Exhibit 10.1


 


FIRST AMENDMENT TO CREDIT AGREEMENT


 


This
FIRST AMENDMENT TO CREDIT AGREEMENT (this
“Amendment”), made and entered into as of November    ,
2005, is by and between GOLDEN OVAL EGGS, LLC, a Delaware limited liability
company, and MIDWEST INVESTORS OF IOWA, COOPERATIVE, an Iowa cooperative
(individually, a “Borrower” and, collectively, the “Borrowers”),
the banks and other financial institutions or entities which are signatories
hereto (individually, a “Lender” and, collectively, the “Lenders”),
COBANK, ACB, a federally charted instrumentality under the Farm Credit Act of
1971, as amended, one of the Lenders, as agent for the Lenders (in such capacity,
the “Administrative Agent”), and METROPOLITAN LIFE INSURANCE COMPANY, as a Lender.


 


RECITALS


 


A.                                   The Administrative Agent, the Lenders and the
Borrowers entered into a Credit Agreement dated as of September 13, 2004 (the
“Credit Agreement”); and


 


B.                                     The Borrowers desire to amend certain
provisions of the Credit Agreement, and the Administrative Agent and the
Lenders have agreed to make such amendments, subject to the terms and
conditions set forth in this Amendment.


 


AGREEMENT


 


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


 


Section 1.                                          Capitalized Terms. Capitalized terms used herein and not
otherwise defined herein shall have the meanings assigned to them in the Credit
Agreement, unless the context shall otherwise require.


 


Section 2.                                          Amendments. The Credit Agreement is hereby amended as
follows:


 


2.1                               Definitions. The definitions of “Applicable Margin,”
“Fixed Charge  Coverage Ratio,” “Leverage Ratio,” “Termination
Date” and “Tranche A2 Rate” contained in Section 1.1 of the
Credit Agreement are hereby amended and restated to read in their entireties as
follows:


 


“Applicable Margin”: Subject to the last sentence of this
definition, with respect to computation of the applicable interest rate or the
Applicable Commitment Fee Percentage on Advances or Commitments under the
Revolving Loans, the Second Tranche 2 Advances and the Final Tranche 2 Advances
in respect of the Tranche A2 Term Loans, the Tranche B Term Loans or the Letter
of Credit Fee, as the case may be, the margin payable by the Borrowers with
respect thereto, as set forth and described in Annex I, established as
of the first day of each Fiscal Quarter after the Compliance Certificate
required by Section 5.1 is delivered as of the last day of the next
preceding


 





















 


Fiscal
Quarter (i.e. adjustments shall be made one Fiscal Quarter in arrears); provided,
however, that any adjustment in the Applicable Margin shall not become
effective until the Administrative Agent shall have received the Compliance
Certificate and related financial statements relating to the last day of such
next preceding Fiscal Quarter pursuant to Sections 5.1(c) and (d) hereof.
If a Compliance Certificate and related financial statements of the Borrowers’
Agent and a related certification of the Borrowers’ Agent pursuant to Sections
5.1(c) and (d) necessary to establish the Applicable
Margin hereunder are not received by the Administrative Agent on or prior to
the date required pursuant to Sections 5.1(c) and (d) hereof,
the Applicable Margin shall be determined at the highest level described in Annex
I and shall remain in effect until one Business Day after such time as the
required financial statements are received.


 


“Fixed Charge Coverage Ratio”: For any period of determination,
the ratio of


 


(a)                                  EBITDA minus Capital Expenditures not
financed with Indebtedness minus Equity Interest re-purchases by the
Borrowers’ Agent, minus equity retirements by the Borrowers’ Agent, minus
Adjusted Dividend Accrual,


 


to


 


(b)                                 the sum of Interest Expense and all required
principal payments with respect to Total Liabilities (including but not limited
to all payments with respect to Capital Lease Obligations of the Borrowers’
Agent),


 


in each case determined for said period on a consolidated basis in
accordance with GAAP; provided  that, for purposes of such
determination, that certain interest expense adjustment of $2,301,603 made by
the Borrower’s Agent pursuant to FAS 133 for the fiscal year ending August 31,
2005 shall be treated as an extraordinary item and EBITDA and Interest Expense
shall each be calculated without giving effect to such adjustment.


