or services have been rendered; the Company’s price to the buyer is fixed and determinable; and collectibility is reasonably assured.  All of the Company’s products are delivered directly to its customers.  The Company receives orders for all sales and mails invoices on shipment.  Physical delivery is the point in time at which revenue is considered earned since the risks and rewards of ownership generally rest when title passes to the customer.  FOB terms generally designate at which point title passes to the customer.  These terms are contractual between the parties involved.  Product shipped FOB shipping point is recognized as revenue when the product leaves the Company’s premises.  Product shipped FOB destination is recognized as revenue when the product reaches the customer.  At the time of shipment, all prices are fixed and all sales are made on the basis that collection is expected in line with the Company’s standard payment terms.

q.Estimates – The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period.  Actual results could differ from those estimates.

r.Shipping and handling costs – All shipping and handling costs incurred during the year are included in cost of goods sold in the accompanying consolidated statements of operations.

F-10

GOLDEN OVAL EGGS, LLC

Notes to Consolidated Financial Statements

August 31, 2008, 2007 and 2006

(In Thousands, except unit data)

1.Summary of Significant Accounting Policies (cont.)

s.Stock-based compensation – In December 2004, the Financial Accounting Standards Board (“FASB”) issued SFAS No. 123 (revised 2004) (“SFAS No.123(R)”), “Share-Based Payment,” which is a revision of SFAS No. 123, “Accounting for Stock-Based Compensation.”  SFAS No. 123(R) supersedes Accounting Principles Board (“APB”) Opinion No. 25, “Accounting for Stock Issued to Employees,” and amends SFAS No. 95, “Statement of Cash Flows.”  SFAS No. 123(R) requires all share-based payments to employees, including grants of employee stock options, restricted stock and performance-based shares to be recognized in the income statement based on their fair values.  SFAS No. 123(R) also requires the benefits of tax deductions in excess of recognized compensation cost to be reported as a financing cash flow, rather than as an operating cash flow as required under current literature.  This requirement will reduce net operating cash flows and increase net financing cash flows in periods after adoption.  In the first quarter of fiscal 2007, the Company adopted SFAS No. 123(R).  The adoption did not result in a material impact to operations of the Company.

t.Recently issued accounting standards – In September 2006, the FASB issued SFAS No. 157, “Fair Value Measurements.”  SFAS No. 157 establishes a single authoritative definition of fair value, sets out a framework for measuring fair value, and expands on required disclosures about fair value measurement.  SFAS No. 157 is effective for the Company on September 1, 2008 and will be applied prospectively.  Management does not believe the adoption of SFAS No. 157 will have a significant impact on its consolidated financial statements.

In February 2007, the FASB issued SFAS No. 159, “Establishing the Fair Value Option for Financial Assets and Liabilities,” to permit all entities to choose to elect to measure eligible financial instruments at fair value.  SFAS No. 159 applies to fiscal years beginning after November 15, 2007 with early adoption permitted for an entity that has also elected to apply the provisions of SFAS No. 157, “Fair Value Measurements.”  An entity is prohibited from retrospectively applying SFAS No. 159, unless it chooses early adoption.  Management does not believe the adoption of SFAS No. 159 will have a significant impact on its consolidated financial statements.

In December 2007, the FASB issued SFAS No. 160, “Noncontrolling Interests in Consolidated Financial Statements.”  SFAS No. 160 establishes accounting and reporting standards for the noncontrolling interest in a subsidiary and for the deconsolidation of a subsidiary.  The effective date of SFAS No. 160 is for fiscal years beginning on or after December 15, 2008.  The Company is reviewing SFAS No. 160 to determine what impact it may have to the consolidated financial statements.

In March 2008, the FASB issued SFAS No. 161, “Disclosures about Derivative Instruments and Hedging Activities, an Amendment to SFAS No. 133.”  SFAS No. 161 establishes the disclosure requirements for derivative instruments and hedging activities and expands the disclosure requirements of SFAS No. 133.  The effective date for financial statements issued for fiscal years and interim periods beginning after November 15, 2008.  The Company is reviewing SFAS No. 161, but anticipates very little impact to the Company.

F-11

GOLDEN OVAL EGGS, LLC

Notes to Consolidated Financial Statements

August 31, 2008, 2007 and 2006

(In Thousands, except unit data)

1.Summary of Significant Accounting Policies (cont.)

The FASB issued two new statements in May 2008, SFAS No. 162, “The Hierarchy of Generally Accepted Accounting Principles” and SFAS No. 163, “Accounting for Financial Guaranty Insurance Contract, an interpretation of SFAS No. 60.” SFAS No. 162 identifies sources of accounting principles and establishes a hierarchy of accounting principles to be used in preparation of financial statements in conformity with generally accepted accounting principles for non governmental entities.  SFAS No. 162 is effective 60 days following Securities and Exchange Commission (“SEC”) approval of Public Company Accounting Oversight Board (“PCAOB”) amendments to AU section 411.  The Company does not anticipate any impact with the enactment of SFAS No. 162.  SFAS No. 163 clarifies the recognition and measurement of claim liabilities in an insured financial obligation by insurance enterprises.  SFAS No. 163 is not applicable to the Company.

2.Transactions with Moark, LLC

On June 30, 2006, the Company and its wholly-owned subsidiary, GOECA, LP, purchased from Moark, LLC and its subsidiaries, Cutler at Abbeville, L.L.C., Hi Point Industries, LLC, L&W Egg Products, Inc., Norco Ranch, Inc. and Moark Egg Corporation (collectively, the “Seller”) certain assets relating to the business of manufacturing, marketing, selling and distribution of egg products.  Moark, LLC is a subsidiary of LOL.  GOECA, LP is a newly-formed Delaware limited partnership controlled by the Company that will continue operations of the acquired California business.  The purchase was pursuant to an asset purchase agreement dated May 23, 2006.

In connection with the closing, the Company paid the Seller the total purchase price of $60,000 consisting of $38,000 in cash (of which $1,500 was paid as an earnest money deposit in connection with the execution of the asset purchase agreement), an additional $17,000 paid in the form of a subordinated promissory note bearing interest at a rate of 12% per year (the “Note”) issued to LOL and $5,000 paid by issuance of 697,350 Class B Units.  Transaction costs of $1,097 were funded by current operations and were capitalized as a part of the allocated purchase price.  The Company allocated the purchase price based upon the fair value of the assets acquired as follows:

Land	$	55
Building	1,850
Leasehold improvements	861
Equipment	12,944
Inventory	3,394
Intangibles	19,135
Goodwill	22,858
	$	61,097

F-12

GOLDEN OVAL EGGS, LLC

Notes to Consolidated Financial Statements

August 31, 2008, 2007 and 2006

(In Thousands, except unit data)

2.Transactions with Moark, LLC (cont.)

On June 30, 2007, two major egg supply contracts at the Millersburg, Ohio facility expired and the Company has been unable to secure replacement suppliers.  As a result of the two major supply contracts expiring, the Millersburg facility had a significant decrease in production volume.  The resultant future cash flows for the Millersburg facility are less than the carrying value of its assets resulting in an impairment charge of $1,338 as of August 31, 2007, which is included in cost of goods sold in the consolidated statements of operations.

On February 15, 2008, the note described above was forgiven in its entirety.  Any interest accrued on the note was converted to a warrant for 880,492 shares.  The 697,350 Class B Units were converted to 697, 350 Class A Units.  See Note 8.a.  During 2008, impairment charges were incurred amounting to $3,711 ($3,163 for a license described in Note 5 and $548 for impairment of fixed assets at Vernon and Abbeville, which is discussed below).

On February 29, 2008, the Vernon, California facility ceased manufacturing operations.  All California manufacturing was consolidated to the Norco, California facility and the Vernon facility has been converted to a warehouse facility.  All breaking of eggs at the Abbeville, Alabama facility ceased as of February 29, 2008, due to reduction in egg supply and uncompetitive costs of manufacturing.  An impairment charge of $366 was taken on this facility during 2008.  Total impairment charges were $548 and $1,338 as of August 31, 2008 and 2007, respectively.

3.Variable Interest Entities

FASB Interpretation No. 46R (Revised December 2003), “Consolidation of Variable Interest Entities (“FIN-46R”),” requires that if an enterprise is the primary beneficiary of a variable interest entity, the assets, liabilities and results of operations of the variable interest entity should be included in the consolidated financial statements of the enterprise.  The Company holds various investments or variable interests, that for purposes of FIN-46R, were evaluated and the Company determined that it was the primary beneficiary.  As such, the financial statements of these entities were consolidated in the accompanying consolidated financial statements.  Creditors of the variable interest entities lack recourse to the general assets of the Company as the primary beneficiary.

The Company leases land from Midwest Investors of Iowa, Inc., which it controls.  The Company has determined that it is the primary beneficiary and the lessor is a variable interest entity.  Under FIN-46R, the lessor is required to be consolidated in the Company’s consolidated financial statements as of September 1, 2003.  The land, which totals $1,002 and is collateral for the related obligation, has been recorded as an asset in the Company’s consolidated balance sheets and the outstanding debt has been recorded as a liability.  The Company had recorded a note receivable of $950 from Midwest Investors of Iowa, Inc. which was secured by this land.  The note due in October 2014, bears interest at 8% and is payable in monthly installments, including interest.  As a result of the FIN-46R implementation and the consolidation of Midwest Investors of Iowa, Inc., the note receivable was eliminated.

F-13

GOLDEN OVAL EGGS, LLC

Notes to Consolidated Financial Statements

August 31, 2008, 2007 and 2006

(In Thousands, except unit data)

3.     Variable Interest Entities (cont.)

Additionally, the Company owns a 33 1/3% interest in United Mills, a Minnesota cooperative, from which it also purchases feed.  The Company has evaluated its equity investment in United Mills and has determined that United Mills is a variable interest entity under FIN-46R.  The Company has concluded that it is the primary beneficiary as defined by FIN-46R and as a result, the Company is required to consolidate United Mills on September 1, 2003.  FIN-46R requires that the Company account for United Mills as if it had been consolidated since the initial investment in 1995.  A total of $3,312 and $1,998 of assets of United Mills recorded in the consolidated balance sheets as of August 31, 2008 and 2007, respectively, serve as collateral for the obligations of the variable interest entity.

The Company’s investment in United Mills was accounted for using the equity method for the year ended August 31, 2003.  Since United Mills is a cooperative, the income and capital reserves are allocated to the member-patrons on the basis of patronage the Company has with the cooperative, which was 50.0% for the year ended August 31, 2003.  United Mills maintains a revolving capital account, funded by its patrons.  The principal source of this capital account is the contribution, on a monthly basis, of $3.00 per ton of feed purchased.  Revolving capital credits may be retired at any time at the discretion of the Board of Directors of United Mills.  United Mills has historically followed a policy of retiring capital credits on a monthly basis at the rate of $3.00 per ton of feed purchased during the corresponding month two years prior.  These payments to and from United Mills are reflected as purchase of and retirement of investment in United Mills, respectively, in the accompanying consolidated statements of cash flows.

United Mills reported the following financial results for fiscal year ending August 31, 2008:

Sales	$	27,925
Gross profit	114
Net income	178

4.     Inventories

Inventories consist of the following:

	2008		2007
Hens and pullets	$	14,024	$	10,766
Eggs and egg products	3,987		4,046
Feed, supplies and other	3,772		3,540
Total inventories	$	21,783	$	18,352

F-14

GOLDEN OVAL EGGS, LLC

Notes to Consolidated Financial Statements

August 31, 2008, 2007 and 2006

(In Thousands, except unit data)

5.     Intangible Assets, Net

Intangible assets, net, consist of the following:

	2008		2007
Net patent cost ($11,299 less amortization $2,160)	$	9,139	$	10,137
Net brand name cost ($4,040 less amortization $583)	3,457		3,725
Net license cost (terminated February 29, 2008)	—		3,355
Net deferred financing costs ($2,679 less amortization $1,313)	1,366		1,609
Net intangibles	$	13,962	$	18,826

As discussed in Notes 6 and 7, the Company obtained new financing with a financial institution in the fourth quarter of fiscal year 2006.  In conjunction with this refinancing, the Company capitalized financing costs incurred in the amount of $314, which is being amortized over the term of the loan.  The amendment to the asset purchase agreement, effective February 15, 2008 terminated the licensing agreement between the Company and LOL.  The termination of the license agreement resulted in an impairment charge of $3,163 that is presented as an operating expense on the consolidated statements of operations.

The amortization periods for these intangible costs range from 7 to 15 years with a weighted-average amortization period of approximately 12 years.  The future amortization expense is as follows:

2009	$	1,488
2010	1,488
2011	1,488
2012	1,488
2013	1,488
Thereafter	6,522
	$	13,962

F-15

GOLDEN OVAL EGGS, LLC

Notes to Consolidated Financial Statements

August 31, 2008, 2007 and 2006

(In Thousands, except unit data)

6.     Revolving Line of Credit

On June 30, 2006, the Company amended the revolving short-term line of credit with a maximum indebtedness of the lesser of $15,000 or the limit established by the borrowing base computation with a variable interest rate (6.5% at August 31, 2008).  Effective October 19, 2007, the Second Amendment to the Amended and Restated Credit Agreement added an additional short term revolving note in the amount of $2,500 with a maturity date of December 14, 2007.  The maximum indebtedness was increased to $17,500 or the limit established by the borrowing base computation. There was no change in the variable interest rate.   The balance at August 31, 2008 and 2007 was $16,261 and $11,884, respectively.  Credit line availability as of August 31, 2008 was approximately $1,239.  The weighted-average interest rates for these borrowings were 7.83% and 9.75% for the years ending August 31, 2008 and 2007, respectively, based on average amount outstanding.  The average amount outstanding on the line of credit was $13,884 and $9,245 with a maximum outstanding month end balance of $16,261 and $12,163 for the years ending August 31, 2008 and 2007, respectively.  There is a quarterly nonuse fee at the rate of one quarter of one percent on the daily average unused amount on the line of credit.  The line of credit may be withdrawn immediately upon matured default as defined in the note agreement.  The Third Amendment to the Amended and Restated Credit Agreement extended the revolving notes maturity date to November 1, 2009.

However, due to certain benchmark requirements in the restated agreement, the Company has classified this line of credit as a current obligation in accordance with Emerging Issues Task Force (“EITF”) D-23, “Subjective Acceleration Clauses and Debt Classification.”  See Note 7.

7.     Long-Term Debt and Derivative Instruments

Long-term debt and derivative instruments consist of the following:

	2008		2007
Note payable to a bank; variable interest rate, currently at 6.75% as of August 31, 2008, paid monthly, principal paid in equal monthly payments of $317 starting in July 2006 through June 2015; secured by all assets of the Company.	$	32,611	$	33,562
Note payable to a bank; bearing interest at 6.2%; interest paid monthly, principal paid in equal monthly payments of $183 through September 2014; secured by substantially all land, buildings and equipment of the Thompson, Iowa facility, with a net book value of $52,763.	15,033		15,584

F-16

GOLDEN OVAL EGGS, LLC

Notes to Consolidated Financial Statements

August 31, 2008, 2007 and 2006

(In Thousands, except unit data)

7.     Long-Term Debt and Derivative Instruments (cont.)

	2008		2007
Note payable to a bank; bearing interest at 6.9%; interest paid monthly, principal paid in equal monthly payments of $83 starting in January 2006 through December 2015; secured by substantially all land, buildings and equipment of the Thompson, Iowa facility, with a net book value of $52,763.	$	8,083	$	8,333
Note payable to a bank; variable interest rate, currently at 6.75% as of August 31, 2008, paid monthly, principal paid in equal monthly payments of $83 starting in January 2006 through December 2015; secured by substantially all land, buildings and equipment of the Thompson, Iowa facility, with a net book value of $52,763.	8,083		8,333
Corporate bonds, series 1999, bearing interest at 8.44%; interest payable semiannually, principal payments due in annual installments from 2001 to July 2014 in amounts ranging from $432 to $1,240; secured by substantially all land, buildings and equipment of the Renville, Minnesota facility, amounting to a net book value of $7,346.	6,135		6,897
Note payable to a bank; variable interest rate, currently at 6.3% as of August 31, 2008, paid monthly, principal paid in equal monthly payments of $25 starting in January 2006 through December 2015; secured by substantially all land, buildings and equipment of the Thompson, Iowa facility, with a net book value of $52,763.	2,425		2,500
Corporate bonds, series 2001, bearing interest at 8.75%; interest payable semiannually, principal payments in equal annual installments of $300 from 2002 to January 2011; secured by substantially all land, buildings and equipment of the Renville, Minnesota facility, amounting to a net book value of $7,346.	900		1,200

F-17

GOLDEN OVAL EGGS, LLC

Notes to Consolidated Financial Statements

August 31, 2008, 2007 and 2006

(In Thousands, except unit data)

7.     Long-Term Debt and Derivative Instruments (cont.)

	2008		2007
Note payable to a company; non-interest bearing; secured by certain equipment with a net book value of $632; payable in monthly installments of $4 beginning November 2005 through October 2014.	$	308	$	358
Note payable to a company; non-interest bearing; secured by certain equipment with a net book value of $327; payable in monthly installments of $5 beginning June 2003 through May 2011.	155		211
Note payable to a bank; variable interest rate; secured by assets of United Mills with lack of recourse to the Company; payable in monthly installments of $2; maturing November 2011.	83		101
Note payable to a company; bearing interest at 2%, unsecured; payable in annual installments of $10, plus interest, through November 2014.	70		80
Note payable to a company; variable interest rate on two-thirds of note balance (4% at August 31, 2008); with remaining one-third of note balance being non-interest bearing; unsecured; payable in annual installments of $30, plus interest, through January 2010.	60		90
Note payable to LOL, a related party; bearing interest at 12%; secured by a subordinated lien on all pledged assets; interest accrues monthly. Note forgiven February 2008. Accrued interest was exchanged for a warrant.	—		17,000
	73,946		94,249
Less current maturities	67,526		9,522
Long-term debt, less current maturities	$	6,420	$	84,727

F-18

GOLDEN OVAL EGGS, LLC

Notes to Consolidated Financial Statements

August 31, 2008, 2007 and 2006

(In Thousands, except unit data)

7.     Long-Term Debt and Derivative Instruments (cont.)

Aggregate maturities of long-term debt and derivative instruments are as follows:

2009	$	67,526
2010	1,369
2011	1,398
2012	1,131
2013	1,204
Thereafter	1,318
Total	$	73,946

The Company entered into an Amended and Restated Credit Agreement dated June 30, 2006 for a new term loan and a revolving line of credit (see Note 6) through a financial institution.  The proceeds were used fund an acquisition of assets from Moark, LLC and its subsidiaries (see Note 2).

