**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 liabilitycompany, 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 signatorieshereto (individually, a “Lender” and, collectively, the “Lenders”),COBANK, ACB, a federally charted instrumentality under the Farm Credit Act of1971, 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 theBorrowers entered into a Credit Agreement dated as of September 13, 2004 (the“Credit Agreement”); and

 

B.                                     The Borrowers desire to amend certainprovisions of the Credit Agreement, and the Administrative Agent and theLenders have agreed to make such amendments, subject to the terms andconditions set forth in this Amendment.

 

**AGREEMENT**

 

**NOW, THEREFORE,**for good and valuable consideration, the receipt and adequacy of whichare hereby acknowledged, the parties hereto hereby covenant and agree to bebound as follows:

 

**Section 1.****                                         ****Capitalized Terms**. Capitalized terms used herein and nototherwise defined herein shall have the meanings assigned to them in the CreditAgreement, unless the context shall otherwise require.

 

**Section 2.****                                         ****Amendments**. The Credit Agreement is hereby amended asfollows:

 

**2.1****                              ****Definitions****.**The definitions of “Applicable Margin,”“Fixed ChargeCoverage Ratio,” “Leverage Ratio,” “TerminationDate” and “Tranche A2 Rate” contained in Section 1.1 of theCredit Agreement are hereby amended and restated to read in their entireties asfollows:

 

“Applicable Margin”: Subject to the last sentence of thisdefinition, with respect to computation of the applicable interest rate or theApplicable Commitment Fee Percentage on Advances or Commitments under theRevolving Loans, the Second Tranche 2 Advances and the Final Tranche 2 Advancesin respect of the Tranche A2 Term Loans, the Tranche B Term Loans or the Letterof Credit Fee, as the case may be, the margin payable by the Borrowers withrespect thereto, as set forth and described in Annex I, established asof the first day of each Fiscal Quarter after the Compliance Certificaterequired by Section 5.1 is delivered as of the last day of the nextpreceding

 

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FiscalQuarter (i.e. adjustments shall be made one Fiscal Quarter in arrears); provided,however, that any adjustment in the Applicable Margin shall not becomeeffective until the Administrative Agent shall have received the ComplianceCertificate and related financial statements relating to the last day of suchnext 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 Sections5.1(c) and (d) necessary to establish the ApplicableMargin hereunder are not received by the Administrative Agent on or prior tothe date required pursuant to Sections 5.1(c) and (d) hereof,the Applicable Margin shall be determined at the highest level described in AnnexI and shall remain in effect until one Business Day after such time as therequired financial statements are received.

 

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

 

(a)                                  EBITDA minus Capital Expenditures notfinanced with Indebtedness minus Equity Interest re-purchases by theBorrowers’ Agent, minus equity retirements by the Borrowers’ Agent, minusAdjusted Dividend Accrual,

 

to

 

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

 

in each case determined for said period on a consolidated basis inaccordance with GAAP; providedthat, for purposes of suchdetermination, that certain interest expense adjustment of $2,301,603 made bythe 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 Expenseshall 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; providedthat, forpurposes 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 yearending August 31, 2005 shall be treated as an extraordinary item andEBITDA 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 terminatedpursuant to Section 7.2 hereof, provided that at the writtenrequest of the Borrowers’ Agent to the Administrative Agent, the RevolvingCommitment may be renewed for any number of successive one-year periods in thesole discretion of the Revolving Lenders, in which case the Termination Dateshall be extended for a period corresponding to each such renewal, if any.

 

“Tranche A2 Rate”: With respect to the First Tranche 2 Advancein respect of the Tranche A2 Term Loans, a rate of interest per annum equal to5.86%, and, with respect to the Second Tranche 2 Advance and the Final Tranche2 Advance in respect of the

 

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Tranche A2 Term Loans, arate of interest per annum equal to the rate of interest of a LIBOR RateAdvance with an Interest Period of 90 days plus the ApplicableMargin.

 

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

 

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

 

**2.2****                               AnnexI**. Annex I to the Credit Agreement is hereby amended and restated inits entirety to read as Annex I attached hereto and incorporated hereinby reference.

 

**2.3****                               Procedurefor Term Loans**. The first sentence of Section 2.2(b) of theCredit Agreement is hereby amended and restated in its entirety to read asfollows:

 

Not later than 11:00 A.M. (Central time) threeLIBOR Business Days prior to the requested Term Loan Date (which, for TrancheA1 Term Loans and Tranche B1 Term Loans shall be the Closing Date) if the TermLoans are requested as LIBOR Rate Advances or the Second Tranche 2 Advance orFinal Tranche 2 Advance in respect of the Tranche A2 Term Loans and not laterthan 11:00 A.M. (Central time) on the requested Term Loan Date (which, forTranche A1 Term Loans and Tranche B1 Term Loans, shall be the Closing Date) ifthe Term Loans are requested as a Tranche A1 Advance, the First Tranche 2Advance in respect of the Tranche A2 Term Loans, Base Rate Advances or QuotedRate Advances, the Borrowers’ Agent shall submit to the Administrative Agent awritten request for borrowing.