 


“Leverage Ratio”: At the time of any determination, the ratio of
(a) Funded Debt to (b) EBITDA; provided  that, for
purposes of such determination, that certain interest expense adjustment of
$2,301,603 made by the Borrower’s Agent pursuant to FAS 133 for the fiscal year
ending August 31, 2005 shall be treated as an extraordinary item and
EBITDA shall be calculated without giving effect to such adjustment.


 


“Termination Date”: The earlier of (a) November 30,
2006, and (b) the date on which the Revolving Commitments are terminated
pursuant to Section 7.2 hereof, provided that at the written
request of the Borrowers’ Agent to the Administrative Agent, the Revolving
Commitment may be renewed for any number of successive one-year periods in the
sole discretion of the Revolving Lenders, in which case the Termination Date
shall be extended for a period corresponding to each such renewal, if any.


 


“Tranche A2 Rate”: With respect to the First Tranche 2 Advance
in respect of the Tranche A2 Term Loans, a rate of interest per annum equal to
5.86%, and, with respect to the Second Tranche 2 Advance and the Final Tranche
2 Advance in respect of the


 


2





















 


Tranche A2 Term Loans, a
rate of interest per annum equal to the rate of interest of a LIBOR Rate
Advance with an Interest Period of 90 days plus the Applicable
Margin.


 


Section 1.1 of the Credit Agreement is
further amended by inserting therein, in correct alphabetical order, the
following new definition of “United Mills”:


 


“United Mills”: United Mills, a
Minnesota Cooperative, partially owned and affiliated with the Borrower’s
Agent, with it primary address at 340 Dupont Avenue NE, Renville, Minnesota.


 


2.2                               Annex
I. Annex I to the Credit Agreement is hereby amended and restated in
its entirety to read as Annex I attached hereto and incorporated herein
by reference.


 


2.3                               Procedure
for Term Loans. The first sentence of Section 2.2(b) of the
Credit Agreement is hereby amended and restated in its entirety to read as
follows:


 


Not later than 11:00 A.M. (Central time) three
LIBOR Business Days prior to the requested Term Loan Date (which, for Tranche
A1 Term Loans and Tranche B1 Term Loans shall be the Closing Date) if the Term
Loans are requested as LIBOR Rate Advances or the Second Tranche 2 Advance or
Final Tranche 2 Advance in respect of the Tranche A2 Term Loans and not later
than 11:00 A.M. (Central time) on the requested Term Loan Date (which, for
Tranche A1 Term Loans and Tranche B1 Term Loans, shall be the Closing Date) if
the Term Loans are requested as a Tranche A1 Advance, the First Tranche 2
Advance in respect of the Tranche A2 Term Loans, Base Rate Advances or Quoted
Rate Advances, the Borrowers’ Agent shall submit to the Administrative Agent a
written request for borrowing.


 


2.4                               Notes.
The second sentence of Section 2.3 of the Credit Agreement is hereby
amended and restated in its entirety to read as follows:


 


The Term Loans of each Lender shall be evidenced by
Term Notes payable to the order of such Lender in the principal amount equal to
such Lender’s Tranche A1 Term Loan Commitment Amount, Tranche A2 Term Loan
Commitment Amount, Tranche B1 Term Loan Commitment Amount or Tranche B2 Term Loan
Commitment Amount, as applicable; provided, however, that the
Term Loans in respect to the Tranche A2 Term Loan Commitment Amount may be
evidenced by one or more Term Notes in amounts equal to the maximum amount of
the First Tranche 2 Advance, the Second Tranche 2 Advance or the Final Tranche
2 Advance in respect to such Term Loans, or any combination thereof.


 


2.5                               Conversions
and Continuations. Section 2.4 of the Credit Agreement is hereby
amended by adding the following sentence to the end of such Section:


 


3





















 


Notwithstanding anything herein to the contrary, the
Second Tranche 2 Advance and the Final Tranche 2 Advance in respect of the
Tranche A2 Term Loans shall, on the last day of the 90 day Interest Period
applicable thereto, automatically be continued at the Tranche A2 Rate
applicable thereto with the same principal amount and the same Interest Period,
unless otherwise agreed to by the Tranche A2 Term Lender.


 


2.6                               Conditions
Precedent to Tranche A2 Term Loans. Section 3.2(f)(iv) of the
Credit Agreement is hereby deleted in its entirety.