On October 19, 2007, the Company entered into a second amendment to the Amended and Restated Credit Agreement.  This amendment provided (1) an additional $2.5 million of a short-term revolving note due December 14, 2007, (2) deferred principal payments due October 20 and November 20, 2007, (3) required the Company to retain a financial adviser to evaluate strategic options, (4) modified the covenants for the period ending December 14, 2007, (5) restructured the revolving line of credit to reduce the swingline from $5 million to $2 million, amended the revolving note from $10 million to $13 million, and added a short-term revolving note due December 14, 2007 of $2.5 million.  The second amendment amended certain restrictive covenants requiring the Company to maintain: (1) current ratio beginning December 15, 2007 shall not be less than 1.0 to 1.0 provided; however, that from May 31, 2008 and forward, the ratio may not be less than 1.25 to 1.0; (2) working capital beginning on December 15, 2007 will not be less than $0 provided; however, that from May 31, 2008 and forward the working capital may not be less than $7,000; (3) leverage ratio beginning on December 15, 2007 shall not be permitted on the last day of any fiscal quarter for the four consecutive quarters ending on that date to be more than (a) for the periods ending August 31, 2007, November 30, 2007 and February 28, 2008, 5.0 to 1.0; (b) for the period ending May 31, 2008, and each fiscal quarter ending thereafter, 4.25 to 1.0, provided; however, that the leverage ratio shall be measured (x) for the quarter ending August 31, 2007 on the two fiscal quarters ending on such date on an annualized basis; and (y) for the fiscal quarter ending November 30, 2007, on the three consecutive fiscal quarters ending on such date on an annualized basis; (4) Fixed charge coverage ratio beginning on December 15, 2007, as of the last day of any fiscal quarter for the for consecutive fiscal quarters ending on that date, to be less than (a) for the periods ending August 31, 2007, November 30, 2007 and February 28, 2008, 1.0 to 1.0, and (b) for the period ending May 31, 2008 and each fiscal quarter thereafter, 1.25 to 1.0 provided; however, that the fixed charge coverage ratio shall be measured (x) for the quarter ending August 31, 2007, on the two consecutive fiscal quarters ending date on an annualized basis; and (y) for the fiscal year ending November 30, 2007, on the three consecutive fiscal quarters ending on such date on an annualized basis; (5) net worth beginning December 15, 2007 shall not be permitted to be less than $28 million plus forty percent (40%) of net

F-19

GOLDEN OVAL EGGS, LLC

Notes to Consolidated Financial Statements

August 31, 2008, 2007 and 2006

(In Thousands, except unit data)

7.     Long-Term Debt and Derivative Instruments (cont.)

earnings (exclusive of all net losses) accumulated after August 31, 2006, plus one hundred percent (100%) of all equity contributed after August 31, 2006; (6) EBITDA may not be less than $850 per month.

On December 13, 2007, the Company entered into the First Extension Agreement of the Amended and Restated Credit Agreement and First and Second Amendment to the Amended and Restated Credit Agreement that extended the short-term revolving note maturity date to March 1, 2008.  Principal payments for Tranche A Loan and Tranche B Loan were deferred until maturity date of the applicable Tranche loan.  All financial covenants from the Second Amendment scheduled to commence December 15, 2007 were extended to March 1, 2008, except for the minimum monthly EBITDA covenant that was not affected by this extension.

On March 11, 2008, the Company entered into the Extension and Amendment Agreement of the Amended and Restated Credit Agreement and First and Second Amendment to the Amended and Restated Credit Agreement that extended all revolving note termination dates to July 31, 2008.  Principal payments for Tranche A Loan and Tranche B Loan shall be deferred until the maturity date of the applicable Tranche loan.  All financial covenants from the First Extension Agreement scheduled to commence March 1, 2008 were extended to July 31, 2008.  Commencing the month of March 2008, the minimum monthly EBITDA will be $1,000.

On August 29, 2008, the Company entered into the Third Amendment to the Amended and Restated Credit Agreement that extended the revolving notes termination date to November 1, 2009.  All financial covenants from the Extension and Amendment scheduled to commence July 31, 2008 were extended to November 1, 2009.  The minimum monthly EBITDA of $1,000 is the only current covenant that the Company is required to maintain.  Included in the Third Amendment is a requirement to explore strategic alternatives for recapitalization, refinancing, or sale of all or substantially all of the assets of the Company in one or more transactions.  In addition, the agreement requires that the Company utilize any funds from a sale of the Company to repay outstanding debt and that all indebtedness be repaid on or before March 31, 2009.  Accordingly, this debt has been classified as a current liability.

As of August 31, 2008, the Company was in compliance with the single minimum monthly EBITDA covenant of $1,000.

However, due to certain benchmark requirements in the restated agreement, the Company has classified this line of credit as a current obligation in accordance with EITF D-23, “Subjective Acceleration Clauses and Debt Classification.”  See Note 7.

The Company is exposed to interest rate risk on its debt and enters into interest rate collar agreements to manage this risk.  The Company has not elected to treat its interest rate collar derivatives as hedges and thus recognizes the changes in fair value of its derivative instruments currently in earnings in interest expense.  It is the Company’s policy and practice to use derivative financial instruments only to the extent necessary to manage its exposure and the Company does not hold or issue derivative financial instruments for trading or speculative purposes.

F-20

GOLDEN OVAL EGGS, LLC

Notes to Consolidated Financial Statements

August 31, 2008, 2007 and 2006

(In Thousands, except unit data)

7.     Long-Term Debt and Derivative Instruments (cont.)

The interest rate collar agreement was originally embedded in its Corporate Bonds, Series 2000, which limited the variability of the interest rate on the bonds to a range of 8.46% to 7.31% and was determined to be clearly and closely related.  During 2005, the Company entered into a new financing agreement.  A portion of the proceeds from the new financing were used to retire the Corporate Bonds, Series 2000.  At the time the Corporate Bonds, Series 2000 were retired in September 2004, the interest rate collar agreement became a separate stand alone agreement.  As of August 31, 2008, the interest rate collar agreement, which terminates on July 10, 2010, has a notional amount of $14,280.  The interest rate collar agreement requires that the Company maintain a collateral account.  The fair value of the interest rate collar agreement is recorded as a reduction of the value of the collateral account in the accompanying consolidated balance sheets.

For the fiscal year ending August 31, 2008, the Company recognized a loss from the derivative of $557.  For fiscal year 2007, the Company recognized income from the derivative of $261.  Subsequent to the end of fiscal year 2008, the Company recognized income from the derivative of $913 in September 2008 and terminated the derivative October 22, 2008 resulting in a loss to the Company of $242.  The amounts resulting from these derivative transactions are recorded as a component of interest expense.

8.     Owners’ Equity

a.Description of members’ equity – Upon conversion to a limited liability company, MIR’s patrons’ equity, including common stock, additional paid-in capital, qualified written notices of allocation and unallocated capital reserve have been converted into Class A Units of the Company.  As of August 31, 2008, there were 5,500,353 Class A Units outstanding.  Each unit holder holding a Class A Unit has the right to a pro rata share of the Company’s profits and losses, subject to any preferential rights of any other class of units the Company may issue in the future; receive distributions when declared by the Board of Managers ratable in proportion to units held, subject to any preferential rights of any other class of units the Company may issue in the future and to any applicable lender restrictions; and to vote on matters submitted to a vote of the Company’s members, if the unit holder is also a member.  Membership in the Company is available to any individual, corporation or other entity which acquires a minimum of 2,000 Class A Units and is approved for membership by the Board of Managers.  Each member has one vote for each Class A Unit held on matters submitted to the members for approval.  A member may not transfer units without approval by the Board of Managers or without compliance with or waiver of certain conditions and procedures.

In connection with the asset acquisition described in Note 2, the Company obtained assets valued at $5,000,000 in exchange for the issuance to LOL of 697,350 newly created Class B Units of the Company.  The Class B Units are designated and issued pursuant to, and shall be entitled to such rights, preferences and benefits which are set forth in the Certificate of Designation (the “Certificate”), which is incorporated as a part of the Company’s Limited Liability Company Agreement.  On June 30, 2006, LOL was admitted as a Class B member of the Company.

F-21

GOLDEN OVAL EGGS, LLC

Notes to Consolidated Financial Statements

August 31, 2008, 2007 and 2006

(In Thousands, except unit data)

8.     Owners’ Equity (cont.)

Pursuant to the Certificate, the financial and governance interests of the Class B Units and the rights of the holders of Class B Units are equal in all respect to those of the Class A Units and holders of Class A Units.

Class B members are entitled to one vote for each Class B Unit held by the Class B member, with all votes cast by the Class B member counted with all votes cast by Class A members in determining whether a matter requiring a vote of members has been adopted and approved by the members.  Further, the Class B Unit holders shall have the right to convert the Class B Units into Class A Units on the basis of one Class B Unit for one Class A Unit.

On February 15, 2008, the Company and LOL executed an agreement whereby the purchase price of the Egg Products Division of Moark was reduced by $17,000 and an equal amount of the subordinated note used to finance the acquisition was reduced.  The Warrant to Subscribe for and Purchase Units of Golden Oval (the “2006 Warrant”) was surrendered and cancelled as part of the purchase price reduction.  Additionally, the Company issued a warrant for the purchase of up to 880,492 newly authorized convertible preferred units in exchange for the forgiveness of accrued interest on the subordinated note.  The 697,350 Class B shares held by LOL were converted to Class A units per the agreement.

Basic earnings per member unit are computed by dividing income available to members by the weighted-average number of member units outstanding for the period.  Diluted earnings per member unit are computed based on net income divided by the weighted-average number of member units and potential member units.  Member unit equivalents include those related to share-based compensation, convertible notes and warrants.  The weighted-average number of member units outstanding for computing basic earnings per unit was 5,456,358 during the year ended August 31, 2008.  There were 880,492 potentially dilutive shares resulting in a diluted weighted average of 5,933,995 fully diluted member units for the year ended August 31, 2008.

b.Noncontrolling interest – Noncontrolling interest represents the noncontrolling members’ proportionate share of the equity of AEI, LLC, the minority stockholders’ proportionate share of the equity of United Mills, and the patrons’ equity in Midwest Investors of Iowa, Inc.  At August 31, 2008 and 2007, the Company owned 68% of the equity and voting control of AEI, LLC, which requires that AEI, LLC’s operations be included in the consolidated financial statements of the Company.  At August 31, 2008 and 2007, the Company owned 33 1/3% of United Mills’ equity.  United Mills is accounted for as a variable interest entity in which the Company has been determined to be the primary beneficiary, which requires that United Mills’ operations be included in the consolidated financial statements of the Company.  At August 31, 2008 and 2007, the Company did not own any interest in Midwest Investors of Iowa, Inc.  Midwest Investors of Iowa, Inc. is accounted for as a variable interest entity in which the Company has been determined to be the primary beneficiary, which requires that Midwest Investors of Iowa, Inc.’s operations be included in the consolidated financial statements of the Company.  The 32% equity interest of AEI, LLC, the 66 2/3% interest of United Mills and the 100% interest of Midwest Investors of Iowa, Inc. not owned by the Company are shown as noncontrolling interest in the accompanying 2008 and 2007 consolidated financial statements.

F-22

GOLDEN OVAL EGGS, LLC

Notes to Consolidated Financial Statements

August 31, 2008, 2007 and 2006

(In Thousands, except unit data)

9.     Stock-Based Compensation

The Company has bonus and compensation plans in place for management.  Under these agreements management may receive up to 50% of certain performance bonuses in the form of Class A Units.  The Company accrues for management bonuses during the year based upon the estimated amount that will be earned by year end.  Upon approval by the Board of Managers, the bonuses are paid to management.  The number of units to be issued is based upon the higher of the book or market value of the Class A Units at the time the bonus is awarded.  For the years ended August 31, 2008, 2007 and 2006, a total of 57,810, 20,895 and 107,203 Class A Units were issued to management at a per unit value of $4.50 for 57,810 units in 2008, $7.63 for 20,895 units in 2007 and $6.05 for 107,203 units in 2006, respectively.

The Class A Units are nontransferable and subject to forfeiture ratably over the following three years.  The employee must be employed on the anniversary date of issuance to avoid forfeiture.  In the event that termination of the employee occurs, the Company will record any forfeiture of units as a reduction to compensation expense in the period in which the forfeiture occurs.  There were no forfeitures for the year ended August 31, 2008 or 2006.  There were forfeitures of 2,045 units for the year ended August 31, 2007. At August 31, 2008, A total of 57,810 units valued at $235 were subject to forfeiture.

The members of the Board of Managers are granted 2,000 Class A Units for each year served on the board following each year of service.  The Company recognizes compensation expense for these awards based upon the fair value on the date they are granted.  For the years ended August 31, 2008 and 2007, a total of 11,666 units at a unit value of $1.87 and 12,000 units at a unit value of $2.60, respectively, were awarded.

Below is a summary of unit activity pursuant to these compensation plans for the years ended August 31, 2008, 2007 and 2006.

	2008			2007					2006
	Units	Grant Amount		Units		Grant Amount			Units	Grant Amount
Issued to management	57,810	$	260	20,895		$	159		107,203	$	649
Issued to directors	11,666	22		12,000		31			14,000	98
Forfeitures	—	—		(2,045	)	(13		)	—	—
Total	69,476	$	282	30,850		$	177		121,203	$	747

The value of units earned was $139, $84, and $1,063 for the years ended August 31, 2008, 2007 and 2006, respectively.

F-23

GOLDEN OVAL EGGS, LLC

Notes to Consolidated Financial Statements

August 31, 2008, 2007 and 2006

(In Thousands, except unit data)

10.   Related Party Transactions

The Company has entered into a grain handler agreement with a cooperative which has an ownership interest in the Company.  For the years ended August 31, 2008, 2007 and 2006, the Company has purchased services totaling $18,650, $12,939 and $8,782, respectively, from this cooperative, with accounts payable for these services of $548, $666 and $168 as of August 31, 2008, 2007 and 2006, respectively.

For the year ended August 31, 2008, the Company has purchased feed totaling $14,667 from United Mills.  These transactions were eliminated through consolidation of the financial statements as of and for the year ended August 31, 2008, as a result of the implementation of FIN-46R (see Note 3).

The Company leases land from a commonly managed cooperative and the Company holds a note receivable of $950 and mortgage for that land from the cooperative.  Rent expense totaled $78 for the year ended August 31, 2008.  Interest income totaled $76 for the year ended August 31, 2008.  These transactions were eliminated through consolidation of the financial statements as of and for the year ended August 31, 2008, as a result of the implementation of FIN-46R (see Note 3).

The Company had litter sales to a related party of $298, $307 and $262 for the years ending August 31, 2008, 2007 and 2006, respectively, which are included in other income in the accompanying consolidated statements of operations.

As a result of the Moark Acquisition completed on June 30, 2006, the Company issued 697,350 of its newly-created Class B Units to LOL.  See Note 2 for a description of the consideration paid by the Company in the Moark Acquisition.  The Certificate relating to the Class B Units provides that each Class B Unit is convertible at any time into one Class A Unit at the election of the holder.  As discussed in Note 8.a., on February 15, 2008, all Class B Units were converted to Class A Units per approval of the sole Class B shareholder. Therefore, as of August 31, 2008, LOL is the beneficial owner of 25% of the Company’s Class A Units based upon 5,500,353 Class A Units outstanding as of August 31, 2008.  As a result of its beneficial ownership, LOL is considered a related party for the purposes of this Note 10.  In addition to the Note and other agreements relating to payment of the purchase price, the Company and LOL (or its affiliates) also became parties to agreements as a result of the Moark Acquisition under which the Company paid or accrued as an expense the following amounts to LOL (or its affiliates) as of August 31, 2008 and 2007, respectively: egg supply agreement with Moark, LLC $15,310 and $28,680; research and development services agreement $143 and $266; sublease of Norco, California facility $147 and $154; trademark license agreements $136 and $8; transition and shared services agreement $1,068 and $2,738; and grain purchases $76 and $22.

F-24

GOLDEN OVAL EGGS, LLC

Notes to Consolidated Financial Statements

August 31, 2008, 2007 and 2006

(In Thousands, except unit data)

11.   Pension Plan

The Company has a defined contribution plan with a 401(k) feature which covers all full-time employees that have six months of eligible service.  Employees are permitted to contribute up to their individual permissible legal limits.  The Company may make, but is not required to make, a matching contribution to the plan of an amount and type determined each year.  The Company may also make, but is not required to make, a discretionary contribution to the plan for a plan year.  Contributions made by the Company to the plan totaled $685, $725 and $406 for the years ended August 31, 2008, 2007 and 2006, respectively.

12.   Commitments and Contingencies

a.The Company has entered into agreements with two independent contractors who will care for and raise the Company’s Renville, Minnesota pullet flocks until they are old enough to be transferred into a layer facility and begin production.  One agreement was effective August 1, 2008 and may be terminated at any time with a 60 day notice, but will continue throughout the pullet grow out of any flock placed before the intended termination date.  The second agreement, effective July 9, 2008, will be on an initial term of three years beginning with the placement of the first pullet flock.  A 365 day notice of termination is required for this agreement.  The independent contractors are paid per acceptable pullet delivered to the layer facility.

b.The Company leases certain equipment and land under various lease agreements that are classified as operating leases.  Rent expense for all operating leases amounted to $2,381, $2,093 and $712 for the years ended August 31, 2008, 2007 and 2006, respectively.

At August 31, 2008, future minimum rental commitments under non-cancelable operating leases are as follows:

2009	$	1,441
2010	1,107
2011	851
2012	645
2013	369
Thereafter	677
	$	5,090

c.The Company’s, Iowa facility has an industrial wastewater treatment facility designed to treat wastewater from egg breaking.  The Thompson facility also has an associated National Pollution Discharge and Elimination System (“NPDES”) permit from the Iowa Department of Natural Resources (“IDNR”) that governs the quality of the wastewater influent to and effluent from the treatment facility.

F-25

GOLDEN OVAL EGGS, LLC

Notes to Consolidated Financial Statements

August 31, 2008, 2007 and 2006

(In Thousands, except unit data)

12.   Commitments and Contingencies (cont.)

On June 14, 2006, a Notice of Violation (“NOV”) was issued against the Company by the IDNR regarding alleged violations of the NPDES permit limits for biochemical oxygen demand, total suspended solids, and ammonia nitrogen.  Additional NOVs were issued on August 24, 2006 and November 13, 2006 relating to the same alleged NPDES permit violations for different time periods.

d.On December 5, 2006, the Iowa Environmental Protection Commission referred the matter to the Iowa Attorney General to seek appropriate relief through the courts, which would include a judicial consent decree regarding a settlement on a civil penalty amount between the Company and the Iowa Attorney General.  On March 29, 2007, the Iowa Attorney General’s office filed suit against the Company requesting civil penalties injunctive relief against further NPDES permit violations.  A Consent Decree was issued July 14, 2008 that required the Company to pay a civil penalty of $200 within 10 days of the decree, permanently enjoined the Company from further violations of the Iowa code and NPDES permit, settlement of all violations and required the Company to complete improvements to its waste water treatment facility pursuant to the construction permit issued by the Iowa Department of Natural Resources on February 11, 2008 by April 30, 2009.  The anticipated cost of the waste water project is $2,500.  Effective with the Second Extension and Amendment agreement with CoBank, the Company is required to escrow funds at the rate of $200 per month, with CoBank acting as the escrow agent, for payment of the Thompson waste water project.  Effective August 28, 2008, the Third Amendment to the Amended and Restated Credit Agreement required the escrow payment for August 2008 to be $1,000 with the September 2008 through November 2008 escrow payments of $200 and the December 2008 final escrow payment to be $100.  As of August 31, 2008, the escrow balance was $1,682.

13.   Concentrations of Credit Risk

Financial instruments which potentially subject the Company to concentrations of credit risk consist primarily of trade accounts receivable with customers, cash investments and other short-term investments deposited with financial institutions.  The Company generally does not require collateral from its customers.  Such credit risk is considered by management to be limited due to its customers’ financial resources and past payment history.

At August 31, 2008 and 2007, the Company maintained cash balances with financial institutions in excess of the federal deposit insurance limit.

F-26

GOLDEN OVAL EGGS, LLC

Notes to Consolidated Financial Statements

August 31, 2008, 2007 and 2006

(In Thousands, except unit data)

14.   Major Customers

At August 31, 2008, the Company has supply agreements for liquid egg products with three of its major customers, which expire at various times over the next five years.  Sales to these three customers are presented as follows as a percentage of total sales: 8%, 7% and 16% for the year ending August 31, 2008, 12.2%, 7% and 18.2% for the year ending August 31, 2007 and 23%, 14% and 31% for the year ending August 31, 2006.  The Company had balances due from these customers of $1,029, $829 and $3,047 at August 31, 2008, respectively, and $945, $1,423 and $1,909 at August 31, 2007, respectively.

The third customer discussed above has operations in Canada.  Sales to the non-U.S. subsidiary of this customer represented 1% and 4% of total sales for the years ending 2007 and 2006, respectively.  The Company had balances due from these non-U.S. sales of $84 at August 31, 2007.