 

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

 

The Term Loans of each Lender shall be evidenced byTerm Notes payable to the order of such Lender in the principal amount equal tosuch Lender’s Tranche A1 Term Loan Commitment Amount, Tranche A2 Term LoanCommitment Amount, Tranche B1 Term Loan Commitment Amount or Tranche B2 Term LoanCommitment Amount, as applicable; provided, however, that theTerm Loans in respect to the Tranche A2 Term Loan Commitment Amount may beevidenced by one or more Term Notes in amounts equal to the maximum amount ofthe First Tranche 2 Advance, the Second Tranche 2 Advance or the Final Tranche2 Advance in respect to such Term Loans, or any combination thereof.

 

**2.5****                               Conversionsand Continuations**. Section 2.4 of the Credit Agreement is herebyamended by adding the following sentence to the end of such Section:

 

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

 

**2.6****                               ConditionsPrecedent to Tranche A2 Term Loans**. Section 3.2(f)(iv) of theCredit Agreement is hereby deleted in its entirety.

 

**2.7****                               FinancialStatements**. Section 5.1 of the Credit Agreement is hereby amendedby deleting subsections (c) through (e) thereof; inserting thefollowing new subsections as subsections (c) through (h) thereof; andrenumbering subsections (f) through (k) as subsections (i) through(n), respectively.

 

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

 

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

 

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

 

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

 

(f)                                    Assoon 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 unconsolidatedstatements of income, cash flow and changes in the members’ equity for theBorrowers’ Agent for such month and for the period from the beginning of suchfiscal year to the end of such month, and unconsolidated balance sheets of theBorrowers’ Agent as at the end of such month, setting forth in comparative formfigures for the corresponding period for the preceding fiscal year, accompaniedby a certificate signed by the chief financial officer of the Borrowers’ Agentstating that such financial statements present fairly the financial conditionof the Borrowers’ Agent and that the same have been prepared in accordance withGAAP (except for the absence of footnotes and subject to year-end auditadjustments as to the interim statements).

 

(g)                                 Assoon as practicable and in any event within 60 days after the end of eachfiscal quarter, a Compliance Certificate in the form attached hereto as Exhibit Gsigned by the chief financial officer of the Borrowers’ Agent demonstrating inreasonable 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 quarterthere did not exist any Default or Event of Default or, if such Default orEvent of Default existed, specifying the nature and period of existence thereofand what action the Borrowers propose to take with respect thereto.

 

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

 

**2.8****                               TangibleNet Worth**. Section 6.15 of the Credit Agreement is hereby amendedand restated to read in its entirety as follows:

 

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

 

**2.9****                               LeverageRatio**. Section 6.18 of the Credit Agreement is hereby amended andrestated to read in its entirety as follows:

 

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TheBorrower’s Agent will not permit the Leverage Ratio, as of the last day of anyfiscal quarter for the four consecutive fiscal quarters ending on that date, tobe 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 theTerm Loan Maturity Date, 4.00 to 1.0.

 

**2.10****                        Exhibit G**.Exhibit G to the Credit Agreement is hereby amended and restated in itsentirety to read as Exhibit G attached hereto and incorporatedherein by reference.

 

**Section 3.****                                          Conversion.**Upon this Amendment becoming effective (a) the Tranche A2 Rateapplicable to the Second Tranche 2 Advance in respect of the Tranche A2 TermLoans, 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 and4.3 below, shall replace that certain Term Note then outstanding for theTranche A2 Term Loan Commitment Amount, provided that any amounts outstandingthereunder shall be outstanding under the replacement notes issued anddelivered pursuant to Sections 4.2 and 4.3 below, as applicable.