 


2.7                               Financial
Statements. Section 5.1 of the Credit Agreement is hereby amended
by deleting subsections (c) through (e) thereof; inserting the
following new subsections as subsections (c) through (h) thereof; and
renumbering subsections (f) through (k) as subsections (i) through
(n), respectively.


 


(c)                                  Together
with the audited financial statements required under Section 5.1(a),
unaudited consolidating statements of income, cash flow and changes in the
members’ equity for the Borrowers’ Agent for the most recent fiscal year and a
consolidating balance sheet of the Borrowers’ Agent as at the end of such year,
setting forth in comparative form figures for the corresponding period for the
preceding fiscal year, accompanied by a certificate signed by the chief
financial officer of the Borrowers’ Agent stating that such financial
statements present fairly the financial condition of the Borrowers’ Agent and
that the same have been prepared in accordance with GAAP.


 


(d)                                 As
soon as available and in any event within 90 days after the end of each fiscal
year of United Mills, (i) the financial statements of United Mills
consisting of at least statements of income, cash flow and changes in the
members’ equity, and a consolidated balance sheet as at the end of such year,
setting forth in each case in comparative form corresponding figures from the
previous annual audit, certified without qualification by an independent
certified public accountant of recognized national standing selected by United
Mills and reasonably acceptable to the Administrative Agent.


 


(e)                                  As
soon as available and in any event within 60 days after the end of each
quarter, unaudited consolidated statements of income, cash flow and changes in
the members’ equity for the Borrowers’ Agent for such quarter and for the
period from the beginning of such fiscal year to the end of such quarter, and a
consolidated balance sheet of the Borrowers’ Agent as at the end of such quarter,
setting forth in comparative form figures for the corresponding period for the
preceding fiscal year, accompanied by a certificate signed by the chief
financial officer of the Borrowers’ Agent stating that such financial
statements present fairly the financial condition of the Borrowers’ Agent and
that the


 


4





















 


same have been prepared in accordance with GAAP
(except for the absence of footnotes and subject to year-end audit adjustments
as to the interim statements).


 


(f)                                    As
soon as available and in any event within 45 days after the end of each month,
other than the last month of each quarter, unaudited and unconsolidated
statements of income, cash flow and changes in the members’ equity for the
Borrowers’ Agent for such month and for the period from the beginning of such
fiscal year to the end of such month, and unconsolidated balance sheets of the
Borrowers’ Agent as at the end of such month, setting forth in comparative form
figures for the corresponding period for the preceding fiscal year, accompanied
by a certificate signed by the chief financial officer of the Borrowers’ Agent
stating that such financial statements present fairly the financial condition
of the Borrowers’ Agent and that the same have been prepared in accordance with
GAAP (except for the absence of footnotes and subject to year-end audit
adjustments as to the interim statements).


 


(g)                                 As
soon as practicable and in any event within 60 days after the end of each
fiscal quarter, a Compliance Certificate in the form attached hereto as Exhibit G
signed by the chief financial officer of the Borrowers’ Agent demonstrating in
reasonable detail compliance (or noncompliance, as the case may be) with Section 6.15,
Section 6.16, Section 6.17, Section 6.18, Section 6.19 and Section 6.21,
as at the end of such quarter and stating that as at the end of such quarter
there did not exist any Default or Event of Default or, if such Default or
Event of Default existed, specifying the nature and period of existence thereof
and what action the Borrowers propose to take with respect thereto.


 


(h)                                 As
soon as practicable and in any event within 45 days after the end of each
month, a Borrowing Base Certificate signed by the chief financial officer of
the Borrowers’ Agent, reporting the Borrowing Base as of the last day of the
month just ended.


 


2.8                               Tangible
Net Worth. Section 6.15 of the Credit Agreement is hereby amended
and restated to read in its entirety as follows:


 


The Borrower’s Agent will not permit its Tangible Net
Worth at any time to be less than $26,500,000, plus forty percent (40%)
of net earnings accumulated after August 31, 2005, plus one hundred
percent (100%) of all equity contributed after August 31, 2005.