15.   Quarterly Financial Data (unaudited)

Quarterly financial data is as follows (units in thousands):

												Basic				Diluted
												Weighted -				Weighted
			Operating			Net			Basic			Average	Diluted			Average
	Net		Income			Income			Earnings			Outstanding	Earnings			Outstanding
	Sales		(Loss)			(Loss)			Per Unit			Units	Per Unit			Units
Fiscal year 2008 quarter ended:
November 30, 2007	$	53,203	$	(357	)	$	(2,757	)	$	(0.51	)	5,431	$	(0.50	)	5,431
February 29, 2008	55,335		(5,491		)	9,290			1.71			5,431	1.67			5,566
May 31, 2008	56,649		4,437			2,751			0.51			5,431	.43			6,512
August 31, 2008	52,859		2,310			575			0.11			5,443	.04			6,324
	$	218,046	$	899		$	9,859		$	1.82		5,456	$	1.67		5,934
Fiscal year 2007 quarter ended:
November 30, 2006	$	48,617	$	(960	)	$	(3,664	)	$	(0.68	)	5,420	(0.68		)	5,420
February 28, 2007	45,446		(3,025		)	(4,749		)	(0.88		)	5,419	(0.88		)	5,419
May 31, 2007	53,035		1,260			(1,020		)	(0.19		)	5,423	(0.19		)	5,423
August 31, 2007	51,179		(3,284		)	(5,740		)	(1.05		)	5,431	(1.05		)	5,431
	$	198,277	$	(6,009	)	$	(15,173	)	$	(2.80	)	5,423	$	(2.80	)	5,423
Fiscal year 2006 quarter ended:
November 30, 2005	$	19,033	$	1,913		$	1,583		$	0.34		4,689	0.34			4,689
February 28, 2006	19,082		973			545			0.12			4,689	0.12			4,689
May 31, 2006	19,217		1,052			532			0.11			4,698	0.11			4,698
August 31, 2006	36,306		115			(1,597		)	(0.31		)	5,168	(0.31		)	5,168
	$	93,638	$	4,053		$	1,063		$	0.22		4,811	$	0.22		4,811

F-27

GOLDEN OVAL EGGS, LLC

Notes to Consolidated Financial Statements

August 31, 2008, 2007 and 2006

(In Thousands, except per unit data)

16.   Subsequent Events

In September, 2008, the decision was made to close this location by December 31, 2008.  The Company expects to recognize approximately $585 of expense in the first fiscal quarter of 2009 for severance and other associated costs.

On December 15, 2008, the Company entered into a Purchase and Sale Agreement to sell essentially all assets, net of certain assumed liabilities, for $123,750.  The funds received from this sale will be used to repay debt.  This transaction is subject to regulatory and shareholder approval.

F-28

EX-10.20

Exhibit 10.20

PURCHASE AND SALE AGREEMENT

Agreement Date:	December 15, 2008
Scheduled Closing Date:	December 31, 2008
Seller:	Golden Oval Eggs, LLC
Seller:	GOECA, LP
Seller:	GOEMCA, Inc.
Seller:	Midwest Investors of Iowa, Cooperative
Purchaser:	Rembrandt Enterprises, Inc.

PURCHASE AND SALE AGREEMENT			1
PURCHASE AND SALE AGREEMENT			1
ARTICLE 1.	BASIC TRANSACTION		1
Section 1.1.		SALE AND PURCHASE OF ASSETS	1
Section 1.2.		EXCLUDED ASSETS	3
Section 1.3.		LIMITATION ON LIABILITIES AND OBLIGATIONS ASSUMED	4
Section 1.4.		SALES, USE, AND DEED TAXES	4
ARTICLE 2.	PURCHASE PRICE AND PAYMENT		4
Section 2.1.		PURCHASE PRICE	4
Section 2.2.		POST CLOSING ADJUSTMENT TO PURCHASE PRICE - WORKING CAPITAL ADJUSTMENT	6
Section 2.3.		PRORATION OF TAXES	9
Section 2.4.		ALLOCATION OF PURCHASE PRICE	9
ARTICLE 3.	CONDUCT AND TRANSACTION OF BUSINESS PRIOR TO CLOSING		9
Section 3.1.		ACCESS TO INFORMATION	9
Section 3.2.		RESTRICTIONS IN OPERATION OF THE BUSINESS	9
Section 3.3.		NO SOLICITATION OF OTHER OFFERS	10
Section 3.4.		TITLE EVIDENCE	12
Section 3.5.		HART-SCOTT-RODINO ACT FILINGS	12
Section 3.6.		NOTIFICATION OF CERTAIN MATTERS	13
Section 3.7.		RISK OF LOSS	13
Section 3.8.		PUBLIC STATEMENTS	13
Section 3.9.		GOE AND MIDWEST MEMBER APPROVAL	13
Section 3.10.		DISCLOSURE SCHEDULES; NOTICE OF DEVELOPMENTS	14
ARTICLE 4.	CLOSING		14
Section 4.1.		CLOSING	14
Section 4.2.		DOCUMENTS TO BE DELIVERED BY SELLER	15
Section 4.3.		DOCUMENTS TO BE DELIVERED BY PURCHASER	17
ARTICLE 5.	CONDITIONS OF CLOSING; ABANDONMENT OF TRANSACTION		17
Section 5.1.		CONDITIONS TO OBLIGATION OF PURCHASER TO PROCEED ON THE CLOSING	17
Section 5.2.		CONDITIONS TO OBLIGATIONS OF SELLER TO PROCEED ON THE CLOSING	20

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Section 5.3.		TERMINATION OF AGREEMENT	21
Section 5.4.		CONSEQUENCES OF TERMINATION	22
Section 5.5.		REMEDY UPON TERMINATION	22
ARTICLE 6.	POST-CLOSING OBLIGATIONS		24
Section 6.1.		FURTHER DOCUMENTS AND ASSURANCES	24
Section 6.2.		COLLECTION OF RECEIVABLES	24
Section 6.3.		ACCESS TO INFORMATION	24
Section 6.4.		SELLER’S EMPLOYEES	25
ARTICLE 7.	REPRESENTATIONS AND WARRANTIES		25
Section 7.1.		REPRESENTATIONS AND WARRANTIES OF SELLER	25
Section 7.2.		REPRESENTATIONS AND WARRANTIES OF PURCHASER	40
ARTICLE 8.	RESTRICTIVE COVENANTS		41
Section 8.1.		NON-COMPETITION	41
Section 8.2.		NON-DISCLOSURE	41
Section 8.3.		NO USE OF NAME	41
Section 8.4.		INJUNCTIVE RELIEF	42
ARTICLE 9.	SURVIVAL		42
Section 9.1.		SURVIVAL OF REPRESENTATIONS AND WARRANTIES	42
ARTICLE 10.	GENERAL		42
Section 10.1.		ENTIRE AGREEMENT	42
Section 10.2.		APPLICABLE LAW; WAIVER OF JURY TRIAL; CONSENT TO JURISDICTION	42
Section 10.3.		SCHEDULES AND EXHIBITS	43
Section 10.4.		EXECUTION IN COUNTERPARTS	43
Section 10.5.		HEADINGS	43
Section 10.6.		PRONOUNS	43
Section 10.7.		PLURALS	43
Section 10.8.		BINDING EFFECT AND BENEFIT	43
Section 10.9.		SUCCESSORS AND ASSIGNS	43
Section 10.10.		NO THIRD PARTY RIGHTS	43
Section 10.11.		NOTICES	43
Section 10.12		DEFINITIONS	44
Section 10.13.		SEVERABILITY	48

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Section 10.14.	EXPENSES	48
Section 10.15.	PUBLICITY	49
Section 10.16.	WAIVER	49
Section 10.17.	Construction; INTERPRETATION	49
Section 10.18.	DISCLOSURE SCHEDULES	49
Section 10.19.	SPECIFIC PERFORMANCE	49
Section 10.20.	ATTORNEY FEES	49
Section 10.21.	CONSENTS	50

iii

PURCHASE AND SALE AGREEMENT

This Purchase and Sale Agreement (the “Agreement”) is made this 15th day of December, 2008, by and among GOLDEN OVAL EGGS, LLC, a Delaware limited liability company (“GOE”), MIDWEST INVESTORS OF IOWA, COOPERATIVE, a cooperative association organized under Chapter 501 of the Iowa Code (“Midwest”), GOEMCA, INC., a Delaware Corporation (“GOEMCA”), GOECA, LP, a Delaware limited partnership (“GOECA,” and, together with GOE, GOEMCA and Midwest, collectively, the “Seller” or individually, a “Seller Party”), and REMBRANDT ENTERPRISES, INC., an Iowa Subchapter S corporation (“Purchaser”).   Unless otherwise defined in this Agreement, capitalized terms are defined in SECTION 10.12.

RECITALS:

A.Seller is engaged in the business of producing, processing and distributing value added egg products, including, without limitation, liquid whole egg, liquid egg white, and liquid egg yolk, as well as other further processed, value added egg products (the “Business”);

B.The Seller occupies or utilizes facilities located at (i) 1800 Park Avenue East, Renville, MN  56284, (ii) 15650 35^th Ave. N., Suite 110, Plymouth, MN  55446, (iii) 13780 450^th Street, Thompson, Iowa 50478, (iv) 496 Industrial Park Road, Abbeville, AL 36310, (v) 1597 S. Washington, Millersburg, OH  44654, 1811 Mountain Ave, Norco, CA  92860, (vi) 4755 East 49^th, Los Angeles, CA  90058 and (vii) 409 N. Wood, Neosho, MO  64850 (collectively, the “Business Premises”);

C.Midwest owns the real estate located in Thompson, Iowa used by GOE in the Business; and

D.Purchaser is desirous of purchasing from Seller, as a going concern business, and the Seller is desirous of selling to Purchaser, substantially all of the assets of Seller, all upon, and subject to, the terms and conditions set forth in this Agreement.

NOW, THEREFORE, in consideration of the recitals and the mutual undertakings, representations, warranties, covenants, and agreements contained in this Agreement, the Parties agree as follows:

ARTICLE 1.BASIC TRANSACTION.

Section 1.1.SALE AND PURCHASE OF ASSETS.

Subject to the terms and conditions in this Agreement, Seller agrees on the Closing (as defined in SECTION 4.1(a)) to assign, sell, transfer, convey, and deliver to Purchaser, and Purchaser agrees on the Closing to purchase and accept from Seller, all of the assets and personal property of Seller (excepting only the assets specifically identified as “Excluded Assets”) related to or used in the operation of the Business, wherever the same may be located (collectively referred to as the “Purchased Assets”), including, without limitation, the following:

(a)Land.  The parcels of land described in EXHIBIT 1.1(a) attached to this Agreement (the “Land”), together with all rights, easements and interests appurtenant to the

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Land, including, but not limited to, any water or mineral rights owned by or leased to Seller.

(b)Improvements.  All improvements located on the Land, including, but not limited to, all buildings, as well as all other structures, systems, and utilities associated with, and utilized by Seller in the ownership and operation of the Business (all improvements are collectively referred to as the “Improvements”).

(c)Fixed Assets.  All fixed assets, including all machinery and equipment, furniture, tools, motor vehicles, loaders, maintenance equipment, signage, office furniture, fixtures and equipment, computer workstations and other office equipment, servers, laptops, copiers, scanners, printers, telephone equipment, computer hardware, telephone equipment, and leasehold improvements together with all spare parts, accessories and tooling and specifically including those items set forth on the fixed asset register, a copy of which is attached hereto as EXHIBIT 1.1(c) (all fixed assets are collectively referred to as the “Fixed Assets”);

(d)Intangible Property.  All intangible personal property, including all business records, Customer and Prospect Information, all computer programs and software including back-up copies and documentation therefore, and specifically, without limitation, those items set forth on EXHIBIT 1.1(d), sales orders in process, customer lists, customer sales history, and all related records (including contact information), vendor lists and item numbers, logos, telephone numbers, letterhead, customer contracts for future business, client license agreements, artwork (whether created for customers or for advertising purposes and in whatever form maintained), marketing materials, catalogs, samples, sales materials, sales literature, displays, advertising pieces, and goodwill, as well as any and all product formulation, bills of material and processing specifications (including, without limitation, customer specifications), (“Intangible Property”);

(e)Receivables.  Accounts and Notes Receivable from any source whatsoever arising (“Receivables”);

(f)Intellectual Property.  All Intellectual Property Rights (the “Intellectual Property”) including those items set forth in EXHIBIT 1.1(f);

(g)Trade Rights.  All distributor, supplier and marketing industry memberships, registrations, rights and privileges and any documentary evidence thereof (“Trade Rights”);

(h)Licenses and Permits.  All permits, licensing approvals, and notifications, governmental or otherwise, relating to the Business, including those items set forth on EXHIBIT 1.1(h) (“Licenses and Permits”);

(i)Franchises.  All distributor and franchise contract rights related to the Business, including those identified on EXHIBIT 1.1(i) (“Franchises”);

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(j)Contracts.  All rights arising under contracts (whether written or oral) related to and/or arising out of the operation of the Business (the “Contracts”) as well as any claims (including any insurance claims and warranty claims), causes of action, credits, guarantees, mortgages, pledges, and covenants against completion in favor of Seller or under which Seller is the beneficiary, including those matters identified on EXHIBIT 1.1(j) attached to this Agreement (collectively, “Contract Rights”);

(k)Advertising Materials.  All advertising and marketing materials, sales literature, sales aids, trade show displays, customer displays, advertising pieces, catalogs and samples on hand and in possession of customers and negatives, film and production materials for any of the foregoing (“Advertising Materials”);

(l)Prepaid Assets, Deposits and Patronage Dividends.  All prepaid assets and deposits, including, but not limited to, deposits for advertising, leases, equipment, leases, utilities and bids, trade show deposits, and prepaid license fees, royalties, subscriptions, dues, interest, insurance premiums, cash surrender value of insurance policies and maintenance agreements, feed, grain and ingredient deposits, pullet deposits (collectively, “Prepaid Assets”), as well as all right, title and interest in and to patronage dividends with Farm Credit and Co-Bank as set forth on EXHIBIT 1.1(l);

(m)Inventory.  All inventory of finished goods, work-in-process, raw stock, materials and supplies (“Inventory”), including, without limitation, inventories of pullets and laying hens, feed, grain, feed supplements, medications, related nutrition and feed supplements, raw materials, finished goods, supplies, work in process, semi finished goods, components, and packaging materials, including, without limitation, those items set forth in the Inventory Ledger attached hereto as EXHIBIT 1.1(m);

(n)Shares and Securities.  All shares of capital stock of any corporation and other securities or rights to acquire any shares or securities, including, without limitation, interests in AEI and United Mills as set forth on EXHIBIT 1.1(n) (“Shares and Securities”).

(o)Miscellaneous Assets.  Any other miscellaneous assets related to the Business, including all underlying assets reflected in the May 31, 2008 and August 31, 2008 balance sheets (“Other Assets”).

Section 1.2.EXCLUDED ASSETS.

Notwithstanding anything to the contrary in this Agreement, Purchaser does not purchase, and Seller does not sell, any of the following assets (“Excluded Assets”):

(a)Corporate Books and Records.  Seller’s corporate minute books and unitholder or investor information (provided that Seller will provide copies to Purchaser upon request by Purchaser for reasonable business purposes).

(b)Cash.  Seller’s cash on hand, or on deposit with any financial institution.

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(c)Other Assets.  The items of personal property specifically listed on EXHIBIT 1.2(c), attached to this Agreement.

(d)Millersburg Lease and Certain Millersburg Assets.

Any lease agreement related to the Millersburg, Ohio location, and assets located at Millersburg and used in the operation of the Millersburg facility which are sold by Seller prior to Closing (subject to Purchaser’s right of first refusal on two (2) Diamond Breakers used in the operation at the Millersburg facility).

(e)Receivables in Litigation.  The items of Receivables specifically listed on EXHIBIT 1.2(e).

Section 1.3.LIMITATION ON LIABILITIES AND OBLIGATIONS ASSUMED.

Except for the Assumed Liabilities, as defined in SECTION 2.1(c)(i), Purchaser shall not assume any Liability of Seller, or any obligations, or undertakings of Seller of any kind or nature, whether fixed or contingent, known or unknown, determined or determinable, due or not yet due.

Section 1.4.SALES, USE, AND DEED TAXES.

Seller and Purchaser shall each be fifty percent (50%) responsible for payment of any sales and use taxes assessable with respect to the transfer of the Purchased Assets.  Seller and Purchaser shall each be fifty percent (50%) responsible for all transfer, or deed taxes assessable with respect to the transfer of the Land and the Improvements.

ARTICLE 2.PURCHASE PRICE AND PAYMENT.

Section 2.1.PURCHASE PRICE.

The purchase price for the Purchased Assets, as adjusted by the Closing Working Capital Adjustment, shall be One Hundred Twenty Three Million Seven Hundred Fifty Thousand and no/100 Dollars ($123,750,000.00) (the “Cash Purchase Price”) and the assumption of the Assumed Liabilities (collectively the “Purchase Price”).  Purchaser shall pay the Purchase Price to Seller as follows:

(a)Payment at Closing.  One Hundred Twenty One Million Two Hundred Fifty Thousand and no/100 Dollars ($121,250,000.00) (the “Closing Cash Payment”) by wire transfer in immediately available funds at Closing, as adjusted by:

(i)a reduction for the total remaining cost to complete the Thompson Facility Improvements, as such term is defined in SECTION 5.1(o), and

(ii)a reduction for the total remaining cost to complete the Safety/Environmental Improvements, as such term is defined in SECTION 5.1(o);

(b)Post-Closing Payment.  Two Million Five Hundred Thousand and no/100 Dollars ($2,500,000.00), plus interest at a 3 Month Libor rate calculated at Closing, as adjusted after the computation of the Closing Working Capital Adjustment, payable as provided in SECTION 2.2.

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(c)Assumption Agreement.

(i)Assumption of the following enumerated liabilities of Seller (the “Assumed Liabilities”) pursuant to a written assumption agreement delivered by Purchaser at Closing in the form of EXHIBIT 2.1(c) (the “Assumption Agreement”) :

(A)The assigned contracts listed on EXHIBIT 2.1(c)(i)(A) (the “Assigned Contracts”);

(B)Current trade accounts payable to the extent accrued on the Final Working Capital Statement, as defined in SECTION 2.2(d)(ii);

(C)Seller’s obligation to perform work for which Seller has received payment prior to Closing (e.g. customer deposits) to the extent accrued on the Final Working Capital Statement;

(D)Accrued salaries, commissions, wages, and payroll taxes for the current pay period and accrued PTO/vacation (subject to the maximum PTO/vacation carryover under Purchaser’s PTO Plan) relating solely to employees hired by Purchaser on the Closing (the “Hired Employees”), to the extent accrued on the Final Working Capital Statement;

(E)Seller’s obligation under the leases for property, equipment or other assets directly related to the Business which are expressly set forth on EXHIBIT 2.1(c)(i)(E); and

(F)Other accrued expenses as set forth on EXHIBIT 2.1(c)(i)(F) to the extent accrued on the Final Working Capital Statement.

provided, however, that Seller shall continue to pay and perform each of the Assumed Liabilities to be assumed by Purchaser in accordance with the terms of such obligations, or, if earlier in the Ordinary Course of Business prior to the Closing.