 

**Section 4.****                                         ****Events of Default and Waiver**.

 

**4.1****                               Eventsof Default**. Under Section 6.15 of the Credit Agreement, theBorrower’s Agent was required to maintain Tangible Net Worth during each fiscalquarter not less than $28,800,000 plus 40% of net earnings for such quarterplus 100% of equity contributed at any time. Under Section 6.18 of theCredit Agreement, the Borrower’s Agent was required to maintain a LeverageRatio, as of the last day of any fiscal quarter for the four consecutivequarters ending on that date, of no more than 4.25 to 1.0. The Borrower’s Agentdid 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 theAdministrative Agent hereby waives the Borrower’s Event of Default described inthe preceding Section 4.1 (the “Existing Default”). The waiver of theExisting Default set forth above is limited to the express terms thereof, andnothing herein shall be deemed a waiver by the Lenders or the AdministrativeAgent of any other term, condition, representation or covenant applicable tothe Borrower under the Credit Agreement (including but not limited to anyfuture occurrence similar to the Existing Default) or any of the otheragreements, documents or instruments executed and delivered in connectiontherewith, or of the covenants described therein. The waivers set forth hereinshall not constitute a waiver by the Lenders or the Administrative Agent of anyother 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 uponwhich the Borrower may rely in the future, and the Borrower hereby expresslywaives any claim to such effect.

 

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**Section 5.****                                         ****Effectiveness of Amendments**. The amendments contained in this Amendmentshall become effective as of the effective date of this Amendment above upondelivery by the Borrowers of, and compliance by the Borrowers with, thefollowing:

 

**5.1****                              **ThisAmendment, executed by a duly authorized officer of the Borrowers in sufficientcounterparts for each Lender.

 

**5.2****                              **Areplacement Term Note, in the form attached hereto as Annex II-A, executed by aduly authorized officer of the Borrowers, issued to the Tranche A2 Lender, andevidencing the maximum amount of the First Tranche 2 Advance in respect of theTranche A2 Term Loans.

 

**5.3****                              **ATerm Note, in the form attached hereto as Annex II-B, executed by a dulyauthorized officer of the Borrowers, issued to the Tranche A2 Lender, andevidencing the sum of the maximum amount of the Second Tranche 2 Advance plusthe maximum amount of the Final Tranche 2 Advance, in each case in respect ofthe Tranche A2 Term Loans.

 

**5.4****                              **Certifiedcopies of all documents evidencing any necessary corporate action, consent orgovernmental or regulatory approval (if any) with respect to this Amendment.

 

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

 

**5.6****                              **TheBorrowers shall have satisfied such other conditions as specified by theLenders, including payment of all unpaid legal fees and expenses incurred bythe Administrative Agent and the Lenders through the date of this Amendment inconnection with the Credit Agreement and this Amendment.

 

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

 

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

 

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

 

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deliveredby such Borrower in connection herewith or therewith (the “AmendmentDocuments”)by proper corporate action, and none of the Amendment Documents nor theagreements contained herein or therein contravenes or constitutes a defaultunder any agreement, instrument or indenture to which such Borrower is a partyor a signatory or a provision of such Borrower’s Certificate of Formation orArticles of Incorporation, as applicable, Bylaws or any other agreement orrequirement of law, or result in the imposition of any Lien on any of itsproperty under any agreement binding on or applicable to such Borrower or anyof its property except, if any, in favor of the Lenders. Each Borrowerrepresents and warrants that no consent, approval or authorization of orregistration or declaration with any Person, including but not limited to anygovernmental authority, is required in connection with the execution anddelivery by such Borrower of the Amendment Documents or other agreements anddocuments executed and delivered by such Borrower in connection therewith or theperformance of obligations of such Borrower therein described, except for thosewhich such Borrower has obtained or provided and as to which such Borrower hasdelivered certified copies of documents evidencing each such action to theLenders.

 

**6.3****                               NoAdverse Claim.**Each Borrower warrants, acknowledges and agrees that noevents have been taken place and no circumstances exist at the date hereofwhich would give such Borrower a basis to assert a defense, offset orcounterclaim to any claim of the Lenders with respect to the Obligations.

 

**Section 7.****                                         ****Affirmation of CreditAgreement, Further References, Affirmation of Security Interest**. The Lenders and the Borrowers each herebyratify and confirm in all respects the Credit Agreement, as amended hereby, andall terms, conditions and provisions of the Credit Agreement, except as amendedby this Amendment, shall remain unmodified and in full force and effect. Allreferences in any document or instrument to the Credit Agreement are herebyamended and shall refer to the Credit Agreement as amended by this Amendment.Each Borrower confirms to the Lenders that the Obligations are and continue tobe secured by the security interest granted by the Borrowers in favor of theLenders under the Security Documents, and all of the terms, conditions,provisions, agreements, requirements, promises, obligations, duties, covenantsand representations of the Borrowers under such documents and any and all otherdocuments and agreements entered into with respect to the obligations under theCredit Agreement are incorporated herein by reference and are hereby ratifiedand affirmed in all respects by the Borrowers.