 


2.9                               Leverage
Ratio. Section 6.18 of the Credit Agreement is hereby amended and
restated to read in its entirety as follows:


 


5





















 


The
Borrower’s Agent will not permit the Leverage Ratio, as of the last day of any
fiscal quarter for the four consecutive fiscal quarters ending on that date, to
be more than (a) for the period from November 30, 2005 to May 31,
2006, 6.50 to 1.0, or (b) for the period from June 1, 2006 to the
Term Loan Maturity Date, 4.00 to 1.0.


 


2.10                        Exhibit G.
Exhibit G to the Credit Agreement is hereby amended and restated in its
entirety to read as Exhibit G attached hereto and incorporated
herein by reference.


 


Section 3.                                          Conversion.
Upon this Amendment becoming effective (a) the Tranche A2 Rate
applicable to the Second Tranche 2 Advance in respect of the Tranche A2 Term
Loans, shall be the applicable Tranche A2 Rate as set forth in this Amendment,
and (b) the Term Notes issued and delivered pursuant to Sections 4.2 and
4.3 below, shall replace that certain Term Note then outstanding for the
Tranche A2 Term Loan Commitment Amount, provided that any amounts outstanding
thereunder shall be outstanding under the replacement notes issued and
delivered pursuant to Sections 4.2 and 4.3 below, as applicable.


 


Section 4.                                          Events of Default and Waiver.


 


4.1                               Events
of Default. Under Section 6.15 of the Credit Agreement, the
Borrower’s Agent was required to maintain Tangible Net Worth during each fiscal
quarter not less than $28,800,000 plus 40% of net earnings for such quarter
plus 100% of equity contributed at any time. Under Section 6.18 of the
Credit Agreement, the Borrower’s Agent was required to maintain a Leverage
Ratio, as of the last day of any fiscal quarter for the four consecutive
quarters ending on that date, of no more than 4.25 to 1.0. The Borrower’s Agent
did not comply with these covenants for the quarter that ended August 31,
2005.


 


4.2                               Waiver.
Upon the date on which this Amendment becomes effective, each Lender and the
Administrative Agent hereby waives the Borrower’s Event of Default described in
the preceding Section 4.1 (the “Existing Default”). The waiver of the
Existing Default set forth above is limited to the express terms thereof, and
nothing herein shall be deemed a waiver by the Lenders or the Administrative
Agent of any other term, condition, representation or covenant applicable to
the Borrower under the Credit Agreement (including but not limited to any
future occurrence similar to the Existing Default) or any of the other
agreements, documents or instruments executed and delivered in connection
therewith, or of the covenants described therein. The waivers set forth herein
shall not constitute a waiver by the Lenders or the Administrative Agent of any
other Event of Default, if any, under the Credit Agreement, and shall not be,
and shall not be deemed to be, a course of action with respect thereto upon
which the Borrower may rely in the future, and the Borrower hereby expressly
waives any claim to such effect.


 


6





















 


Section 5.                                          Effectiveness of Amendments. The amendments contained in this Amendment
shall become effective as of the effective date of this Amendment above upon
delivery by the Borrowers of, and compliance by the Borrowers with, the
following:


 


5.1                               This
Amendment, executed by a duly authorized officer of the Borrowers in sufficient
counterparts for each Lender.


 


5.2                               A
replacement Term Note, in the form attached hereto as Annex II-A, executed by a
duly authorized officer of the Borrowers, issued to the Tranche A2 Lender, and
evidencing the maximum amount of the First Tranche 2 Advance in respect of the
Tranche A2 Term Loans.


 


5.3                               A
Term Note, in the form attached hereto as Annex II-B, executed by a duly
authorized officer of the Borrowers, issued to the Tranche A2 Lender, and
evidencing the sum of the maximum amount of the Second Tranche 2 Advance plus
the maximum amount of the Final Tranche 2 Advance, in each case in respect of
the Tranche A2 Term Loans.


 


5.4                               Certified
copies of all documents evidencing any necessary corporate action, consent or
governmental or regulatory approval (if any) with respect to this Amendment.


 


5.5                               The
Borrowers shall have paid (a) to the Tranche A2 Term Lender a
nonrefundable servicing fee of $5,000, and (b) to the Administrative Agent
the annual administrative/collateral agent fee, as set forth in that certain
fee letter between the Borrowers and the Administrative Agent, dated as of July 20,
2004.


 


5.6                               The
Borrowers shall have satisfied such other conditions as specified by the
Lenders, including payment of all unpaid legal fees and expenses incurred by
the Administrative Agent and the Lenders through the date of this Amendment in
connection with the Credit Agreement and this Amendment.