(ii)Notwithstanding the foregoing, Purchaser shall not assume and the Assumed Liabilities shall not include:

(A)Taxes, as defined in SECTION 7.1(f)(i) of this Agreement, except as specifically provided in SECTION 2.3;

(B)Obligations, including notes, accrued expenses or other liability or debt (including, without limitation, director’s fees) of the Seller or any Related Person of the Seller;

(C)Any salaries, commissions, wages, related payroll taxes, and accrued PTO/vacation except as expressly reflected on the Final

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Working Capital Statement, as well as benefits, performance or incentive bonuses, severance payments and any other amounts due to any employee of Seller, except as expressly reflected on the Final Working Capital Statement;

(D)Any capital lease obligations;

(E)Any interest bearing debt, such as, without limitation, any credit lines or business loans;

(F)Any environmental Liability, obligations and commitments of Seller, including, without limitation, Seller’s non-compliance with Environmental Health and Safety Requirements, and all costs associated with the completion of construction of the Thompson wastewater treatment facility, as well as any Liability or obligation under the related Iowa Consent Agreement;

(G)Any Liability associated with the investigation initiated by the Assistant US Attorney for the United States of America on behalf of the Antitrust Division of the Department of Justice (“DOJ”), for which GOE obtained a Subpoena to testify before the grand jury issued out of the Eastern District of Pennsylvania, any Liability associated with the Civil Investigative Demand issued by the Attorney General of the State of Florida (“Investigative Demand”), as well as all Liability associated with civil class action litigation against GOE;

(H)Any obligations under agreements, whether written or oral, with employees of Seller or any other Persons that would provide them cash or other compensation upon consummation of the Contemplated Transactions, all of which agreements are identified in EXHIBIT 2.1(c)(ii)(h); and

(I)Transactional Costs of Seller, as defined in SECTION 10.14 of this Agreement, including any Greene Holcomb & Fisher’s fees for this transaction.

Section 2.2. POST CLOSING ADJUSTMENT TO PURCHASE PRICE - WORKING CAPITAL ADJUSTMENT

The Purchase Price shall be increased or decreased by the amount, if any, of the Closing Working Capital Adjustment.  The “Closing Working Capital Adjustment” is the amount by which the Working Capital as of the Closing and as set forth on the Final Working Capital Statement, is greater than or less than Twenty Five Million Two Hundred Seventy Four Thousand and No/100 Dollars ($25,274,000.00) (the “Threshold”).  Seller’s calculation of the Threshold working capital, and the format for calculation thereof, shall be set forth on EXHIBIT 2.2 hereto.  The adjustment to Purchase Price shall be made after determination of the Final Working Capital

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Statement, as defined in SECTION 2.2(d)(ii), of Seller following Closing and in accordance with this SECTION 2.2.

(a)Working Capital.  “Working Capital,” shall be defined as the adjusted sum of the net book value of Accounts Receivable, Inventory, and Prepaid Expenses transferred to Purchaser hereunder, less the net book value of the Assumed Liabilities, all as set forth in the Final Working Capital Statement, all as calculated under the method shown in EXHIBIT 2.2.

(b)Rules for Computation.  The Final Working Capital Statement shall be prepared in accordance with generally accepted accounting principles (“GAAP”), consistently applied, using GOE’s past practices and specifically in accordance with the form and methodology set forth in EXHIBIT 2.2

(c)Projected Working Capital Adjustment.  The “Projected Working Capital Adjustment” shall be the difference between the Projected Working Capital and that Threshold, as calculated within twenty (20) days after the Closing.  Specifically, Purchaser shall, in consultation with Tom Powell, review the Seller’s Accounts Receivable aging report, Inventory extension report, and the Accounts Payable aging report, and perform necessary testing of the sums reflected in such reports to determine an estimate of the projected working capital as of the Closing (“Projected Working Capital”), consistent with the methodology for determining the Closing Working Capital Adjustment.  Purchaser and Seller shall review any Projected Working Capital, based upon such determination.  In the event that the Parties agree that the Projected Working Capital exceeds the Threshold, then the amount by which the Projecting Working Capital exceeds the Threshold shall be paid by Purchaser to Seller within two (2) Business Days after such determination and agreement (the amount of such payment hereinafter, the “Projected Working Capital Adjustment”).

(d)Closing Working Capital Adjustment.  The determination of the Closing Working Capital Adjustment shall be made as follows:

(i)During the seventy-five (75) day period following the Closing, or as soon after the Closing as is practicable, Purchaser, in cooperation with a representative appointed by Seller, will prepare a draft of a “Working Capital Statement” as of the Closing Date, setting forth the calculation of working capital transferred to Purchaser hereunder.  Seller shall notify Purchaser of their acceptance or rejection of the Working Capital Statement within thirty (30) days of receipt of the Working Capital Statement.

(ii)Seller’s failure to deliver notice of acceptance or rejection within the 30 day period shall be deemed to constitute acceptance. Upon acceptance, whether in writing or by passage of time, the Working Capital Statement shall become final and binding upon the Parties (the “Final Working Capital Statement”).

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(iii)In the event a Party rejects the Working Capital Statement, the Parties shall, within 15 days (or another period as the Parties may agree) following the notice (the “Resolution Period”), attempt to resolve their differences, and any resolution by the Parties as to any disputed amounts shall be final, binding and conclusive on the Parties.

(iv)If, at the conclusion of the Resolution Period, there are any amounts remaining in dispute as to the Working Capital Statement, then all amounts remaining in dispute will be submitted to the accounting firm of Grant Thornton (the “Neutral Auditor”).  Each Party agrees to execute, if requested by the Neutral Auditor, a reasonable engagement letter.  All fees and expenses relating to the work, if any, to be performed by the Neutral Auditor, will be paid by the Party not prevailing with respect to the calculation in dispute between Seller and Purchaser as determined by the Neutral Auditor, such that the prevailing Party is reimbursed for any fees and expenses incurred.  The Neutral Auditor will act as an arbitrator to determine, based solely on the provisions of this section and the related exhibits, only those issues still in dispute and only as to whether the amounts were arrived at in accordance with this Agreement.  The Neutral Auditor’s determination must be made within 30 days of its engagement, must be set forth in a written statement delivered to Seller and the Purchaser and is final, binding and conclusive on the Parties.

(v)Upon resolution of any dispute, whether by acceptance, agreement or resolution through the Neutral Auditor, the result shall be the Final Working Capital Statement.

(e)Adjustments.  The Closing Working Capital Adjustment, if any, to Purchase Price shall be effected within two (2) Business Days after the determination of the Final Working Capital Statement under SECTION 2.2(d), with a payment, as applicable, by Seller or Purchaser to the other Party as follows:

(i)If the Closing Working Capital, as reduced by any Projected Working Capital Adjustment, equals the Threshold, the entire Post Closing Payment shall be paid to Seller.

(ii)If the Closing Working Capital, as reduced by any Projected Working Capital Adjustment, is less than the Threshold, the difference between the Closing Working Capital (reduced by any Projected Working Capital Adjustment) and the Threshold shall be retained by the Purchaser and the remainder, if any, of the Post Closing Payment shall be paid to Seller (and if the Post Closing Payment is inadequate to cover the difference, Seller shall pay to Purchaser any such additional required amount).

(iii)If the Closing Working Capital, as reduced by any Projected Working Capital Adjustment, is greater than the Threshold, the Purchaser shall pay to Seller the Post Closing Payment plus the amount by which the Closing

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Working Capital (as reduced by any Projected Working Capital Adjustment) exceeds the Threshold.

Section 2.3.PRORATION OF TAXES

All general real estate and ad valorem taxes applicable to the Land and Improvements shall be prorated payable for 2008 on a calendar year basis, utilizing actual final tax bills, if available prior to Closing.  If the tax bills are not available, then such taxes shall be prorated on the basis of the most currently available tax bills for the Land and Improvements and promptly re-prorated upon the issuance of final bills, and any amounts due from any party to the other shall be paid in cash at that time.   All general assessments shall be prorated as of the Closing, with Seller being responsible for any installments of general assessments which are due prior to the Closing Date and Purchaser being responsible for any installments of general assessments which are due on or after the Closing Date.  All special assessments shall be paid by Seller prior to the Closing Date.

Section 2.4.ALLOCATION OF PURCHASE PRICE.

The Purchase Price will be allocated on a mutually agreed basis by the Parties among the Purchased Assets under the residual method as described in Section 1060 of the Internal Revenue Code of 1986, as amended (the “Code”) no later than seventy-five (75) days following the Closing Date (an example of a calculation in accordance with the foregoing is attached hereto as EXHIBIT 2.4).  Purchaser and Seller further agree to report this transaction for all purposes, including any Tax reporting, in accordance with the allocation and to attach the applicable asset acquisition statement to their respective income tax returns for the taxable year of reporting this transaction.

ARTICLE 3.          CONDUCT AND TRANSACTION OF BUSINESS PRIOR TO CLOSING.

Section 3.1.ACCESS TO INFORMATION.

During the period between the date of this Agreement and Closing, Seller shall give to Purchaser and its attorneys, accountants, or other authorized representatives, all reasonable access respecting Seller’s property, personnel, books, contracts, commitments, and records and shall furnish to Purchaser during such period all information as Purchaser may reasonably request. Purchaser shall have the right to conduct on site inspections of the Business Premises, with prior approval of Seller, which shall not be unreasonably withheld.

Section 3.2.RESTRICTIONS IN OPERATION OF THE BUSINESS.

Seller represents and covenants that:

(a)Employee Obligations.  Seller has paid, and will pay at or before Closing, or thereafter in the Ordinary Course of Business, all obligations to or on behalf of Seller’s employees, including payroll for all hours worked through the Closing, all sales commissions for sales made through the Closing, all unused vacation, sick or other benefit pay, and all health insurance premium payments or other insurance premium payments, contributions or obligations, bonuses or additional compensation due to, or on behalf of, its employees for services performed, or related to employment occurring, prior to the Closing, except for the Assumed Liability as expressly reflected in the Final Working Capital Statement.  Whether or not accrued or consistent with Seller’s policies or past practice, all such

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compensation and benefits shall be deemed fully vested upon Closing for purposes of this section.

(b)Preservation of the Business.  Seller shall use their best efforts to preserve their respective business organizations and assets of the Business and not to impair relationships with customers and others having business relations with the Business.

(c)Operation of the Business.  Seller will, between the date of this Agreement and the Closing, conduct its business in the Ordinary Course of Business and will not engage in any practice, or enter into any contract outside the Ordinary Course of Business.  Without limiting the generality of the foregoing, and except as expressly provided in this Agreement, between the date of this Agreement and the Closing, the Seller will not take any action the effect of which is to materially:

(i)transfer or convert any of the Purchased Assets  directly or indirectly to the benefit of any Seller Party;

(ii)redeem, purchase or otherwise acquire its capital stock; or

(iii)diminish the Purchased Assets to be transferred hereunder to the Purchaser.

Section 3.3.NO SOLICITATION OF OTHER OFFERS.

(a)No Other Negotiations.  Other than as expressly set forth in this Agreement (as, for example, the rights of Seller to sell Millersburg assets, as provided under SECTION 1.2(d)), no Seller Party will disclose, negotiate, arrange, agree or conclude any disposal of ownership interests, or of any material assets, of Seller with any Person other than the Purchaser without the prior written consent of Purchaser until the Closing or termination of this Agreement (the “Lock-Out Period”) and, further, that they shall have, prior to execution of this Agreement, terminated all discussions which they may have entered into with any persons other than the Purchaser relating to any such disposal; provided, that this SECTION 3.3(a) shall not apply to Transactions regarding inventory of products, animals and feed consumed and sold in the Ordinary Course of Business;

(b)No Consideration of Other Offers.  For the duration of the Lock-Out Period, and except for transactions in the Ordinary Course of Business, no Seller will, except as expressly set forth in this Agreement, initiate, accept or consider any proposals from any Person other than the Purchaser for the acquisition of ownership interests in, or of any material assets of, any Seller Party, and shall not, except as expressly permitted under this Agreement, take any steps to prejudice the completion of the Contemplated Transactions.

(c)Superior Proposal.  Notwithstanding anything to the contrary in this Agreement, if:

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(i)Seller receives any contact from any Person to initiate discussions, or consider a proposal related to the acquisition of ownership interests in or material assets of, any Seller Party (an “Acquisition Proposal”), Seller shall immediately disclose to Purchaser all of the material terms and conditions of the Acquisition Proposal and the identity of the Person making the Acquisition Proposal; and

(ii)the Board of Managers of GOE determines that the Acquisition Proposal is a Superior Proposal (after taking into account any written binding offer by Purchaser to improve the terms of this Agreement in response to the Acquisition Proposal), then GOE and its representatives may:

(iii)furnish information with respect to GOE to the Person making the Acquisition Proposal (and its representatives) pursuant to a customary confidentiality agreement; and

(iv)participate in discussions or negotiations with the Person making the Acquisition Proposal (and its representatives) regarding the Acquisition Proposal.

(d)Recommendation of this Agreement.  Except pursuant to SECTION 3.3(e) below, Seller agrees that no Board nor any committee shall:

(i)(A) withdraw (or modify in a manner adverse to Purchaser), or propose to withdraw (or modify in a manner adverse to Purchaser), the recommendation or declaration of advisability by the Board of Managers or any committee of this Agreement or (B) recommend, adopt or approve, or propose publicly to recommend, adopt or approve, any Acquisition Proposal; or

(ii)approve or recommend, or propose to approve or recommend, or permit any Seller Party to execute or enter into, any letter of intent, memorandum of understanding, agreement in principle, merger agreement, acquisition agreement, option agreement, joint venture agreement, partnership agreement or other similar agreement constituting or related to any Acquisition Proposal (other than a confidentiality agreement pursuant to SECTION 3.3(c).

(e)Notwithstanding anything in this Agreement to the contrary:

(i)the Board of Managers of GOE or any committee of the Board of Managers of GOE may, as required by Law, and to the extent not in breach of this SECTION 3.3, withdraw or modify its recommendation of this Agreement (a “Change of Recommendation”), cancel or postpone any meeting of GOE members, and otherwise communicate with the members of GOE as the Board of Managers or any committee as necessary; and

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(ii)in response to a Superior Proposal that did not result from a breach of SECTION 3.3, and where the Purchaser is not willing to agree to move forward with the Contemplated Transaction on improved terms that render Purchaser’s proposal superior to the Superior Proposal, the Board of Managers of GOE may recommend that GOE terminate this Agreement pursuant to SECTION 5.3(f).  Concurrently with or after the termination, Seller may enter into any letter of intent, memorandum of understanding, agreement in principle, merger agreement, acquisition agreement, option agreement, joint venture agreement, partnership agreement or other similar agreement with respect to the Superior Proposal.

(f)Superior Proposal.  “Superior Proposal” means an Acquisition Proposal on terms and conditions which the Board of Managers of GOE determines in good faith are (considering such factors as the Board of Managers determines, in good faith, appropriate, including the likelihood of completion) are more favorable to GOE than those set forth in this Agreement.

Section 3.4.TITLE EVIDENCE.

As evidence of title to the Owned Real Property and for information purposes as to the Leased Real Property (as those terms are defined in SECTION 7.1(j)(ii)), Seller shall cause to be prepared and delivered to the Purchaser at Seller’s expense;

(a)a commitment or preliminary title report (“Title Commitment”) for the Real Property (as defined in SECTION 7.1(j)(ii)), from First American Title Insurance Company;

(b)copies of all exception documents noted in such Title Commitments; and

(c)copies of surveys in Seller’s possession for the Owned Real Property and the Leased Real Property;

(collectively, “Title Evidence”).

EXHIBIT 3.4 sets forth, according to exception number, all issues and concerns relating to the exceptions listed in the Title Commitments that Purchaser wants Seller to address prior to Closing.  All exceptions listed in the Title Commitments, other than the exceptions set forth in EXHIBIT 3.4, are the “Permitted Exceptions.”

Section 3.5.HART-SCOTT-RODINO ACT FILINGS.

Each of the Seller and the Purchaser will file a Notification And Report Form under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the “HSR Act”) with the Federal Trade Commission (“FTC”) and with DO with respect to the Contemplated Transactions. If either FTC or DOJ issues a subsequent request for information, Purchaser or Seller shall: (a) comply fully with any FTC or DOJ requests for additional information within the prescribed time periods for response; and (b) not extend any waiting period under the HSR Act without the prior written consent of the other party.  The filing fees paid to the FTC and the DOJ in conjunction with any filing under the HSR Act (the “HSR Fee”) shall be paid by the Purchaser.

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Section 3.6.NOTIFICATION OF CERTAIN MATTERS.

The Seller and Purchaser agree to provide prompt written notice to each other of, and to use their respective best efforts to prevent or promptly remedy, any material failure on its part to comply with or satisfy any covenant, condition or agreement, to be complied with or satisfied by it under this Agreement; provided, however, that the delivery of any notice pursuant to this SECTION 3.6 shall not be deemed to amend or supplement any exhibit or schedule attached hereto, to prevent or cure any misrepresentations, breach of warranty or any breach of covenant or to limit or otherwise affect the remedies available to the Party receiving the notice.

Section 3.7.RISK OF LOSS.

Seller assumes all risk of destruction, loss, or damage to the Purchased Assets due to fire, storm, or other casualty up to the Closing. If any destruction, loss, or damage to the Purchased Assets is such that the Business of Seller is interrupted, curtailed or materially affected prior to the Closing, then the Party becoming aware of such destruction, loss or damage shall provide the other Party hereto written notice.  Within ten (10) days of the receipt of such notice, the Parties shall meet to discuss such destruction, loss, or damage, and the availability of insurance to cover such destruction, loss or damage.  Purchaser shall have the following rights:

(a)Rescission.  Rescind this Agreement, and all rights and obligations of each of the Parties to each other Party shall terminate; or

(b)Assignment of Benefits.  Proceed to Closing and accept from Seller an assignment of all insurance proceeds payable in connection with the destruction, loss or damage together with a reduction in the Purchase Price equal to the amount of any deductible, co-insurance or self-insurance retained by Seller.

Section 3.8.PUBLIC STATEMENTS.

Except as required by Law and as provided in SECTION 3.9, no public release, announcement or other form of publicity or disclosure to any third party concerning this Agreement or the Contemplated Transactions shall be issued by any Party without the prior written consent of all other Parties; provided, however, that: (a) Purchaser or Seller may contact material customers, vendors and creditors in order to arrange for the smooth transition of the Business to Purchaser and continuation of the Business following the Closing and to obtain written consent to assign the Contracts to Purchaser; and (b) Purchaser may announce the signing and completion of the transaction, and GOE may, as required for compliance with GOE’s Securities and Exchange Commissions (“SEC”) reporting obligations, disclose this Agreement and the Contemplated Transactions in connection with the preparation and distribution of the proxy statement to GOE’s members and solicitation of GOE member approval, as further described in SECTION 3.10, and make necessary filings as required for SEC reporting compliance.

Section 3.9.GOE AND MIDWEST MEMBER APPROVAL.

GOE and Midwest, respectively, shall promptly after the date of this Agreement give all required notices and take all action necessary to (i) notify its members of a special meeting to seek approval of the Contemplated Transactions and (ii) to mail to its members information relevant to their vote, as required under applicable Law.  Subject to SECTION 3.3, the Board of Managers of GOE and Midwest shall, respectively:

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(a)promptly and duly call, give notice of, convene and hold a special meeting of its members, in the case of GOE, within 21 days after receipt of approval by the SEC of the Proxy Statement to be distributed to GOE’s members for the purpose of obtaining approval of the transactions contemplated under this Agreement;

(b)recommend to its members approval of the Contemplated Transactions under this Agreement; and

(c)take all commercially reasonable action to solicit and obtain member approval, subject to SECTION 3.3.

Section 3.10.DISCLOSURE SCHEDULES; NOTICE OF DEVELOPMENTS.

From and after the date of this Agreement until ten (10) days prior to the Closing, Seller shall promptly notify Purchaser by written notice, of any development causing a breach of any of the representations or warranties set forth in SECTION 7.1.  Purchaser shall have the remedies available to Purchaser under this Agreement, which shall include, without limitation, termination of this Agreement pursuant to SECTION 5.3(d) by reason of the development.  Unless this Agreement is terminated by Purchaser, as permitted by the foregoing provisions, the written notice pursuant to this SECTION 3.10 shall amend the Disclosure Schedules, to have qualified the representations and warranties contained under SECTION 7.1.  Each Party shall promptly provide the other Party with written notice of any set of facts and circumstances that cause any of the representations and warranties of either party to be false or inaccurate.  Updates to the Merrill Datasite, as such term is defined in SECTION 4.2(m), added for the first time after the date of this Agreement, shall constitute written notice under this SECTION 3.10; provided, that upon request, the party receiving notice shall be entitled to request and receive a clarification as to the specific disclosures being amended under ARTICLE 7 hereof.