 

**Section 8.****                                         ****Merger and Integration,Superseding Effect**. ThisAmendment, from and after the date hereof, embodies the entire agreement andunderstanding between the parties hereto and supersedes and has merged intothis Amendment all prior oral and written agreements on the same subjects byand between the parties hereto with the effect that this Amendment, shallcontrol with respect to the specific subjects hereof and thereof.

 

**Section 9.****                                         ****Severability****.**Whenever possible, each provision of thisAmendment and the other Amendment Documents and any other statement, instrumentor transaction contemplated hereby or thereby or relating hereto or theretoshall be interpreted in such manner as to be effective, valid and enforceableunder the applicable law of any jurisdiction, but, if any

 

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provision of this Amendment, the other Amendment Documents or any otherstatement, instrument or transaction contemplated hereby or thereby or relatinghereto or thereto shall be held to be prohibited, invalid or unenforceableunder the applicable law, such provision shall be ineffective in such jurisdictiononly to the extent of such prohibition, invalidity or unenforceability, withoutinvalidating or rendering unenforceable the remainder of such provision or theremaining provisions of this Amendment, the other Amendment Documents or anyother statement, instrument or transaction contemplated hereby or thereby orrelating hereto or thereto in such jurisdiction, or affecting theeffectiveness, validity or enforceability of such provision in any otherjurisdiction.

 

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

 

**Section 11.****                                  ****Legal Expenses**. As provided in Section 9.2 of theCredit Agreement, the Borrowers agree to pay or reimburse the AdministrativeAgent, upon execution of this Amendment, for all reasonable out-of-pocketexpenses paid or incurred by the Administrative Agent, including filing andrecording costs and fees, charges and disbursements of outside counsel to theAdministrative Agent in connection with the Credit Agreement, including inconnection with the negotiation, preparation, execution, collection andenforcement of the Amendment Documents and all other documents negotiated,prepared and executed in connection with the Amendment Documents, and inenforcing the obligations of the Borrowers under the Amendment Documents, andto pay and save the Lenders harmless from all liability for, any stamp or othertaxes which may be payable with respect to the execution or delivery of theAmendment Documents, which obligations of the Borrowers shall survive anytermination of the Credit Agreement.

 

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

 

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

 

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

 

[Remainder of page intentionally left blank.]

 

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**IN WITNESS WHEREOF,**the parties hereto have caused this Amendment to be executed as of thedate 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:                                       |   |   |
|        |                                              |        |  |  |  |

 

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ANNEX I

PRICING GRID

 

**RevolvingLoans**

 
| **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 BTerm Loans and Second Tranche 2 Advance and Final Tranche 2 Advance of TrancheA2 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                                                          | %          |

 

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**ANNEX II-A**

 

**FORM OF REPLACEMENT TERM NOTE**

 

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**ANNEX II-B**

 

**FORM OF NOTE**

 

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EXHIBIT G TO

FIRST AMENDMENT AND TO

CREDIT AGREEMENT

 

**FORM OF COMPLIANCE CERTIFICATE**

 

To: CoBank, ACB:

 

THE UNDERSIGNED HEREBYCERTIFIES THAT:

 

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

 

(2)                                  I have reviewed the terms of the CreditAgreement dated as of September 13, 2004 (as amended by a First Amendmentdated November   , 2005) among the Borrowers’ Agent, MidwestInvestors of Iowa, CoBank, ACB, Metropolitan Life Insurance Company and theother lenders party thereto (the “Credit Agreement”) and I have made, orhave caused to be made under my supervision, a detailed review of thetransactions and conditions of the Borrowers during the accounting periodcovered by the Attachment hereto;

 

(3)                                  The examination described in paragraph (2) didnot disclose, and I have no knowledge, whether arising out of such examinationsor otherwise, of the existence of any condition or event which constitutes aDefault or an Event of Default (as such terms are defined in the CreditAgreement) during or at the end of the accounting period covered by theAttachment hereto or as of the date of this Certificate, except as describedbelow (or on a separate attachment to this Certificate). The exceptions listingin detail the nature of each condition or event, the period during which it hasexisted and the action which the Borrowers have taken, are taking or propose totake with respect to each such condition or event are as follows:

 

 

 

 

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

 

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

 
|   | GOLDEN OVAL EGGS, LLC,   |   |
|--------|--------------------------|--------|
|   | as Borrowers’ Agent |
|   |                     |   |   |
|   | By:                      |   |   |
|   | Name:                    |   |   |
|   | Title:                   |   |   |
|        |                          |        |  |  |  |  |

 

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ATTACHMENT TO COMPLIANCE CERTIFICATEAS OF               ,    WHICH PERTAINSTO 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

----