 


Section 6.                                          Representations, Warranties,
Authority, No Adverse Claim.


 


6.1                               Reassertion
of Representations and Warranties, No Default. Each Borrower hereby
represents that on and as of the date hereof and after giving effect to this
Amendment (a) all of the representations and warranties contained in the
Credit Agreement are true, correct and complete in all respects as of the date
hereof as though made on and as of such date, except for changes permitted by
the terms of the Credit Agreement, and (b) there will exist no Default or
Event of Default under the Credit Agreement as amended by this Amendment on
such date which has not been waived by the Lenders.


 


6.2                               Authority,
No Conflict, No Consent Required. Each Borrower represents and warrants
that such Borrower has the power and legal right and authority to enter into
this Amendment and has duly authorized, as appropriate, the execution and
delivery of this Amendment and any other agreements and documents executed and


 


7





















 


delivered
by such Borrower in connection herewith or therewith (the “Amendment  Documents”)
by proper corporate action, and none of the Amendment Documents nor the
agreements contained herein or therein contravenes or constitutes a default
under any agreement, instrument or indenture to which such Borrower is a party
or a signatory or a provision of such Borrower’s Certificate of Formation or
Articles of Incorporation, as applicable, Bylaws or any other agreement or
requirement of law, or result in the imposition of any Lien on any of its
property under any agreement binding on or applicable to such Borrower or any
of its property except, if any, in favor of the Lenders. Each Borrower
represents and warrants that no consent, approval or authorization of or
registration or declaration with any Person, including but not limited to any
governmental authority, is required in connection with the execution and
delivery by such Borrower of the Amendment Documents or other agreements and
documents executed and delivered by such Borrower in connection therewith or the
performance of obligations of such Borrower therein described, except for those
which such Borrower has obtained or provided and as to which such Borrower has
delivered certified copies of documents evidencing each such action to the
Lenders.


 


6.3                               No
Adverse Claim. Each Borrower warrants, acknowledges and agrees that no
events have been taken place and no circumstances exist at the date hereof
which would give such Borrower a basis to assert a defense, offset or
counterclaim to any claim of the Lenders with respect to the Obligations.


 


Section 7.                                          Affirmation of Credit
Agreement, Further References, Affirmation of Security Interest. The Lenders and the Borrowers each hereby
ratify and confirm in all respects the Credit Agreement, as amended hereby, and
all terms, conditions and provisions of the Credit Agreement, except as amended
by this Amendment, shall remain unmodified and in full force and effect. All
references in any document or instrument to the Credit Agreement are hereby
amended and shall refer to the Credit Agreement as amended by this Amendment.
Each Borrower confirms to the Lenders that the Obligations are and continue to
be secured by the security interest granted by the Borrowers in favor of the
Lenders under the Security Documents, and all of the terms, conditions,
provisions, agreements, requirements, promises, obligations, duties, covenants
and representations of the Borrowers under such documents and any and all other
documents and agreements entered into with respect to the obligations under the
Credit Agreement are incorporated herein by reference and are hereby ratified
and affirmed in all respects by the Borrowers.


 


Section 8.                                          Merger and Integration,
Superseding Effect. This
Amendment, from and after the date hereof, embodies the entire agreement and
understanding between the parties hereto and supersedes and has merged into
this Amendment all prior oral and written agreements on the same subjects by
and between the parties hereto with the effect that this Amendment, shall
control with respect to the specific subjects hereof and thereof.


 


Section 9.                                          Severability. Whenever possible, each provision of this
Amendment and the other Amendment Documents and any other statement, instrument
or transaction contemplated hereby or thereby or relating hereto or thereto
shall be interpreted in such manner as to be effective, valid and enforceable
under the applicable law of any jurisdiction, but, if any


 


8





















 


provision of this Amendment, the other Amendment Documents or any other
statement, instrument or transaction contemplated hereby or thereby or relating
hereto or thereto shall be held to be prohibited, invalid or unenforceable
under the applicable law, such provision shall be ineffective in such jurisdiction
only to the extent of such prohibition, invalidity or unenforceability, without
invalidating or rendering unenforceable the remainder of such provision or the
remaining provisions of this Amendment, the other Amendment Documents or any
other statement, instrument or transaction contemplated hereby or thereby or
relating hereto or thereto in such jurisdiction, or affecting the
effectiveness, validity or enforceability of such provision in any other
jurisdiction.