ARTICLE 4.CLOSING.

Section 4.1.CLOSING.

(a)Closing Date.  The closing of the Contemplated Transactions (“Closing”) shall take place on the later of (i) December 31, 2008; (ii) five (5) Business Days after the expiration of the waiting period for Hart-Scott-Rodino, (iii) five Business Days after GOE and Midwest have obtained member approval under SECTION 3.10 for the transaction, iv) a date following completion of an extension under SECTION 5.1(J), or v) a date as shall be mutually agreed upon by the Parties in writing.  For purposes of the calculations reflected on the Final Working Capital Statement, the Closing shall be deemed to be effective at 11:59 p.m. on the date of Closing.  The transfer of title to the Purchased Assets shall be effective immediately upon completion of the deliveries required pursuant to this ARTICLE 4 and the satisfaction or waiver of the conditions described in ARTICLE 5.

(b)Closing Location.  The Closing shall take place at or about 9:00 a.m. Central Standard Time or another place or time as the Parties may agree.

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Section 4.2.DOCUMENTS TO BE DELIVERED BY SELLER.

Seller agrees to deliver the following documents, in form and substance reasonably satisfactory to the Parties and their respective counsel, duly executed as appropriate, to Purchaser at the Closing:

(a)Corporate Documents.

(i)Articles of Incorporation or Articles of Organization, as the case may be, of each Seller Party, certified by the Secretary of State of its state of incorporation or organization;

(ii)Certificates of Existence or Good Standing, as applicable, from the each state in which an individual Seller Party was formed or organized, dated no earlier than ten (10) days prior to the Closing; and

(iii)Bylaws or Operating Agreement, as the case may be, of each Seller Party certified by such Seller Party’s secretary or manager, as the case may be; and

(iv)Certificates of Existence or Good Standing of each Seller Party issued by the appropriate governmental official of each state in which each Seller Party is registered as a foreign corporation or limited liability company, as the case may be, dated no earlier than ten (10) days prior to the Closing.

(b)Authorizing Resolutions.  Certified copy of resolutions of the shareholders and directors or the members and manager, as the case may be, of each Seller Party, authorizing each Seller Party to enter into this Agreement and to consummate the Contemplated Transactions;

(c)Bill of Sale.

Bill of Sale for the assignment and transfer of the Purchased Assets in substantially the form of EXHIBIT 4.2(C);

(d)Assignments; Consents.  Appropriate assignment documents assigning Seller’s right, title and interest in the Receivables, Intangible Property, Intellectual Property, Trade Rights, Licenses and Permits, Franchises, Contracts and Contract Rights, Advertising Materials, Prepaid Assets, Shares and Securities, and Other Assets including written consent to the assignments, if required by the terms thereof, in substantially the form prepared by Purchaser and submitted to Seller on or before December 1, 2008;

(i)Consents to the registration by Purchaser of each of the assumed names used by the Business in form for filing in all jurisdictions where required by the nature of the Business as prepared by Purchaser and submitted to Seller prior to Closing.

(ii)Consents by each contracting Party to the assignment by Seller, and the assumption by Purchaser, of Seller’s obligations with respect to each of

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the Assumed Liabilities, in substantially the form prepared by Purchaser and submitted to Seller on or before December 1, 2008;

(iii)Assignment documents in a form reasonably acceptable to Purchaser, by all individuals or entities who engaged in development efforts with respect to the Intellectual Property;

(e)Warranty Deed.  General Warranty Deeds, in recordable form, conveying the Land and the Improvements to Purchaser, free and clear of all liens, claims and encumbrances except for the Permitted Exceptions.

(f)Title Commitment.

A commitment for title insurance in accordance with SECTION 3.4, issued by First American Title Insurance Company, with standard and general printed exceptions (excluding only the Permitted Exceptions) deleted so as to afford full extended form coverage, and including endorsements reasonably requested by Purchaser.  Seller shall have provided all documents requested by the title company.

(g)Motor Vehicles.  Certificates of title for all vehicles included in the Purchased Assets, duly endorsed for transfer to Purchaser.

(h)Bring-down Certificate.  Certificate of an officer of Seller regarding representations and warranties as required under SECTION 5.1(a);

(i)Opinion of Counsel.  Opinion of counsel for Seller as required under SECTION 5.1(b);

(j)Release of Liens.  Termination Statement, Satisfaction, or Release, executed by the secured party and in form for filing for every UCC-1 Financing Statement on file with any state or local filing authority naming Seller as debtor party and claiming an interest in any of the Purchased Assets.

(k)Tax Compliance.  Certification from the appropriate government official(s) in each state in which the Purchased Assets are located that Seller has complied with its obligations relating to sales and use taxes, that no liens have been filed with respect to any such taxes, and that Purchaser is not required to withhold any portion of the Purchase Price to pay such taxes;

(l)Foreign Person Certificate.  Seller shall provide a certificate, 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;

(m)Merrill DataSite Database.  Seller shall provide to Purchaser a full and complete copy of the Merrill DataSite Database for the “Tomcat 2008” Project the (“Merrill Datasite”), as made available to Purchaser in its due diligence process, in a form accessible and readable by Purchaser;

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(n)Agreements with Potential Acquirers.  Seller shall deliver copies of all confidentiality and nondisclosure agreements executed with Potential Acquirers, all of which shall be assigned to Purchaser at Closing; and

(o)Other Documents.  Other documents as Purchaser may reasonably request to carry out the transaction contemplated under this Agreement, as prepared by Purchaser at their sole cost and expense.

Section 4.3.DOCUMENTS TO BE DELIVERED BY PURCHASER.

Purchaser agrees to deliver the following documents, in form and substance reasonably satisfactory to the Parties and their respective counsel, duly executed as appropriate, to Seller at the Closing:

(a)Authorizing Resolutions.  A copy of the corporate resolutions of the directors of Purchaser, authorizing Purchaser to enter into this Agreement and to consummate the Contemplated Transactions;

(b)Payment.  Payment of the Purchase Price in the amount and form as required by SECTION 2.1(a) hereof;

(c)Bring-down Certificate.  Certificate of an officer of Purchaser regarding representations and warranties as required under SECTION 5.2(a);

(d)Opinion of Counsel.  Opinion of counsel for the Purchaser as required under SECTION 5.2(b);

(e)Other Documents.  Other documents as Seller may reasonably request to carry out the transaction contemplated under this Agreement, as prepared by Seller at their sole cost or expense.

ARTICLE 5.CONDITIONS OF CLOSING; ABANDONMENT OF TRANSACTION.

Section 5.1.CONDITIONS TO OBLIGATION OF PURCHASER TO PROCEED ON THE CLOSING.

The obligations of Purchaser to proceed on the Closing shall be subject to the satisfaction, on or prior to the Closing, of all of the following conditions, any of which may be waived by Purchaser in its sole discretion:

(a)Accuracy of Representations; Certificate of Officer.  The representations and warranties of Seller contained in this Agreement are true in all material respects both at the signing of this Agreement and as of the Closing, and Seller has fulfilled and performed all obligations and complied with all covenants and conditions prior to or as of the Closing. Seller shall have delivered to Purchaser certificates in form and substance satisfactory to Purchaser dated as of the Closing and executed by an officer of Seller to all such effects.

(b)Opinion of Counsel.  Purchaser shall have received a duly executed opinion letter from Stoel Rives LLP, legal counsel for the Seller, in the form of EXHIBIT 5.1(b),

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dated as of the Closing, in form and substance reasonably satisfactory to Purchaser and its counsel, to the effect that:

(i)Each Seller Party is validly existing under the Laws of its state of organization or incorporation and possesses all necessary power to enter into this Agreement and consummate the Contemplated Transactions.

(ii)This Agreement and all Ancillary Documents have been duly and validly authorized, executed, and delivered by Seller, constitute the legal, valid and binding obligations of each Seller Party and are enforceable in accordance with their respective terms, except as limited by bankruptcy and insolvency Laws, by other Laws affecting the rights of creditors generally and by general principles of equity.

(iii)Neither the execution and delivery of this Agreement, nor the consummation of the Contemplated Transactions, will constitute a violation of either the Articles of Incorporation or Bylaws, or the Articles of Organization or Operating Agreement of any Seller Party.

In giving the opinion, counsel may rely, as to matters of fact, upon certificates of public officials and certificates of officers of Seller.

(c)Release of Secured Claims and Mortgages.  Seller shall have obtained full and complete releases of all liens, security interests, or other encumbrances upon the Purchased Assets except for those arising solely from the Assumed Liabilities.

(d)Required Consents.

All required consents shall have been obtained from governmental agencies whose approval is required to consummate the Contemplated Transactions, and from each Person whose consent is required to consummate the Contemplated Transactions.

(e)Change of Name; Use of Tradenames.  Seller shall have prepared and submit to Purchaser for filing, or Seller shall prepare and file, effective as of Closing, suitable documents amending Seller’s Articles of Incorporation or Organization to change Seller’s name to a name dissimilar to its present name and any other trade name transferred pursuant to this Agreement.  Seller shall have taken all requisite actions to permit Purchaser to file certificates of assumed names for, and to use the tradename “Golden Oval Eggs,” and each tradename used by Seller, in all states where the failure to register and possess the right to use the names would have an adverse effect on the Business.

(f)Delivery of Documents.  Seller shall have delivered all documents required to be delivered at Closing pursuant to SECTION 4.2.

(g)Litigation Affecting Closing.

No suit, action or other proceeding shall be pending or threatened by or before any court or governmental agency in which it is sought to restrain or prohibit or to

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obtain damages or other relief in connection with this Agreement or the consummation of the Contemplated Transaction, and no investigation likely to eventuate in any such suit, action or proceeding seeking to restrain or prohibit or to obtain damages or other relief in connection with this Agreement shall be pending or threatened.

(h)Legislation.  Between signing of this Agreement and Closing, no statute, rule, regulation, or order shall have been enacted, entered, or deemed applicable by any domestic or foreign government or governmental or administrative agency or court which would make the transaction contemplated by this Agreement illegal or otherwise have materially and adversely affected the Purchased Assets or the use and operation of the Business in the hands of Purchaser.

(i)Material Adverse Change.  The Purchaser shall not become aware of an event, change, or occurrence which, individually or together with any other event, change or occurrence, has or may be reasonably likely to have a material adverse effect on the financial position, Business, Land, Improvements,, Purchased Assets, results of operations or value of the Seller’s Business, and no event has occurred or circumstances exist that may result in a material adverse effect.

(j)Employment.

Not less than twenty (20) Business Days prior to the Closing, Seller shall have permitted Purchaser reasonable access to Seller’s employees during regular business hours for purposes of interviewing, offering employment, conducting pre-employment drug testing, completing pre-employment documents and explaining Purchaser’s employee rules and benefits.  In the event more than ten percent (10%) of Seller’s employees fail any such pre-employment screening, Purchaser shall have the right to delay the Closing for up to thirty (30) days in order to put sufficient staffing in place to run the Business after Closing.

(k)United Mills.  Purchaser shall obtain assurances, to its reasonable satisfaction, which includes an executed operating agreement that sets forth these terms, that it will obtain the benefits of Seller’s ownership interest in and to United Mills, including, without limitation, documentation sufficient to demonstrate Purchaser’s rights, after Closing, to gain the benefit of the grind, mix and delivery commitments for animal feed from the United Mills feed mill at cost, and otherwise on the same terms as currently maintained by Seller.

(l)Grain Handling Contracts and Egg Supply Agreements.  Purchaser shall have entered into grain contracts providing for the delivery of grain to the Renville, Minnesota and the Thompson, Iowa facilities, as well as a contract with MoArk ensuring the supply of shell eggs for the Neosho and California facilities to be effective as of and after the Closing, all in a form reasonably satisfactory to Purchaser.

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(m)Title Evidence.  Purchaser shall have received the Title Evidence, and shall have received revised copies of the Title Commitments, containing only the Permitted Exceptions.

(n)HSR Act.  The waiting period required by the HSR Act shall have expired or terminated.

(o)Completion of Thompson Treatment Facility and Certain Environmental and Safety Improvements.  Seller shall have substantially completed the construction of the wastewater treatment facility improvements, excluding only final grading, in Thompson, Iowa, to the satisfaction of Purchaser, as required under (but notwithstanding the dates specified in) Seller’s Consent Agreement with the State of Iowa (the “Thompson Facility Improvements”).  Seller shall have also substantially completed the environmental and safety activities described in EXHIBIT 5.1(O) hereto (the “Safety/Environmental Improvements”).

Section 5.2.CONDITIONS TO OBLIGATIONS OF SELLER TO PROCEED ON THE CLOSING.

The obligation of Seller to proceed on the Closing shall be subject to the satisfaction, on or prior to the Closing, of all of the following conditions, any of which may be waived by Seller in their sole discretion:

(a)Accuracy of Representations; Certificate of Officer.  The representations and warranties of Purchaser contained in this Agreement are true in all material respects both at signing and as of the Closing and Purchaser has fulfilled and performed all obligations and complied with all covenants and conditions prior to or as of the Closing. Purchaser shall have delivered to Seller a certificate in form and substance satisfactory to Seller dated as of the Closing and executed by an officer of Purchaser to all such effects.

(b)Opinion of Counsel.  Seller shall have received a duly executed opinion letter from Purchaser’s counsel, dated as of the Closing, in form and substance reasonably satisfactory to Seller and its counsel, to the effect that:

(i)Purchaser is a corporation validly existing and in good standing under the Laws of the State of Iowa, and has all necessary corporate power to enter into this Agreement and consummate the Contemplated Transactions.

(ii)This Agreement and all Ancillary Documents have been duly and validly authorized, executed, and delivered by Purchaser, constitute the legal, valid and binding obligations of Purchaser, and are enforceable in accordance with their terms, except as limited by bankruptcy and insolvency Laws, by other Laws affecting the rights of creditors generally and by general principles of equity.

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(iii)Neither the execution nor delivery of this Agreement, nor the consummation of the Contemplated Transactions, will constitute a violation of Purchaser’s Articles of Incorporation or Bylaws.

In giving the opinion, counsel may rely, as to matters of fact, upon certificates of public officials.

(c)Delivery of Documents.  Purchaser shall have delivered all documents to be delivered at Closing pursuant to SECTION 4.3 hereof.

(d)Legislation.  No statute, rule, regulation, or order shall have been enacted, entered, or deemed applicable by any domestic or foreign government or governmental or administrative agency or court which would make the transaction contemplated by this Agreement illegal.

(e)HSR Act.  The waiting period required by the HSR Act shall have expired or terminated.

(f)GOE and Midwest Member Approval.  The transactions contemplated in this Agreement shall have been approved by the members of GOE and Midwest at special meetings duly called and held for such purposes in accordance with applicable Law and, respectively, GOE’s and Midwest’s governing documents.

Section 5.3.TERMINATION OF AGREEMENT.

This Agreement and the Contemplated Transactions may be terminated at or prior to the Closing as follows:

(a)Mutual Agreement.  By the mutual written agreement of Sellers and Purchaser;

(b)Expiration Date.  By Seller or Purchaser if the Closing shall not have taken place on or before April 1, 2009 (or such later date as is agreed upon, in writing, by Purchaser and Seller); provided, however, that if the terminating party has failed to fulfill any obligation under this Agreement or is in breach of any representation or warranty under this Agreement, and such failure or breach was the cause of or resulted in the failure of the Closing to occur on or before that date, then this Agreement shall be considered a termination for breach by the non-terminating Party under SECTION 5.3(d);

(c)Government Order.  By Seller or Purchaser if any court of competent jurisdiction or other governmental authority shall have issued an order, decree or ruling or taken any other action restraining, enjoining or otherwise prohibiting the consummation of the Contemplated Transactions;

(d)Breach.  By Seller or Purchaser, 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 20 Business Days after the date written notice of the breach is

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delivered by the Party claiming the default or breach to the Party in default or breach; or

(e)Material Adverse Effect.  By Purchaser 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.

(f)Superior Proposal.  By GOE, to the extent permitted by SECTION 3.3(d), if at any time before the Closing all of the following conditions are met:

(i)the GOE Board of Managers recommends to the members of GOE that they enter into an agreement with respect to a Superior Proposal, and Sellers notify Purchaser in writing that they intend to enter into an agreement, attaching a summary of the material terms of the proposal; and

(ii)Purchaser does not make, within 30 Business Days after the receipt of GOE’s written notification of its intention to enter into a binding agreement for a Superior Proposal, a written offer that is at least as favorable as the Superior Proposal.  To the extent the 30-day period in this SECTION 5.3(f) extends beyond the Termination Date determined under other sections of this Agreement, the Termination Date shall be extended until the end of the 30 day period in this SECTION 5.3(f).

(g)Member Approval.  By GOE, if GOE does not receive the requisite member approval after special meeting duly called and held for approving the Agreement and the Contemplated Transactions in accordance with applicable Law GOE’s governing documents.

(h)Notice of Termination.  Any termination pursuant to this SECTION 5.3 (other than a termination pursuant to SECTION 5.3(a)) shall be effected by written notice from the terminating party to the other parties, which notice shall specify the section pursuant to which this Agreement is being terminated.

Section 5.4.CONSEQUENCES OF TERMINATION.

In the event of termination of this Agreement pursuant to SECTION 5.3(a) or SECTION 5.3(c), neither Party shall have any other liability to the other Party under this Agreement.  SECTION 5.5 of this Agreement sets forth the exclusive remedies for any termination of this Agreement under SECTION 5.3 prior to Closing.  In any event, after any termination under this ARTICLE 5, and conditioned upon full compliance with the terms of SECTION 5.5., including the making of any payments required therein, the Parties shall have no further liability or obligations under this Agreement, except that all obligations of the Parties under the following sections shall survive any such termination: SECTION 5.5, 3.9 (Public Statements), 10.14 (Expenses), 10.15 (Publicity), and 10.2 (Applicable Law; Jurisdiction).

Section 5.5.REMEDY UPON TERMINATION.

In the event this Agreement is terminated by either party under this ARTICLE 5, the following shall be the exclusive remedies for such termination:

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(a)Seller Remedies.  In the event this Agreement is terminated by Seller pursuant to a breach by Purchaser under SECTION 5.3(d) [Breach], Purchaser shall pay to Seller, as Seller’s sole and exclusive remedy under this Agreement, all of Seller’s direct out of pocket expenses incurred in pursuit of the Contemplated Transactions, subject to an aggregate maximum sum of $500,000.00.

(b)Purchaser Remedies.  In the event this Agreement is terminated:

(i)by Purchaser due to a breach by Seller under SECTION 5.3(d) [Breach], or

(ii)by Seller under SECTION 5.3(e) [Material Adverse Effect], or

(iii)by Seller under SECTION 5.3(f) [Superior Proposal],

GOE shall pay to Purchaser, as Purchaser’s sole and exclusive remedy under this Agreement (except for any payment that may be due to Purchaser under SECTION 5.5(c)) an amount equal to its direct out of pocket expenses incurred in pursuit of the Contemplated Transactions, subject to an aggregate maximum sum of $500,000.00.

(c)Topping/Termination Fee.  In the event of a termination of this Agreement (except for a Excluded Termination as defined in this SECTION 5.5(c)) and within six (6) months after the date of such termination, either Seller or one or more Seller Party signs a letter of intent or other agreement relating to the acquisition of a material portion of the Purchased Assets, shares, membership interests or Business with any Person who made an Acquisition Proposal prior to such termination, or with any Potential Acquirer, as defined under SECTION 7.1(s) and such transaction is ultimately consummated, then, immediately on the closing of such transaction, GOE shall pay the Purchaser an additional payment of:

(i)Four Million Dollars ($4,000,000.00) in the event that the purchase price in such transaction exceeds the dollar amount of the payment to Seller under SECTION 2.1, reduced by any payment previously made under SECTION 5.5(b), or

(ii)Five Hundred Thousand Dollars ($500,000.00) in the event that the purchase price in such transaction is less than the dollar amount of the payment to Seller under SECTION 2.1, reduced by any payment previously made under SECTION 5.5(b).