 


Section 10.                                   Successors. The Amendment Documents shall be binding upon the Borrowers and the
Lenders and their respective successors and assigns, and shall inure to the
benefit of the Borrowers and the Lenders and the successors and assigns of the
Lenders.


 


Section 11.                                   Legal Expenses. As provided in Section 9.2 of the
Credit Agreement, the Borrowers agree to pay or reimburse the Administrative
Agent, upon execution of this Amendment, for all reasonable out-of-pocket
expenses paid or incurred by the Administrative Agent, including filing and
recording costs and fees, charges and disbursements of outside counsel to the
Administrative Agent in connection with the Credit Agreement, including in
connection with the negotiation, preparation, execution, collection and
enforcement of the Amendment Documents and all other documents negotiated,
prepared and executed in connection with the Amendment Documents, and in
enforcing the obligations of the Borrowers under the Amendment Documents, and
to pay and save the Lenders harmless from all liability for, any stamp or other
taxes which may be payable with respect to the execution or delivery of the
Amendment Documents, which obligations of the Borrowers shall survive any
termination of the Credit Agreement.


 


Section 12.                                   Headings. The headings of various sections of this
Amendment have been inserted for reference only and shall not be deemed to be a
part of this Amendment.


 


Section 13.                                   Counterparts. The Amendment Documents may be executed in
several counterparts as deemed necessary or convenient, each of which, when so
executed, shall be deemed an original, provided that all such counterparts
shall be regarded as one and the same document, and any party to the Amendment
Documents may execute any such agreement by executing a counterpart of such
agreement.


 


Section 14.                                   Governing Law. THE
AMENDMENT DOCUMENTS SHALL BE GOVERNED BY THE INTERNAL LAWS OF THE STATE OF
COLORADO, WITHOUT GIVING EFFECT TO CONFLICT OF LAW PRINCIPLES THEREOF.


 


[Remainder of page intentionally left blank.]


 


9





















 


IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed as of the
date and year first above written.


 


	
   

  	
  GOLDEN OVAL EGGS, LLC,

  	
   

  
	
   

  	
  as a Borrower and the
  Borrowers’ Agent

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  MIDWEST INVESTORS OF IOWA,

  	
   

  
	
   

  	
  COOPERATIVE,

  	
   

  
	
   

  	
  as a Borrower

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  COBANK, ACB,

  	
   

  
	
   

  	
  as a Lender and as the
  Administrative Agent

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  METROPOLITAN LIFE
  INSURANCE

  	
   

  
	
   

  	
  COMPANY,

  	
   

  
	
   

  	
  as a Lender

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
						



 


S-1





















 


ANNEX I


PRICING GRID


 


Revolving
Loans


 


	
  Leverage Ratio

  	
   

  	
  LIBOR

  Applicable Margin

  	
   

  	
  Base Rate

  Applicable Margin

  	
   

  	
  Applicable Commitment Fee

  Percentage

  	
   

  
	
  Less than
  1.25 to 1.00

  	
   

  	
  1.00

  	
  %

  	
  (1.50

  	
  )%

  	
  0.200

  	
  %

  
	
  Greater than
  or equal to 1.25 to 1.00 but less than 2.25 to 1.00

  	
   

  	
  1.25

  	
  %

  	
  (1.25

  	
  )%

  	
  0.250

  	
  %

  
	
  Greater than
  or equal to 2.25 to 1.00 but less than 3.00 to 1.00

  	
   

  	
  1.75

  	
  %

  	
  (0.75

  	
  )%

  	
  0.375

  	
  %

  
	
  Greater than
  or equal to 3.00 to 1.00 but less than 3.75 to 1.00

  	
   

  	
  2.25

  	
  %

  	
  (0.25

  	
  )%

  	
  0.375

  	
  %

  
	
  Greater than
  or equal to 3.75 to 1.00 but less than 4.50 to 1.00

  	
   

  	
  2.75

  	
  %

  	
  0.25

  	
  %

  	
  0.375

  	
  %

  
	
  Greater than
  or equal to 4.50 to 1.00 but less than 5.25 to 1.00

  	
   