Excluded Termination means a termination by Seller under SECTION 5.3(d) [Breach] resulting from an uncured breach by Purchaser, or a termination of this Agreement by Purchaser under SECTION 5.3(b) [Expiration Date], a termination by mutual agreement under SECTION 5.3(a) [Mutual Agreement], or a termination under SECTION 5.3(c) [Government Order].

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ARTICLE 6.POST-CLOSING OBLIGATIONS.

Section 6.1.FURTHER DOCUMENTS AND ASSURANCES.

At any time and from time to time after the Closing, each Party shall, upon request of another Party, execute, acknowledge, and deliver all such further and other assurances and documents, and will take such action consistent with the terms of this Agreement, as may be reasonably required to carry out the Contemplated Transactions and to permit each Party to enjoy its rights and benefits hereunder. If requested by Purchaser, Seller further agrees to prosecute or otherwise enforce in its own name for the benefit of Purchaser any claim, right, or benefit transferred by this Agreement that may require prosecution or enforcement in the names of Seller. Any prosecution or enforcement of claims, rights, or benefits under this provision shall be solely at Purchaser’s expense, unless the prosecution or enforcement is made necessary by a breach of this Agreement on the part of Seller.

Section 6.2.COLLECTION OF RECEIVABLES.

Seller shall assist Purchaser after the Closing in the collection of Receivables generated by the Business.  All payments received by the Seller after the Closing in payment of such Receivables shall be forwarded by Seller to Purchaser.  All amounts received by Purchaser after Closing shall be applied to the oldest outstanding Receivable unless the customer shall specifically identify a different application.  Purchaser shall promptly notify Seller of any issue or defense raised by any customer with respect to an outstanding Receivable and allow Seller access to the customer for purposes of resolving the same.  With respect to each account for which Seller undertakes assistance in collection activity, Seller shall consult with Purchaser and shall use their best reasonable efforts not to harm the business relationship between Purchaser and such customer.

Section 6.3.ACCESS TO INFORMATION.

Seller may need access to information relating to the Business acquired by Purchaser after Closing Date including financial and accounting information for the preparation of tax returns, Form K-1’s, payments and filings related to payroll taxes, and final W-2’s, and information for workers compensation audits, payroll audits, insurance audits, distributor allowances, royalty payments, customer deductions, sales commissions, incentive pay calculations for Employees, and supplier rebates.  Seller acknowledges Purchaser’s need to maintain biosecurity at the facilities and confidentiality of the business operation information.  Recognizing the concerns of Purchaser and Seller, the Parties agree that upon reasonable request, Purchaser shall, at or after Closing, provide Seller, at Seller’s cost, requested information about the Business reasonably necessary to determine any matter relating to or arising during the period ending on or before the Closing.  If Purchaser cannot or chooses not to provide the requested information, then upon reasonable request by Seller, Purchaser may provide Seller or its agents access to necessary books and records of the Business, subject to reasonable restrictions, including biosecurity, confidentiality and procedures to avoid interference with Purchaser’s operation, established by Purchaser.  If GOE desires records, GOE shall notify Purchaser, and Purchaser shall provide copies to the Sellers, or make available access to such document to Seller upon Seller agreeing to pay for all costs associated with collecting such documents, including, without limitation, the reasonable duplication expenses; provided, however, Purchaser agrees to use commercially reasonable efforts not to destroy any books and records received from Seller under this Agreement during the one year period following the Closing Date.  Notwithstanding anything

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contained in this Agreement, the parties agree that GOE is subject to a subpoena and an ongoing investigation by the DOJ (the “Subpoena”) and an investigation by the Attorney General of the State of Florida (the “Investigation Demand”).  Seller shall be solely and exclusively responsible for all obligations under the Subpoena and the Investigation Demand, including any ongoing obligations to produce documents, preservation of documents Seller deems applicable, and any other obligations related to the Subpoena.

Section 6.4.SELLER’S EMPLOYEES.

Purchaser anticipates offering employment effective as of the Closing to a substantial portion of the employees of Seller (“Seller’s Employees”) on terms and conditions, including base salary, which is substantially similar to Seller’s Employees’ current base salary, and benefits which are substantially similar to similarly situated employees of Purchaser.  Purchaser shall make such offers on or before the Closing Date, and conditioned upon the successful completion of the Closing.  Seller makes no representation as to whether Employees will accept employment with Purchaser, but Employees who accept employment with Purchaser shall be known as the “Hired Employees”.  Purchaser reserves the right to implement all of its normal pre-hiring conditions and to offer employment on such terms and conditions as it determines in its sole discretion.  No provision in this Agreement shall create any third party beneficiary or other right in any Person for any reason, including, without limitation, in respect of continued, resumed or new employment with Purchaser or Seller.  The Seller shall remain liable for all Liabilities to Seller’s employees for the period prior to and through the completion of the Closing including those arising under Seller’s benefit and compensation plans, except as expressly reflected in the Final Working Capital Statement.

Subject to the Closing occurring, Seller shall cease to employ Seller’s Employees effective as of the Closing Date, and the Purchaser shall then immediately become the employer of the Hired Employees.  Purchaser agrees that it will offer employment to at least 74 of Seller’s employees at the Renville location, at least 158 of Seller’s employees at the Thompson location, at least 62 of Seller’s employees at the California locations, and at least 56 of Seller’s employees at the Abbeville location.  Purchaser shall cause each Hired Employee and his or her spouse and eligible dependents to be covered or offered coverage, effective immediately upon the Closing Date, under a group health plan maintained by Purchaser or an Affiliate of Purchaser that provides medical, prescription drugs, vision and dental benefits.

Purchaser shall take such actions as are necessary to cause the employee benefit plans and compensation programs maintained by Purchaser to grant credit for each Hired Employee’s service with Seller for all purposes under such plans and programs, including, but not limited to for purposes of eligibility, benefit accrual (other than benefit accruals under a defined benefit pension plan), contribution rates and for purposes of determining the amount of, and entitlement to, benefits.

ARTICLE 7.REPRESENTATIONS AND WARRANTIES.

Section 7.1.REPRESENTATIONS AND WARRANTIES OF SELLER.

Except as specifically set forth on the Disclosure Schedule attached as EXHIBIT 7.1, each Seller Party jointly and severally makes the following representations and warranties to Purchaser with the intention that Purchaser may rely upon the same and acknowledge that the same shall be true

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on the date hereof (unless specified as being true only at Closing) and as of the Closing (as if made at the Closing).  The Disclosure Schedule shall be arranged in separate schedules corresponding to the numbering of this SECTION 7.1.

(a)Organization.  GOE is a limited liability company duly organized, validly existing and in good standing under the Laws of the State of Delaware, and has all requisite power and authority, and possesses all necessary licenses, permits, franchises and approvals necessary to own and lease its properties and assets and to conduct the business in which it is presently engaged.   GOEMCA is a corporation duly organized, validly existing and in good standing under the Laws of the state of Delaware, and has all requisite power and authority, corporate and otherwise, and possesses all necessary government licenses, permits, franchises and approvals necessary to own and lease its properties and assets and to conduct the business in which it is presently engaged.  GOECA is a limited partnership duly organized, validly existing and in good standing under the Laws of the state of Delaware, and has all requisite power and authority, corporate and otherwise, and possesses all necessary government licenses, permits, franchises and approvals necessary, to own and lease its properties and assets and to conduct the business in which it is presently engaged.  GOECA is a limited partnership duly organized, validly existing and in good standing under the Laws of the state of Delaware, and has all requisite power and authority, corporate and otherwise, and possesses all necessary government licenses, permits, franchises and approvals necessary to own and lease its properties and assets and to conduct the business in which it is presently engaged.  Midwest is a cooperative association organized under Chapter 501 of the Iowa Code, is duly organized, validly existing and in good standing under the Laws of the state of Iowa, and has all requisite power and authority, corporate and otherwise, and possesses all necessary government licenses, permits, franchises and approvals necessary to own and lease its properties and assets and to conduct the business in which it is presently engage.

(b)Qualification.  Each Seller Party is qualified to do business and in good standing as a foreign corporation in all states in which qualification is required by the nature of its business and in which the failure to so qualify and be in good standing would have a material adverse effect on the Business. Each Seller Party has identified all such states on SCHEDULE 7.1(b).

 (c)Corporate Authority.  This Agreement and all Ancillary Documents constitute the legal, valid, and binding obligation of each Seller Party in accordance with the terms hereof and thereof.  The execution, delivery, and performance of this Agreement and the Ancillary Documents on behalf of each Seller Party has been duly authorized by, as applicable, the Board of Managers, Board of Directors, or the General Partner of each, and as of the Closing all necessary shareholder or member approval shall have been obtained for each Seller Party for the Contemplated Transactions.

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(d)Financial Statements.

(i)GOE has delivered to Purchaser or otherwise made available to Purchaser through filings with the SEC the audited consolidated balance sheets and the related consolidated statements of earnings, of member’s equity and of cash flows of GOE and its consolidated subsidiaries, for the fiscal years ended August 31, 2005, August 31, 2006, and August 31, 2007 and the unaudited consolidated balance sheet for the quarter ended May 31, 2008 (including the notes thereto), accompanied by the report of Moore Stephens Frost, independent registered public accounting firm (collectively, the “Business Financial Statements”);

(ii)Except as set forth in PARAGRAPH 7.1(d)(ii) of the Disclosure Schedule:

(A)the Business Financial Statements (in each case including the notes to the Business Financial Statements) were prepared from the books and records of Seller and in accordance with GAAP, consistently applied, and include the “Statement of Changes in Financial Condition” as required by GAAP; and

(B)the Business Financial Statements fairly and accurately present, in all respects, the financial activity of the Business and the results of operations of Seller, as well as the assets and Liabilities and results of operations of Seller as of the respective dates thereof and for the periods then ended and do not exclude any information the omission of which would be misleading.  During the periods represented by the Business Financial Statements, Seller has made no change in any of its accounting policies or practices.

(e)Books and Records.  Except as set forth on SCHEDULE 7.1(e), Seller’s books of account and records (including customer order files, employment records, and sales, production, and manufacturing records) are complete, true, and correct in all material respects.

(f)Tax Reports, Returns, and Payment.

(i)Seller has accurately prepared and timely filed all federal and applicable state, and local, tax or assessment reports and returns of every kind required to be filed by Seller with relation to the Business, including without limitation, income tax, sales and use tax, real estate tax, personal property tax, payroll and employee withholding tax, and unemployment tax, and has duly paid all taxes and other charges (including interest and penalties) due to or claimed to be due by any taxing authorities (“Taxes”). Seller is not the beneficiary of any extension of time in which to file Tax Returns.  No material claim has ever been made by an authority in a jurisdiction where Seller does not file Tax Returns that it is or may be subject to taxation by that jurisdiction. There are no tax liens for taxes upon any property or assets of Seller.  Where required, timely estimated payments or installment payments of Tax Liabilities have been made to all

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governmental agencies in amounts sufficient to avoid underpayment penalties or late payment penalties applicable thereto.

(ii)Seller has promptly paid and is not delinquent with respect to payment of any Taxes, duties, and charges based on the income, purchases, sales, business, payroll, real estate, capital stock or surplus, or assets of Seller.

(iii)Seller has withheld and paid all Taxes required to have been withheld and paid in connection with any amounts paid or owing to any employee, independent contractor, creditor, stockholder, or other third party.

(iv)There are no disputes with any governing authority as to Taxes payable by or with respect to Seller.

(v)There are no audits by any governing authority presently pending as to Taxes payable by or with respect to Seller and no such audits have been performed within the two (2) most recent years.

 (g)Title to Assets.  Except as set forth in PARAGRAPH 7.1(g) of the Disclosure Schedule, Seller holds title to the Purchased Assets free and clear of all liens, claims, encumbrances, licenses or leases, (subject only to the Permitted Exceptions) and Purchaser shall have the right to take possession of the Purchased Assets immediately after Closing.

(h)Purchased Assets.  Except as set forth on PARAGRAPH 7.1(h) of the Disclosure Schedule, the Purchased Assets include all of the assets used by Seller in the conduct of the Business, respectively.

(i)Real Property.

(i)Seller is the owner of the Land and the Improvements.

(ii)Paragraph 7.1(i)(ii) of the Disclosure Schedule sets forth the address and legal description of each parcel of real property owned by Seller (and comprising “Land”, hereinafter “Owned Real Property”) as well as the address and legal description of each parcel of leased real property (the “Leased Real Property”) used in, or related to, the Business (the Owned Real Property and the Leased Real Property are hereinafter collectively, the “Real Property”) and such Real Property comprises all of the real property used or proposed to be used in, or related to, the Business.

(iii)Paragraph 7.1(i)(ii) of the Disclosure Schedule also sets forth a true and complete list of all leases, subleases, licenses, concessions and other agreements, written or oral (including all amendments, extensions, renewals, guaranties and other agreements related thereto, collectively, the “Leases”) for each parcel of Leased Real Property.  The Seller Parties have provided to the Purchaser a copy of all of the Leases, and in the case of any oral Lease, a written summary of the materials and terms thereof.

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With respect to each such Lease:

(A)such Lease is legal, valid, binding, enforceable and in full force and effect;

(B)Sellers’ possession and quiet enjoyment of the Leased Real Property under such Lease has not been disturbed and there are no disputes with respect to such Lease;

(C)neither Seller nor any other party to the Lease is in breach or default under such Lease, and no event has occurred or circumstance exists which, with the delivery of notice, the passage of time or both, would constitute such a breach or default, or permit the termination, modification or acceleration of rent under such Lease;

(D)no security deposit or portion thereof deposited with respect to such Lease has been applied in respect of a breach or default under such Lease which has not been re-deposited in full;

(E)Sellers have not subleased, licensed or otherwise granted any Person the right to use or occupy such Leased Real Property or any portion thereof;

(F)Sellers have not collaterally assigned or granted any other lien, security interest, mortgage or any other encumbrance in such Lease or any interest therein; and

(G)there are no liens, security interests, mortgages or any other encumbrances on the estate or interest created by such Lease, except for the Permitted Exceptions.

(iv)The Owned Real Property and the Leased Real Property (collectively, the “Real Property”) comprise all of the Real Property used or proposed to be used in, or related to, the Business.

(v)Except as disclosed in Paragraph 7.1(i)(v) of the Disclosure Schedule, Seller has, or at Closing will have (A) good, valid and marketable fee title to the Owned Real Property; and (B) valid leasehold interests in the Leased Real Property, in each case, free and clear of all encumbrances, except for the Permitted Exceptions.

(vi)To the Knowledge of Seller, all buildings, structures, fixtures, building systems and equipment, and all components thereof, including the roof, foundation, load-bearing walls and other structural elements thereof, heating, ventilation, air conditioning, mechanical, electrical, plumbing and other building systems, environmental control, remediation and abatement

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systems, sewer, storm and waste water systems, irrigation and other water distribution systems, parking facilities, fire protection, security and surveillance systems, and telecommunications, computer, wiring and cable installations, included in the Real Property are in good condition and repair, ordinary wear and tear excepted, and sufficient for the operation of the Business.

(vii)The Real Property is in complete compliance with all applicable building, zoning, subdivision, health and safety and other land use Laws, including The Americans with Disabilities Act of 1990, as amended, and all insurance requirements affecting the Real Property (collectively, the “Real Property Laws”), and the current use and occupancy of the Real Property and the operation of Seller’s Business thereon does not violate any Real Property Laws.  Seller has not received any notice of violation of any Real Property Law, and to Seller’s Knowledge, there is no basis for the issuance of any such notice.

(viii)With respect to the Real Property, all certificates of occupancy, permits, licenses, approvals and authorizations (collectively, the “Real Property Permits”) of all governmental authorities, board of fire underwriters, association or any other entity having jurisdiction over the Real Property, which are required to use or occupy the Real Property, or operate Seller’s Business as currently conducted thereon, have been issued and are in full force and effect. Paragraph 7.1(i)(viii) of the Disclosure Schedule lists all material Real Property Permits held by either Seller with respect to each parcel of Real Property.  Seller has delivered to Purchaser a true and complete copy of all Real Property Permits.  Seller has not received any notice from any governmental authority or other entity having jurisdiction over the Real Property threatening a suspension, revocation, modification or cancellation of any Real Property Permit.

(ix)To the Knowledge of Seller, and except as disclosed in PARAGRAPH 7.1(i)(ix), the current use and occupancy of the Real Property and the operation of the Business of Seller at those addresses as currently conducted thereon does not violate any easement, covenant, condition, restriction or similar provision in any instrument of record or other unrecorded agreement affecting such GOE Real Property (the “Encumbrance Documents”).  To the Knowledge of GOE it has not received any notice of violation of any applicable Encumbrance Documents.

(j)Fixed Assets.  Except as set forth in PARAGRAPH 7.1(j) of the Disclosure Schedule:

(i)the Fixed Assets and the Improvements will be operational, taking into account their age and general condition as of Closing;

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(ii)no Fixed Assets or Improvements are damaged or in need of repair, except for ordinary wear and tear; and

(iii)each of the Fixed Assets are in the possession of Seller and are capable of delivery upon Closing.

(k)Intellectual Property.

(i)EXHIBIT 1.1(f) comprises a full, complete and accurate listing of the Intellectual Property owned by Seller and transferred to Purchaser hereunder.

(ii)The Intangible Property and Intellectual Property are not licensed to, or from, any other Person, and Seller owns all right, title and interest in and to all Intangible Property and Intellectual Property.

(iii)Each Person that is the inventor or co-inventor of the Intellectual Property, which is used by Seller within the Business has properly executed and delivered to the Seller an assignment of the inventor’s rights in such invention.

(iv)The Seller has not interfered with, infringed upon, misappropriated, or otherwise come into conflict with any Intellectual Property Rights of third parties, and the Seller has not received any charge, complaint, claim, demand, or notice alleging any such interference, infringement, misappropriation, or violation (including any claim that either Seller must license or refrain from using any Intellectual Property Rights of any third party).

(v)To the best of Seller’s Knowledge no third party has interfered with, infringed upon, misappropriated, or otherwise come into conflict with any Intellectual Property Rights of the Seller.

(l)Conduct of Business.

Seller has conducted and will conduct its operations up to and including the Closing in the Ordinary Course of Business. Specifically, and except as expressly provided in this Agreement, Seller has not, and will not, without the prior written approval of Purchaser, or as expressly provided in this Agreement, take any action since May 31, 2008:

(i)amending Seller’s Articles of Incorporation or Bylaws;

(ii)transacting any sales of capital stock or acquisitions or redemptions thereof or the grant of options, warrants or calls;

(iii)forming any subsidiary, making any investment in any new business or entering any new line of business;

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(iv)making any increase in the compensation payable to its directors, officers or employees except for routine wage increases;

(v)except for borrowings in the Ordinary Course of Business under Seller’s existing line of credit, borrowing or agreeing to borrow any money or assuming or otherwise guaranteeing or becoming liable for any sort of Liability;

(vi)entering into any contract, lease, commitment or the like committing to material future expenditures, not disclosed in a schedule to this Agreement, except the acquisition of inventory in the Ordinary Course of Business;

(vii)changing or modifying any accounting practice;

(viii)granting or executing any power of attorney to or for the benefit of any third party;

(ix)deferring or failing to make any payment due with respect to any of the Assumed Liabilities according to the terms thereof or, if earlier, in the Ordinary Course of Business;

(x)selling, disposing, transferring, assigning, or otherwise removing any of the assets used in, or related to, the Business or entering into any letter of intent to do any of the foregoing, except inventory in the Ordinary Course of Business; or

(xi)disposing of, or permitting to lapse, any rights to use any of its Intellectual Property Rights, or impairing its ability to enforce any agreement protecting any confidential or proprietary information of the Business.

(m)Accounts Receivable.  Except as set forth in PARAGRAPH 7.1(m) of the Disclosure Schedule, all Receivables are valid and fully collectible and to the best of Seller’s Knowledge, not subject to any defense, counterclaim or set-off, except and only to the extent of the reserve against accounts receivable shown on its Business Financial Statements.