  	
  3.25

  	
  %

  	
  0.75

  	
  %

  	
  0.50

  	
  %

  
	
  Greater than
  or equal to 5.25 to 1.00

  	
   

  	
  3.75

  	
  %

  	
  1.25

  	
  %

  	
  0.50

  	
  %

  



 


Tranche B
Term Loans and Second Tranche 2 Advance and Final Tranche 2 Advance of Tranche
A2 Term Loans


 


	
  Leverage Ratio

  	
   

  	
  LIBOR

  Applicable Margin

  	
   

  	
  Base Rate

  Applicable Margin

  (Tranche B Term Loans Only)

  	
   

  
	
  Less than
  1.25 to 1.00

  	
   

  	
  1.25

  	
  %

  	
  (1.35

  	
  )%

  
	
  Greater than
  or equal to 1.25 to 1.00 but less than 2.25 to 1.00

  	
   

  	
  1.50

  	
  %

  	
  (1.10

  	
  )%

  
	
  Greater than
  or equal to 2.25 to 1.00 but less than 3.00 to 1.00

  	
   

  	
  2.00

  	
  %

  	
  (0.60

  	
  )%

  
	
  Greater than
  or equal to 3.00 to 1.00 but less than 3.75 to 1.00

  	
   

  	
  2.50

  	
  %

  	
  (0.10

  	
  )%

  
	
  Greater than
  or equal to 3.75 to 1.00 but less than 4.50 to 1.00

  	
   

  	
  3.00

  	
  %

  	
  0.40

  	
  %

  
	
  Greater than
  or equal to 4.50 to 1.00 but less than 5.25 to 1.00

  	
   

  	
  3.50

  	
  %

  	
  0.90

  	
  %

  
	
  Greater than
  or equal to 5.25 to 1.00

  	
   

  	
  4.00

  	
  %

  	
  1.40

  	
  %

  



 





















 


ANNEX II-A


 


FORM OF REPLACEMENT TERM NOTE


 





















 


ANNEX II-B


 


FORM OF NOTE


 





















 


EXHIBIT G TO


FIRST AMENDMENT AND TO


CREDIT AGREEMENT


 


FORM OF COMPLIANCE CERTIFICATE


 


To: CoBank, ACB:


 


THE UNDERSIGNED HEREBY
CERTIFIES THAT:


 


(1)                                  I am the duly elected Chief Financial Officer
of Golden Oval Eggs, LLC (the “Borrowers’ Agent”);


 


(2)                                  I have reviewed the terms of the Credit
Agreement dated as of September 13, 2004 (as amended by a First Amendment
dated November   , 2005) among the Borrowers’ Agent, Midwest
Investors of Iowa, CoBank, ACB, Metropolitan Life Insurance Company and the
other lenders party thereto (the “Credit Agreement”) and I have made, or
have caused to be made under my supervision, a detailed review of the
transactions and conditions of the Borrowers during the accounting period
covered by the Attachment hereto;


 


(3)                                  The examination described in paragraph (2) did
not disclose, and I have no knowledge, whether arising out of such examinations
or otherwise, of the existence of any condition or event which constitutes a
Default or an Event of Default (as such terms are defined in the Credit
Agreement) during or at the end of the accounting period covered by the
Attachment hereto or as of the date of this Certificate, except as described
below (or on a separate attachment to this Certificate). The exceptions listing
in detail the nature of each condition or event, the period during which it has
existed and the action which the Borrowers have taken, are taking or propose to
take with respect to each such condition or event are as follows:


 


 


 


 


(4)                                  The computations of the ratios and/or
financial restrictions set forth on the Attachment are true and correct as of
the end of the accounting period covered by such Attachment.


 


The foregoing certification,
together with the computations in the Attachment hereto and the financial
statements delivered with this Certificate in support hereof, are made and
delivered this day of                              
,                       
pursuant to Section 5.1(g) of the Credit Agreement.


 


	
   

  	
  GOLDEN OVAL EGGS, LLC,

  	
   

  
	
   

  	
  as Borrowers’ Agent

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
							



 





















 


ATTACHMENT TO COMPLIANCE CERTIFICATE

AS OF               ,
    WHICH PERTAINS

TO THE PERIOD FROM                 ,
       

TO                 ,         


 


	
  Section 6.15:

  	
  A.