(n)Inventory.  Except as set forth in PARAGRAPH 7.1(n) of the Disclosure Schedule:

(i)all Inventory is owned by Seller, and no Inventory owned by Seller is in the possession of any other Person; and

(ii)all Inventory is good and usable and is valued at the lower of cost or market, calculated on a FIFO method, in accordance with GAAP.

(o)No Adverse Change.  Except as set forth in SCHEDULE 7.1(o), there has been no adverse change in the Purchased Assets, or the operations or condition of Seller, and none of the Real Property Improvements or Purchased Assets have been

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materially damaged by fire or other casualty or otherwise disposed of other than in the Ordinary Course of Business since the date of this Agreement.

(p)Invoicing by Seller.  Seller’s invoices to customers, as provided to Purchaser during due diligence, reflect pricing to customers which pricing is expressly permitted under the Contracts, and reflect no charges or billing for amounts which are not expressly permitted under the Contracts or otherwise agreed to in writing by the parties thereto.

(q)Trade Rights, Licenses and Permits and Franchises.

Seller possesses all material Trade Rights, Licenses and Permits, approvals, and notifications, governmental or otherwise, the absence of which would have a material adverse effect on the Business.  All of such Trade Rights, Licenses and Permits are freely assignable and transferable to Purchaser at the Closing and will continue to be in full force and effect after such transfer.

(r)Agreements, Arrangements, Contracts, and Commitments.

PARAGRAPH 7.1(R) of the Disclosure Schedule sets forth a list of each and every agreement, arrangement, contract or commitment to which Seller is a party, and to which any Seller Party is bound.  Except as provided in PARAGRAPH 7.1(R) of the Disclosure Schedule, each such agreement, arrangement, contract or commitment is terminable pursuant to the terms of the contract without penalty, cost or Liability on notice not exceeding sixty (60) days.  Full, complete and accurate copies of all material agreements, arrangements, contracts or commitments, have been provided to Purchaser.  Except as provided therein, all of such agreements, arrangements, contracts or commitments are in full force and effect, Seller is in material compliance therewith, and Seller is not in breach permitting termination by, or an award of damages to, the other Party(ies) thereto (nor has it received notice of a claim that it is in such breach) of any contracts identified in the Disclosure Schedule.  Except as provided in the Disclosure Schedule any consents to the assignment of such Contracts, if any, as are required shall be obtained by the Seller prior to Closing.

Neither GOE nor GOECA has received any written notice that any party to any of the Assigned Contracts intends to cancel or terminate the agreements.

(s)Potential Acquirers.  Since February 11, 2008, Seller has not negotiated with, or provided confidential information identifying Seller on a named basis to, any potential acquirer of the Business, the Purchased Assets prior to executing appropriate confidentiality and non-disclosure agreements (each such Person is hereinafter, a “Potential Acquirer”).  All of such agreements shall be provided to Purchaser at Closing, are assignable to Purchaser, and shall be assigned to Purchaser pursuant to SECTIONS 1.1(J) AND 4.2(d) and shall be enforceable by Purchaser after Closing.

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(t)Employee Plans.

(i)Except as provided in PARAGRAPH 7.1(t) of the Disclosure Schedule, Seller does not have in place any pension, retirement, disability, medical, dental, or other death benefit plan, profit sharing, deferred compensation, stock option, or severance plan, including, without limitation, any “pension plan” as defined in section 3(2) of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”) (“Pension Plan”), and any “welfare plan” as defined in section 3(1) of ERISA (“Welfare Plan”), whether  or not any of the foregoing are funded (collectively the “Employee Plans”). The term “Employee Plan” shall also include every plan, fund, contract, program, policy, agreement and arrangement (whether written or not):

(A)which is sponsored, maintained or contributed or required to be contributed to by the Seller or by any trade or business, whether or not incorporated (an “ERISA Affiliate”), that together with Seller would be deemed a single employer within the meaning of section 4001(b) of ERISA, or to which the Seller or an ERISA Affiliate is a party, for the benefit of present or former employees or managers of  Seller (or any subsidiary of  Seller);

(B)which the Seller or any ERISA Affiliate has committed to implement, establish, adopt or contribute to in the future;

(C)for which the Seller is or may be financially liable as a result of the direct sponsor’s affiliation to the Seller or its owners (whether or not such affiliation exists at the date of this Agreement and notwithstanding that the plan is not maintained by the Seller for the benefit of its employees or former employees);

(D)which is in the process of terminating (but such term does not include any arrangement that has been terminated and completely wound up prior to the date of this Agreement such that the Seller has no present or potential Liability with respect to such arrangement);

(E)for or with respect to which the Seller is or may become liable under any the common law successor doctrine, express successor Liability provision of Law, provisions of a collective bargaining agreement, labor or employment Law or agreement with a predecessor employer.

(ii)With respect to any Employee Plans referred to in PARAGRAPH 7.1(t) of the Disclosure Schedule:

(A)Such Employee Plans reflect the applicable requirements of ERISA to the extent required by Law. The 401(k) Plan is the only

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Employee Plan that is intended to satisfy the requirements of section 401, et.seq. of the Code. The 401(k) Plan is a prototype plan that utilizes the form of basic plan document and adoption agreement comprising the American Funds Distributors, Inc. Nonstandardized 401(k) Plan.  The form of the prototype basic plan document and the adoption agreement comprising the American Funds Distributors, Inc. Nonstandardized 401(k) Plan have been determined by the National Office of the Internal Revenue Service to comply with the requirements of section 401 et.seq. of the Code.  Each of the Employee Plans is currently being administered, and has been in material compliance with the applicable provisions of the Code and ERISA;

(B)There is no current matter which could reasonably be expected to adversely affect the qualified tax exempt status of any such Employee Plan and trust under the Code.

(C)To the best of Seller’s Knowledge, all required reports and descriptions (including Form 5500 Annual Reports, summary annual reports, and summary plan descriptions) have been timely filed and distributed appropriately with respect to each such Employee Plan.  To the extent applicable, the requirements of Part 6 of Subtitle B of Title I of ERISA and Code section 4980B of the Code have been met with respect to each such Employee Plan which is a Welfare Plan.

(D)All contributions (including all employer contributions and employee salary reduction contributions) which are due have been paid to each such Employee Plan which is a Pension Plan and all contributions for any period ending on or before the Closing which are not yet due have been paid to each such Pension Plan or accrued in accordance with the past custom and practice of the Seller. All premiums or other payments due for all periods ending on or before the Closing have been paid (or, with respect to those not yet due, will have been paid on or before Closing) with respect to each such Employee Plan which is a Welfare Plan.

(E)Seller has delivered or made available to the Purchaser correct and complete copies of the plan documents and summary plan descriptions, the most recent determination letter received from the Internal Revenue Service, the most recent Form 5500 Annual Report, and all related trust agreements, insurance contracts, and other funding agreements which implement each such Employee Plan.

(F)None of the Employee Plans, the trusts created thereunder, or any trustee, investment manager or administrator thereof, has engaged in

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a non-exempt “prohibited transaction” as such term is defined in section 406 of ERISA and section 4975 of the Code.

(G)No Employee Plan is subject to Title IV of ERISA.

(H)None of the Employee Plans is a multiemployer plan as defined under section 3(37) of ERISA or subject in any way to the provisions of the Multiemployer Pension Plan Amendments Act of 1980, as amended.

(I)Except as disclosed in PARAGRAPH 7.1(t) of the Disclosure Schedule or as otherwise contemplated by this Agreement:  (1) no action, suit, charge, complaint, proceeding, hearing, investigation, or claim is pending with regard to any Employee Plan other than routine claims for benefits or, if contested, are not material in amount; (2) the consummation of the Contemplated Transactions will not cause any Employee Plan to increase benefits payable to any participant or beneficiary; (3) the consummation of the Contemplated Transactions will not:  (a) entitle any current or former employee of the Seller to severance pay, unemployment compensation or any other payment, benefit or award under the Employee Plans; or (b) except as required by applicable Law, accelerate or modify the time of payment or vesting, or increase the amount of any benefit, award or compensation due any such employee under the Employee Plan; (4) all Employee Plans have been administered in all material respects in compliance with the documents and instruments governing the Employee Plans, except in cases where changes in the Law require compliance with the Laws for periods preceding the date the Employee Plans are required to be amended with retroactive affect; (5) all materials disclosures and notices required by applicable Law or Employee Plan provisions to be given to participants and beneficiaries in connection with each Employee Plan have been properly and timely made; and (6) with respect to the Employee Plans, the Seller has no material Liability (either directly or as a result of indemnification) for (and the transaction contemplated by this Agreement will not cause any Liability for): (a) any excise taxes under the Code sections 4971 through 4980B of the Code or section 4999 or section 5000 of the Code, or (b) any penalty under section 502(i), or section 502(l) of the Code, Part 6 of Title I of ERISA or any other provision of ERISA, or (c) any excise taxes, penalties, damages or equitable relief as a result of any prohibited transaction, breach of fiduciary duty or other violation under ERISA or any other applicable Law.

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(u)Union and Employment Contracts and Other Employment Matters.

(i)No executive, key employee or group of employees has provided notice of termination of their employment or, to the Knowledge of Seller, has any plans to terminate employment with the Seller.  GOE and GOECA will disclose any such notice to Purchaser within three (3) business days of receiving such notice.

(ii)Seller is not a party to any collective bargaining agreement or any other written employment agreement with its employees, nor is Seller a party to any other written contract or understanding that contains any severance pay liabilities or obligations, except for accrued, unused vacation pay or accrued, unused sick leave pay for its employees.

(iii)During the last three (3) years Seller has not experienced any work stoppages, walkouts, or strikes or attempts by its employees to organize a union.

(iv)In the past three (3) years no claims have been made against Seller by any former or present employee based on employment discrimination, age discrimination, equal employment opportunity, sexual harassment, human rights Laws violations, wrongful discharge, or unfair labor practices, and Seller has no Knowledge of any facts or circumstances upon which any such claim could be made.

(v)Seller has not received any claim asserting and have no Knowledge of any failure of Seller to comply with applicable federal and state Laws and regulations relating to employment of labor, including Laws and regulations relating to wages, hours, collective bargaining, withholding taxes, and employee health and benefits.

(vi)Seller is in compliance with the Immigration Reform & Control Act of 1986.

(vii)Seller is in compliance with ERISA.

(viii)Seller is in compliance with the Occupational Safety and Health Act.

(v)Major Customers; Major Suppliers.

(i)Major Customers.  For the three (3) previous fiscal years, SCHEDULE 7.1(v)(i) sets forth the identity of the twenty largest customers (or 80 percent) of the Business of Seller based on the aggregate value of the products purchased from Seller.  Except as set forth on PARAGRAPH 7.1(v)(i) of the Disclosure Schedule, no customer has reduced or has notified GOE or GOECA that it intends  to cease doing business with Seller, or reduce the amount of purchases of products from Seller.

(ii)Major Suppliers.  For the three (3) previous fiscal years, SCHEDULE 7.1(v)(ii) sets forth the identity of the twenty largest suppliers

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(or 80 percent of supply costs) of raw materials or equipment used by GOE or GOECA.  Except as set forth on SCHEDULE 7.1(v)(ii) no supplier has reduced or has notified GOE or GOECA that it intends to reduce the amount of raw materials or equipment available for purchase by Seller.

(w)Liability Claims.

All products sold or services provided by Seller have been merchantable, have not been adulterated or misbranded within the meaning of the Federal Food, Drug and Cosmetic Act, as amended, and not an article which may not be introduced into interstate commerce under the provisions of Section 404 or 505 of such act, and has not been an article which cannot be legally transported or sold under the provisions of any federal, state or local Law, and have complied with the terms of any written or oral warranties made by Seller and all such warranties are identified in the Disclosure Schedule and copies of all written warranties are attached thereto. During the last three (3) years, Seller has not received any single claim exceeding Ten Thousand Dollars ($10,000.00) or claims in the aggregate exceeding Twenty Five Thousand Dollars ($25,000.00) based upon an alleged breach of product warranty, arising from Seller’s provision of products or services (hereafter collectively referred to as “Liability Claims”). The Seller has no Knowledge that future Liability Claims with respect to products or services of Seller sold prior to the Closing will be different from Seller’s past experience with respect thereto as set forth herein.

(x)Environmental, Health and Safety Matters;

Seller has not violated, and is not in violation of, any Environmental, Health and Safety Requirements.  Seller does not now, and has not previously, owned, leased, operated or controlled any real property, including the Business Premises, upon which any Hazardous Substances have been treated, stored, used, released or disposed.  Seller does not now, and has not previously, owned, leased or controlled any Hazardous Substances treated, stored, used or released at any location other than the Business Premises.  All storage tanks and associated pipes, pumps and structures (whether above or below ground) located in or on the Business Premises or any other real property currently or previously owned, leased, operated or controlled by Seller, are in sound condition, free of corrosion, meet all applicable performance standards and do not now, and have not at any time in the past evidenced impaired integrity or leakage.  Without limiting the generality of the foregoing, Seller’s disposal practices, including the disposal of egg shells, has fully complied with all applicable Laws.  Seller has received no notice of any such alleged violation, or any of the matters set forth in this subsection.  No material expenditures are required for Seller to comply with Environmental, Health and Safety Requirements.

(y)Insurance.

A complete list of Seller’s current insurance coverage is attached hereto in PARAGRAPH 7.1(x) of the Disclosure Schedule.  Seller has maintained, and will continue to maintain until the Closing, insurance on Seller’s tangible real and personal property and assets, whether owned or leased, against loss or damage by

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fire or other casualty, in the amounts currently maintained.  All such insurance is in full force on the date of this Agreement, and there are no premium payments past due thereon. Seller has promptly and adequately notified Seller’s insurance carriers of any and all claims known to Seller with respect to the operations or products of Seller for which Seller is insured.

(z)Burdensome Conditions.

There are no actions taken, pending or threatened, by any governmental authority or other Person to investigate or challenge any action or inaction of Seller under any applicable Laws, nor is Seller subject to any existing judgment, order, or decree which would prevent, or make illegal the consummation of the Contemplated Transactions or which would have an adverse effect on the Business or the Purchased Assets.

(aa)Litigation.

There is no pending litigation against Seller, nor to the Knowledge of Seller any adverse claims which may lead to litigation, relating to any aspect of the Business or the Purchased Assets.

(bb)Laws and Regulations.

Seller is in material compliance with all Laws relating to the Business or the Purchased Assets. Seller has not received any notice of, and Seller has no Knowledge of, any sort of alleged material violation of any such Laws.

(cc)Breaches of Contracts; Required Consents.

Neither the execution and delivery of this Agreement by Seller nor compliance by Seller with the terms and provisions thereof, will:

(i)Conflict with or result in a breach of:

(A)Any of the terms, conditions, or provisions of the Articles of Incorporation, Bylaws, or other governing instruments of Seller;

(B)Any judgment, order, decree, or ruling to which Seller is a party or by which any of them is bound;

(C)Any Law, rule, regulation or injunction of any court or governmental authority to which Seller is subject; or

(D)Any mortgage, agreement, contract, lease, or commitment binding upon Seller;

(ii)Require the affirmative consent or approval of any third party; or

(iii)Cause acceleration of any other obligations of Seller.

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(dd)Brokers.

Seller has engaged Greene Holcomb & Fisher as their broker in connection with the Contemplated Transactions, and has engaged no other broker in connection with the Contemplated Transactions. Greene Holcomb & Fisher’s fees for this transaction shall be the sole responsibility of Seller and will be paid by Seller via wire transfer at Closing.

(ee)Copies of Documents.

Seller has made available for inspection and copying by Purchaser true and correct copies of all documents referred to in this Agreement or in any exhibit hereto.

(ff)Change of Control Agreements.

Seller does not have in place any agreements, whether written or oral, that provide any Person extraordinary rights (including rights with respect to voting, appointment of directors or officers, control of operations, or limitations on shareholders’ exercise of shareholder’s normal rights incidental to their respective share ownership in such corporations) with respect to Seller whether presently existing or arising upon consummation of any of the Contemplated Transactions.

Section 7.2.REPRESENTATIONS AND WARRANTIES OF PURCHASER.

Purchaser makes the following representations and warranties to Seller with the intention that Seller may rely upon the same and acknowledges that the same shall be true on the date hereof and as of the Closing (as if made at the Closing) and shall survive the Closing.

(a)Organization.  Purchaser is a corporation, duly organized, validly existing, and in good standing under the Laws of the State of Iowa, and has all requisite power and authority, corporate and otherwise, and possesses all necessary government licenses, to own and lease its properties and assets and to conduct the business in which it is presently engaged.

(b)Corporate Authority.  This Agreement and all Ancillary Documents constitute the legal, valid, and binding obligation of Purchaser in accordance with the terms thereof.  Purchaser has all requisite corporate power and authority, including the approval of its Board of Directors, to execute, perform, carry out the provisions of, and consummate the Contemplated Transactions.

(c)Breaches of Contracts; Required Consents.  Neither the execution and delivery of this Agreement by Purchaser, nor compliance by Purchaser with the terms and provisions thereof, will:

(i)Conflict with or result in a breach of:

(A)Any of the terms, conditions, or provisions of the Articles of Incorporation, Bylaws, or other governing instruments of Purchaser;

(B)Any judgment, order, decree, or ruling to which Purchaser is a party or by which it is bound;

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(C)Any Law, rule, regulation or injunction of any court or governmental authority to which Purchaser is subject; or

(D)Any mortgage, agreement, contract, lease, or commitment which is material to the financial condition of Purchaser; or

(ii)Require the affirmative consent or approval of any third party.

(d)Brokers.  Purchaser has not engaged the services of any broker or finder in connection with the transaction described in this Agreement.

(e)Financial Capability.  The Purchaser at the Closing will have sufficient funds to pay the Purchase Price in connection with the Contemplated Transactions.

ARTICLE 8.RESTRICTIVE COVENANTS.

Section 8.1.NON-COMPETITION.

The Seller hereby covenants that from and after the Closing and for a period of five (5) years it will not, either alone, or jointly with, or as a partner, principal or agent for any Person, firm, partnership, business, or corporation, either directly or indirectly: (a) engage in the Business anywhere in the United States of America; or (b) engage in any occupation, business or interests similar to, competitive with, or of the same nature as the Business as heretofore conducted by Seller or as it may hereafter be conducted by Purchaser.

Section 8.2.NON-DISCLOSURE.

Seller acknowledges and agrees that all books, documents, lists and records pertaining to the Seller and the Business which are Purchased Assets (hereinafter collectively, the “Records”), whether the Records are written, typed, printed, contained on microfilm, computer disk, tape or any other form of storage media, are the sole and exclusive property of the Business and that upon consummation of the transactions contemplated in the Agreement will become the sole and exclusive property of the Purchaser.  Further, Seller shall not divulge, communicate, use to the detriment of Purchaser or the Business, or for the benefit of the Seller or any other Person, or otherwise misuse, any confidential information, data, or trade secrets, whether or not contained in the Records, which are proprietary or confidential to Purchaser, the Seller, or the Business (as distinguished from material which is or may come into the public domain through no fault of Seller) including any material which is part of, contained in, or related to the Purchased Assets, or Seller’s processes or techniques, technical data or cost or pricing information except to the extent such information is in the public domain or prior to Closing comes into the public domain through no fault of Seller, and except to the extent required to be disclosed by Law or court order, or as required in litigation or subpoena to which the Seller is subject.

Section 8.3.NO USE OF NAME.

Seller covenants that from and after Closing they shall not use the mark Golden Oval Eggs either as a corporate name or in any trade or business nor shall it use any name containing the word “Golden Oval Eggs” or any name confusingly similar to such name or words.

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Section 8.4.INJUNCTIVE RELIEF.

The Parties agree that it would be impossible to measure in money the damages which will accrue to Purchaser or the Business by reason of Seller’s failure to comply fully with the covenants contained in this ARTICLE 8. Seller acknowledges that the remedy at Law for any breach would be inadequate, and that, in addition to damages, Purchaser shall be entitled to injunctive relief from any court having jurisdiction of Seller and the subject matter, ordering specific performance of the provisions of this ARTICLE 8. In any action to enforce the provisions of the ARTICLE 8, Seller shall waive the right to claim that Purchaser has an adequate remedy at Law. Seller specifically admits receipt and adequacy of consideration for the covenants contained in this ARTICLE 8 and the reasonableness of the restrictions contained in this ARTICLE 8.

ARTICLE 9.SURVIVAL.

Section 9.1.SURVIVAL OF REPRESENTATIONS AND WARRANTIES.

Excluding any claims related to Intentional Misrepresentation or fraud, i) the right of the Parties to make any claims for breaches of the representations and warranties contained in SECTION 7.1 hereof, and ii) any liability for breaches of the representations and warranties contained in SECTION 7.1 and SECTION 7.2 hereof; shall terminate upon the Closing.

ARTICLE 10.GENERAL.

Section 10.1.ENTIRE AGREEMENT.

This Agreement, together with the schedules and exhibits pursuant to this Agreement or executed and delivered at Closing, sets forth the entire agreement and understanding among the Parties as to the subject matter, and merges and supersedes all prior discussions, agreements, and understandings of every and any nature among them. This Agreement shall be effective only when signed by all of the Parties on the signature pages. No Party shall be bound by any condition, definition, warranty, or representations, other than as expressly set forth or provided for in this Agreement, or as may be, on or subsequent to the date of this Agreement set forth in writing and signed by the Party to be bound.  This Agreement may not be amended, supplemented, changed, or modified, except by agreement in writing signed by the Parties to be bound.

Section 10.2.APPLICABLE LAW; WAIVER OF JURY TRIAL; CONSENT TO JURISDICTION.

The validity, construction and performance of this Agreement shall be governed by and construed in accordance with the internal Law of the state of Minnesota applicable to contracts executed in and performed entirely within such state, without reference to any choice of Law statutes or principals thereof. With respect to any litigation arising out of this Agreement, the Parties expressly waive any right they may have to a jury trial and agree that any litigation shall be tried by a judge without a jury. Each Party agrees to non-exclusive personal jurisdiction and venue in the United States District Court for the District of Minnesota and/or any State District Court in Minnesota.

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Section 10.3.SCHEDULES AND EXHIBITS.

Each schedule and exhibit delivered pursuant to the terms of this Agreement shall be in writing, subject to amendments permitted under the express terms and conditions of SECTION 3.10 and shall constitute a part of this Agreement as if fully set forth in this Agreement.

Section 10.4.EXECUTION IN COUNTERPARTS.

For the convenience of the Parties, this Agreement may be executed in one or more counterparts (including facsimile counterparts which shall have the same effect as originals), and by different Parties on different counterparts with the same effect as if the signatures were on the same instrument. This Agreement shall be effective and binding upon all Parties only when all Parties have executed a counterpart of this Agreement.

Section 10.5.HEADINGS.

The headings in the sections of this Agreement are inserted for convenience only and shall not constitute a part of this Agreement.

Section 10.6.PRONOUNS.

All pronouns used in this Agreement shall be deemed to include the masculine, feminine, and neuter.

Section 10.7.PLURALS.

Plural terms shall be deemed to include the singular and the singular the plural whenever necessary or appropriate to effect the intent of this Agreement including in conjunction with defined terms as set forth in this Agreement.

Section 10.8.BINDING EFFECT AND BENEFIT.

This Agreement shall be binding upon and inure to the benefit of the Parties and their respective heirs, executors, legal representatives, successors, and permitted assigns.

Section 10.9.SUCCESSORS AND ASSIGNS.

No Party hereto shall assign or transfer any of its rights or obligations without the prior written consent of the other Parties. Notwithstanding the foregoing, Purchaser may assign its rights and obligations (or any portion thereof) hereunder to an Affiliate, whether presently existing or formed subsequent to the date hereof; provided, however, that Purchaser shall guarantee the performance hereof by its assignee subject to the terms and conditions of this Agreement.

Section 10.10.NO THIRD PARTY RIGHTS.

This Agreement is not intended, and shall not be construed, to create any rights in any Person other than the Parties to this Agreement and no other Person shall have any rights as a third party beneficiary under this Agreement.

Section 10.11.NOTICES.

(a)Recipients.  All notices, consents, waivers, and other communications (each hereinafter a “Notice”) which are required to be given or may be given pursuant to the terms of this Agreement shall be in writing signed by the Party or an officer of the Party giving notice or by counsel for such Party and shall be sufficient in all respects if delivered in person, or mailed by registered or certified mail, postage prepaid, or sent by commercial expedited delivery service, as follows:

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If to Seller or any of them:	Golden Oval Eggs, LLC
With a copy to (which copy shall  be mandatory to effect Notice but shall not alone constitute Notice):	Mark Hanson
	Stoel Rives LLP
	Suite 4200
	33 South Sixth Street
	Minneapolis, MN 55402
If to Purchaser:	Rembrandt Enterprises, Inc.
	1419 480th Street
	Rembrandt, IA 50576
	Attention: President
With a copy to (which copy shall be mandatory to effect Notice but shall not alone  constitute Notice):	Rembrandt Enterprises, Inc.
	c/o 1725 Roe Crest Drive
	North Mankato, Minnesota 56002-3728
	Attn: General Counsel’s Office

or such replacement address as any Party hereto shall have designated by Notice to the other Parties as provided in this Agreement.

(b)Effective Time.  Any Notice shall be effective when the Party giving the Notice has complied with SECTION 10.11(a) and when received by all Persons specified to receive such Notice.  A Notice is deemed to have been received as follows:

(i)upon receipt as indicated on the signed receipt, if given by hand or sent by registered or certified mail or commercial expedited delivery service; or

(ii)if the Party to whom Notice is sent refuses delivery or if the Notice cannot be delivered due to a change in address for which no Notice was provided, then upon rejection, refusal or inability to deliver.

Notwithstanding the foregoing provisions, if any Notice is received after 5 p.m. on any Business Day or on any day other than a Business Day where received, the Notice shall be deemed to have been delivered at 9 a.m. on the next following Business Day.

Section 10.12DEFINITIONS.

Unless otherwise specified in this Agreement, the following terms (or any singular, plural, derivative or alternative form) as used in this Agreement or the instruments, certificates, or other documents required under this Agreement, shall have the meanings assigned in this SECTION 10.12:

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(a)Affiliate.  Affiliate means any Person controlling, controlled by or under common control with the Party or Person specified, including any:

(iii)subsidiaries;

(iv)partners;

(v)divisions; and

(vi)shareholders possessing the authority to appoint a majority of the board of directors or to direct the actions of such Party or Person.

(b)Ancillary Documents.  Ancillary Documents means, in the case of Seller, all documents executed by Seller and delivered under SECTION 4.2, and in the case of Purchaser, all documents executed by Purchaser and delivered under SECTION 4.3.

(c)Business Day.  Business Day means a day other than a Saturday, Sunday or other day on which commercial banks in New York, New York, are authorized or required by Law to close.

(d)Contemplated Transactions.  Contemplated Transactions means all of the transactions contemplated by this Agreement, including:

(i)the execution, delivery, and performance of the agreements and other instruments to be delivered pursuant to the terms of this Agreement;

(ii)the performance by the Parties of their respective covenants and obligations under this Agreement; and

(iii)the purchase and sale of the Purchased Assets.

(e)Customer and Prospect Information.  Customer and Prospect Information means: (i) all information regarding customers (regardless of date of last purchase) and prospects (regardless of date of last contact) whether maintained as an individual record or in composite or list form including contact information, source of customer or prospect name, demographic information (including SIC or other industry codes, nature of business, and employee count), transaction records (including notes), purchase history, order and contact frequency, responses to marketing campaigns and offers, billing and payment history, shipping and credit information and terms; and (ii) all information regarding marketing and prospecting campaigns, techniques and offers including source(s) of lists, analysis of list performance, response rates, advertising costs, total campaign revenue, total campaign cost of goods sold and other costs, average order size, customer retention, and lifetime value of customers.

(f)Environmental, Health and Safety Requirements.  Environmental, Health and Safety Requirements means any Laws relating to public health and safety, worker health and safety, and pollution and protection of the environment, including the

45

treatment, storage, use, release, disposal, or management of Hazardous Substances, including, without limitation, the Comprehensive Environmental Response, Compensation and Liability Act (“CERCLA”), 42 U.S.C. Section 9601 et seq., the Hazardous Materials Transportation Act, 49 U.S.C. Section 1801 et seq., the Resource Conservation and Recovery Act (“RCRA”), 42 U.S.C. Section 6901 et seq., the Clean Water Act, 33 U.S.C. Section 2601 et seq., the Toxic Substances Control Act, 15 U.S.C. Section 2601 et. seq., the Federal Insecticide Fungicide, and Rodenticide Act, 7. U.S.C. Section 136 et seq., the Oil Pollution Act of 1990, 33 U.S.C. Section 2701 et seq., the Occupational Safety and Health Act, 29 U.S.C. Section 651 et seq., and the Emergency Planning and Community Right to Know Act, as those laws have been amended or supplemented, and the regulations promulgated pursuant to those laws, and all analogous state or local laws.

(g)GAAP.  GAAP means United States generally accepted accounting principles, consistently applied.

(h)Hazardous Substances.  Hazardous Substances means 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 Health and Safety Requirement 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 byiphenyls, and any other substances defined or listed as “hazardous substances”, “hazardous materials”, “hazardous waste”, “extremely hazardous substances”, “toxic substances”, “toxic chemicals”, or any variation thereof, pursuant to applicable Laws.

(i)Intellectual Property Rights.  Intellectual Property Rights means:

(A)all inventions (whether or not patentable and whether or not reduced to practice), all improvements thereto, and all patents, patent applications, and patent disclosures, together with all reissuances, continuations, continuations-in-part, revisions, extensions, and reexaminations thereof;

(B)all trademarks, service marks, trade dress, logos, trade names, and corporate names, together with all translations, adaptations, derivations, and combinations thereof and including all goodwill associated therewith, and all applications, registrations, and renewals in connection therewith;

(C)all works (whether or not copyrightable), all copyrights, and all applications, registrations, and renewals in connection therewith;

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(D)all mask works and all applications, registrations, and renewals in connection therewith;

(E)all trade secrets and confidential business information (including ideas, research and development, know-how, formulas, compositions, manufacturing and production processes and techniques, technical data, designs, drawings, specifications, customer and supplier lists, pricing and cost information, and business and marketing plans and proposals);

(F)all computer software (including data and related documentation);

(G)all other proprietary rights; and

(H)all copies and tangible embodiments thereof (in whatever form or medium).

(j)Intentional Misrepresentation.  Intentional Misrepresentation means the equivalent of a person intentionally making a false statement with the hope and intent that you rely upon it to your harm. Intentional misrepresentation can take the form of an intentionally made false promise to do something in the future with no intention of performing at the time the promise is made. Similarly, where someone, because of a relationship with the other person, has a duty to disclose certain facts and intentionally conceals them, that person can be guilty of intentional misrepresentation.

(k)Knowledge.  Knowledge means, with respect to any Person, actual knowledge of a fact or constructive knowledge if a reasonably prudent Person in a like position would have known, or should have known, the fact after due inquiry, and with respect to any corporation or other entity, actual knowledge of a fact by any officer, director or employee of such corporation or entity (or any Affiliate) or constructive knowledge if a reasonably prudent officer, director or employee would have known, or should have known the fact after due inquiry.   For purposes of this Agreement, officers, directors or employees of the Seller are limited to Dana Persson, Rob Harrington, Tom Powell, Jerry Armstrong and William Bloyer, and in the case of Purchaser, are limited to Dave Rettig, Bill Kozitza and Brad Fullmer.

(l)Laws.  Laws means any applicable federal, state, county, or local laws, statutes, rules, regulations, ordinances and requirements promulgated by governmental or other authorities including any judicial or administrative interpretations thereof.

(m)Liability.  Liability means any liability (whether known or unknown, whether asserted or unasserted, whether absolute or contingent, whether accrued or unaccrued, whether liquidated or unliquidated, and whether due or to become due), including any liability for Taxes.

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(n)Most Recent Balance Sheet.  Most Recent Balance Sheet means the balance sheet(s) included within the Financial Statements as of the Most Recent Fiscal Year End.

(o)Most Recent Fiscal Year End.  Most Recent Fiscal Year End means August 31, 2007.

(p)Ordinary Course of Business.  Ordinary Course of Business means:

(i)the action is consistent with the past custom and practice (including with respect to quantity and frequency) of such Person in the day-to-day operations of such Person; and

(ii)the action is not required to be authorized by the board of directors of such Person (or by any Person or group of Persons exercising similar authority) and is not required to be authorized by the parent company (if any) of the Person.

(q)Party.  Party means each Seller Party and the Purchaser.

(r)Person.  Person means an individual, a partnership, a corporation, an association, a joint stock company, a trust, a joint venture, an unincorporated organization, or a governmental entity (or any department, agency, or political subdivision thereof).

(s)Related Person.  Related Person means a Person which is:

(i)an Affiliate of the specified Person; or

(ii)is a shareholder, officer, director of the specified Person; or

(iii)is a parent, child, spouse or sibling or a member of the same household of the specified Person or of any of the foregoing Related Persons.

Section 10.13.SEVERABILITY.

If any provision of this Agreement shall be held to be illegal, invalid or unenforceable, that provision shall be enforced to the greatest extent permissible so as to affect the intent of the Parties, and the legality, validity and enforceability of the remaining provisions shall in no manner be affected or impaired. If necessary to effect the intent of the Parties, the Parties will negotiate in good faith to amend this Agreement to replace the illegal, invalid or unenforceable provision with legal, valid and enforceable language which as closely as possible reflects the intent.

Section 10.14.EXPENSES.

Each Party shall each bear and pay for its own costs and expenses incurred by it or on its behalf in connection with the Contemplated Transactions, including, without limitation, all fees and

48

disbursements of attorneys, accountants, brokers, and financial consultants incurred through the Closing (“Transaction Costs”).

Section 10.15.PUBLICITY.

No public release, announcement or other form of publicity concerning this Agreement or the Contemplated Transactions shall be issued by any Party without the prior written consent of all other Parties hereto; provided, however, that GOE is authorized to make such disclosures as may be required under applicable securities and other Laws and further provided in SECTIONS 3.8 and 3.9 of this Agreement.

Section 10.16.WAIVER.

The waiver by any Party of any other Party’s non-compliance with any obligation or responsibility shall be ineffective unless given in writing and shall not be deemed a waiver of other instances of non-compliance or of any Party’s remedies for such non-compliance.

Section 10.17.Construction; INTERPRETATION.

The Parties acknowledge that this Agreement was prepared by the Purchaser solely as a convenience and that all Parties and their counsel have read and fully negotiated all the language used in this Agreement. No rule of construction shall apply to this Agreement which construes ambiguous or unclear language in favor of or against any Party by reason of that Party’s role in drafting this Agreement.  No provision hereof shall be construed as a limitation or modification of any other provision hereof.  Unless otherwise specified in the relevant provision, “including” means “including without limitation” and no exclusion of unlisted items shall be inferred from their absence.

Section 10.18.DISCLOSURE SCHEDULES.

Items required to be disclosed on the Disclosure Schedule shall be deemed to be disclosed unless such disclosure identifies the matter with reasonable particularity and describes the item to be disclosed in reasonable detail. No such disclosure under any Schedule or certificate shall be deemed a disclosure under any other Schedule or certificate unless the latter Schedule or certificate contains a clear reference to the former Schedule or certificate and the referenced disclosure identifies both exceptions with reasonable particularity and detail.

Section 10.19.SPECIFIC PERFORMANCE.

Each Party agrees that remedies at Law may be inadequate to protect the other Party from and against any actual or threatened breach of this Agreement by such part or any of its representatives.  Without prejudice to the rights and remedies otherwise available to it, each Party agrees that any other Party may seek equitable relief in favor of the other Party by way of specific performance or otherwise without proof of actual damages, if the Party or any of its Representatives breach or threaten to breach any of the provisions of this Agreement.

Section 10.20.ATTORNEY FEES.

If any litigation shall be commenced to enforce, or relating to, any provision of this Agreement or any Ancillary Documents, the prevailing Party shall be entitled to an award of reasonable attorney fees (including fees related to the services of in-house counsel) and reimbursement of such other costs as it incurs in prosecuting or defending such litigation.  For purposes of this

49

SECTION 10.20, prevailing Party shall include a Party awarded injunctive relief, and a Party prevailing upon appeal.

Section 10.21.CONSENTS.

Any consent permitted or required in this Agreement or any Ancillary Documents shall be ineffective if not in writing and, unless provided otherwise, shall be granted or denied in the sole and absolute discretion of the Party authorized to grant the consent.

IN WITNESS WHEREOF, this Purchase and Sale Agreement has been duly executed by each Seller Party and the Purchaser effective as of the date first above written.

REMBRANDT ENTERPRISES, INC.

By:

Name:

Title:

GOLDEN OVAL EGGS, LLC

By:

Name:

Title:

GOECA, LP

By:

Name:

Title:

GOECMA, INC.

By:

Name:

Title:

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MIDWEST INVESTORS OF IOWA, COOPERATIVE

By:

Name:

Title:

51

EX-21.1

Exhibit 21.1

Subsidiaries of Golden Oval Eggs, LLC

Name	State or Other Jurisdiction of Incorporation
GOECA, LP	Delaware
AEI, LLC	Minnesota

EX-23.1

Exhibit 23.1

Consent of Independent Registered Public Accounting Firm

Board of Managers

Golden Oval Eggs, LLC

Renville, Minnesota

We consent to the inclusion of our report dated December 15, 2008 with respect to the consolidated balance sheets of Golden Oval Eggs, LLC as of August 31, 2008 and 2007, and the related consolidated statements of operations, changes in owners’ equity and cash flows for each of the three years ended August 31, 2008, which report has been included in the Annual Report to members and in the Annual Report on Form 10-K of Golden Oval Eggs, LLC.

/s/ Moore Stephens Frost

Certified Public Accountants

Little Rock, Arkansas

December 22, 2008

EX-31.1

EXHIBIT 31.1

CERTIFICATION PURSUANT TO

RULE 13A-14 OF THE SECURITIES EXCHANGE ACT OF 1934

AS ADOPTED PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

CERTIFICATIONS

I, Dana Persson, certify that:

1.	I have reviewed this annual report on Form 10-K of Golden Oval Eggs, LLC;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15 (e) and 15d-15 (e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15 (f) and 15d-15(f)) for the registrant and have:
	a)	designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
	b)	designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
	c)	evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
	d)	disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5.	The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
	a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
	b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: December 22, 2008

/s/    DANA PERSSON

Dana Persson

President (principal executive officer)

EX-31.2

EXHIBIT 31.2

CERTIFICATION PURSUANT TO

RULE 13A-14 OF THE SECURITIES EXCHANGE ACT OF 1934

AS ADOPTED PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

CERTIFICATIONS

I, Thomas A. Powell, certify that:

1. I have reviewed this annual report on Form 10-K of Golden Oval Eggs, LLC;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15 (e) and 15d-15 (e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15 (f) and 15d-15(f)) for the registrant and have:

a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: December  22, 2008

/s/ THOMAS A. POWELL

Thomas A. Powell

Chief Financial Officer

EX-32.1

EXHIBIT 32.1

CERTIFICATION

The undersigned officers of Golden Oval Eggs, LLC (the “Company”) certify, pursuant to 18 U.S.C. Section 1350, that:

(1)           The accompanying Golden Oval Eggs, LLC Annual Report on Form 10-K for the period ended August 31, 2008, fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)           The information contained in the accompanying report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date:       December 22, 2008

/s/ Dana Persson

Dana Persson

President and Chief Executive Officer

/s/  Thomas A. Powell

Thomas A. Powell

Chief Financial Officer