  	
  Aggregate
  Equity

  	
   

  	
  $

  	
   

  
	
  Tangible Net Worth

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  B.

  	
  Intangible
  Assets

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  C.

  	
  Purchase
  Price of Acquired Business Assets

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  D.

  	
  Book Value
  of Acquired Business Assets

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  E.

  	
  Net Earnings
  accumulated after August 31, 2005

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  $

  	
   

  
	
   

  	
  F.

  	
  Equity
  Contributed after August 31, 2005

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  $

  	
   

  
	
   

  	
  G.

  	
  Actual
  Tangible Net Worth [(A-B) - (C-D)]

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  H.

  	
  Minimum
  Tangible Net Worth [$26,500,000 + (40% x E) + F]

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 6.16:

  	
  A.

  	
  Current
  Assets

  	
   

  	
  $

  	
   

  
	
  Current Ratio

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  B.

  	
  Current
  Liabilities

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  C.

  	
  Current
  Ratio (Ratio of (A) to (B))

  	
   

  	
  to 1.0

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  D.

  	
  Minimum
  Current Ratio

  	
   

  	
  1.25 to 1.00

  	
   

  



 


G-3





















 


	
  Section 6.17:

  	
  A.

  	
  Current
  Assets

  	
   

  	
  $

  	
   

  
	
  Working Capital

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  B.

  	
  Current Liabilities

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  C.

  	
  Working
  Capital (A-B)

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Minimum prior to January 31, 2006

  	
   

  	
  $

  	
  2,000,000

  	
   

  
	
   

  	
   

  	
  Minimum on January 31, 2006 and
  thereafter

  	
   

  	
  $

  	
  7,000,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 6.18:

  	
  A.

  	
  Funded Debt

  	
   

  	
  $

  	
   

  
	
  Leverage Ratio

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  B.

  	
  EBITDA

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  a.  Consolidated Net Income, plus

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
  b.  Interest Expense, plus

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
  c.  income
  tax expense, plus

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
  d.  non-layer
  depreciation, plus

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
  e.  amortization,
  plus

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
  f.   the interest expense adjustment made
  pursuant to FAS 133 for the fiscal year ending August 31, 2005

  	
   

  	
  $

  	
  2,301,603

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  C.

  	
  Total
  (EBITDA)

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  D.

  	
  Leverage
  Ratio (A/B)

  	
   

  	
  to 1.0

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  E.

  	
  Maximum
  Leverage Ratio

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  a.  November 30, 2005 to May 31, 2006

  	
   

  	
  6.50 to 1.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  b.  June 1, 2006 to Maturity

  	
   

  	
  4.00 to 1.00

  	
   

  



 


G-4





















 


	
  Section 6.19:

  	
  A.

  	
  EBITDA

  	
   

  	
  $

  	
   

  
	
  Fixed Charge Coverage Ratio

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  B.

  	
  Capital
  Expenditures not financed with Indebtedness

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  C.

  	
  Equity
  Interest re-purchases by the Borrowers’ Agent

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  D.

  	
  Equity
  retirements by the Borrowers’ Agent

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  E.

  	
  Adjusted
  Dividend Accrual

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  F.

  	
  Fixed
  Charges [A-(B+C+D+E)]

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  G.

  	
  Sum of
  Interest Expense and all required principal payments with respect to Total
  Liabilities

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  H.

  	
  Fixed Charge
  Coverage Ratio [F/G]

  	
   

  	
  to 1.0

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  I.

  	
  Minimum
  Fixed Charge Coverage Ratio

  	
   

  	
  1.15 to 1.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 6.21:

  	
  A.

  	
  Finished egg
  production under contract

  	
   

  	
  lbs.

  	
   

  
	
  Risk Management

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  B.

  	
  Total
  finished egg production

  	
   

  	
  lbs.

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  C.

  	
  Contracted
  Production [100 x (A/B)]

  	
   

  	
   

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  D.

  	
  Minimum
  Contracted Production

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  a.  Current Ratio < 1.50 to 1.00 (must be >
  1.25 to 1.00 pursuant to Section 6.17)

  	
   

  	
  > 50

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  b.  Current Ratio > 1.50 to 1.00 but <
  2.00 to 1.00

  	
   

  	
  > 40

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  c.  Current Ratio > 2.00 to 1.00

  	
   

  	
  > 30

  	
  %

  



 


G-5