Exhibit 4(a)
Exhibit 4(a)
FIRST AMENDED LINE OF CREDIT LOAN AGREEMENT
THIS FIRST AMENDED LINE OF CREDIT LOAN AGREEMENT (the
"Agreement"), executed this 25th day of February, 1994, by and
between MIDWEST GRAIN PRODUCTS, INC., a corporation
organized under the laws of the state of Kansas and having its
principal place of business in Atchison, Kansas ("Borrower"), and
Commerce Bank of Kansas City, N.A., a national banking
association, having its principal place of business in Kansas
City, Missouri ("Bank").
WHEREAS, Borrower desires to establish a line of credit with
Bank to provide working capital and capital expenditures; and
WHEREAS, Bank desires to extend such line of credit upon the
terms and conditions set forth in this Agreement.
NOW, THEREFORE, in consideration of the premises and mutual
agreements contained in this Agreement, the parties agree as
follows:
ARTICLE I
Line of Credit
Section 1.1. General Terms. Subject to the terms of this
Agreement, Bank will lend Borrower, from time to time, until the
termination hereof, such sums as Borrower may request, in minimum
increments of $100,000, which shall not exceed in the aggregate
principal amount at any one time outstanding the sum of Twenty
Million and no/100 Dollars ($20,000,000.00) (the "Line of Credit
Loan").
Bank's obligation to lend hereunder may be terminated by
Bank at any time in Bank's sole discretion, or if no such
termination is made, then on October 1, 1997. Each advance under
the Line of Credit Loan is at the option of Bank and Bank has no
obligation to make advances. In addition this Agreement shall be
deemed to automatically terminate if the occurrence of an event
pursuant to Section 4.1 causes the Line of Credit Note to become
immediately due and payable. The inclusion of monthly interest
payments, events of default and an alternate maturity date does
not alter the discretionary nature of the line of credit.
Section 1.2. Commitment Fee. Borrower shall pay a fee equal to
1/4% per annum on the unused portion of the Line of Credit Loan.
Such fee shall be paid quarterly in arrears.
Section 1.3. Note. Borrower agrees to execute and deliver to
Bank the Line of Credit Note to evidence the Line of Credit Loan.
Each advance made thereunder, together with each repayment made
by Borrower, shall be evidenced by a notation dated the date of
the advance or repayment and recorded by Bank on the schedule
appearing on the reverse side of or attached to the Line of
Credit Note. The aggregate unpaid principal amount of the Line
of Credit Note set forth on the schedule shall be conclusively
presumed to reflect the amounts advanced and repaid, and the
outstanding principal balance of the Line of Credit Loan.
Section 1.4. Principal Payment. In the event of a default as
defined in Section 4.1 or on October 1, 1997, the principal
balance of the Line of Credit Note together with all accrued
interest shall become immediately due and payable.
Section 1.5. Interest. If the outstanding balance is less than
$500,000, the line of credit shall bear interest at a per annum
rate equal to the Prime Rate. If the outstanding balance is
$500,000 or greater, the line of credit shall bear interest at
the greater of either (1) the Prime Rate, minus 1%, or (2) the
Federal Funds Rate plus 1.50%.
Interest will be payable monthly, in arrears, and at maturity,
whether by acceleration or otherwise. Interest will be computed
on the actual days outstanding based upon a year consisting of
360 days.
"Prime Rate" means the Prime Rate of interest established from
time to time by Commerce Bank and designated as such for its
internal convenience, and no representation is made that the
Prime Rate is the best, the lowest or a favored rate of interest.
The rate of interest, if tied to the Prime Rate, shall change
with and be effective on the date of each change in the Prime
Rate.
"Federal Funds Rate" means the effective Federal Funds Rate as
quoted by the Federal Reserve Bank of New York on a daily basis.
The Federal Funds Rate is adjusted daily.
Section 1.6. Purpose. Borrower represents the purpose of the
Line of Credit Loan is to provide short term working capital and
capital expenditures.
Section 1.7. Disbursements. Bank will credit the proceeds of
any borrowing hereunder to Borrower's deposit account maintained
with Bank.
Section 1.8. Condition of Loans. Any advance under the Line of
Credit Note is subject to the condition precedent that no event
of default described in Section 4.1 shall have occurred, and that
the Line of Credit has not been terminated. Each request for a
borrowing under the Line of Credit Note shall be deemed to
constitute a representation by Borrower at the time of the
request that no event of default as defined in Section 4.1 exists
or is imminent and that the representations and warranties of
Borrower contained in this Agreement are true in all material
respects on or as of the date of borrowing.
ARTICLE II
Warranties and Representations
Section 2.1. Good Standing. The Borrower is a corporation duly
organized and in good standing, under the laws of the state of
Kansas, and has the power to own its property and to carry on its
business and is in good standing in each jurisdiction in which
the character of the properties owned by it or in which the
transaction of its business makes such qualifications necessary.
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Section 2.2. Authority. The Borrower has full power and
authority to enter into this Agreement, to make the borrowing
hereunder, and to execute and deliver the Line of Credit Note,
all of which has been duly authorized by all proper and necessary
corporate action. No consent or approval of stockholders is
required as a condition to the validity of this Agreement or the
Line of Credit Loan.
Section 2.3. Binding Agreement. This Agreement constitutes, and
the Line of Credit Note when issued and delivered pursuant
hereto, for value received, will constitute, the valid and
legally binding obligations of the Borrower in accordance with
all stated terms.
Section 2.4. Litigation. There are no proceedings pending, or,
so far as the officers of the Borrower know threatened, which
will materially adversely affect the financial condition or
operations of the Borrower or any subsidiary.
Section 2.5. No Conflicting Agreements. There are no charter,
bylaw, or preference stock provisions of the Borrower and no
provision of any existing mortgage, indenture, contract or
agreement binding on the Borrower or affecting its property,
which would conflict with or in any way prevent the execution,
delivery, or carrying out of the terms of this Agreement and of
the Line of Credit Note.
Section 2.6. Taxes. The Borrower has filed all Federal, State
and other tax and similar returns and has paid or provided for
the payment of all taxes and assessments due thereunder
including, without limitation, all withholding, FICA and
franchise taxes.
Section 2.7. Financial Statements. There have been no material
changes in the Borrower's financial statements dated June 30,
1993.
ARTICLE III
Covenants
So long as this Agreement remains in effect or as long as
there is any principal or interest due on the Line of Credit
Note, Borrower agrees as follows:
Section 3.1. Comply with all Company Covenants as defined and
contained in Section 5 of the Note Agreement dated as of August
1, 1993, between Borrower and the Principal Mutual Life Insurance
Company (the "Principal Agreement") including, but not limited
to, the following:
(a) Current Ratio. Maintain a Current Ratio of not less
than 1.50 to 1.00.
(b) Consolidated Tangible Net Worth. Maintain Consolidated
Tangible Net Worth at an amount not less than THE GREATER OF (I)
$70,000,000 and (ii) the sum of $70,000,000 plus 50% of
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Consolidated Net Income for the period from and after March 31,
1993 to the date of determination thereof (considered as a single
accounting period).
(c) Funded Debt. Not permit Consolidated Funded Debt to
exceed 60% of total capitalization.
(d) Debt/Worth. Maintain a ratio of Debt to Tangible Net
Worth of not more than 2.50 to 1.00.
(e) Fixed Charges Coverage Ratio. Maintain a ratio of Net
Income Available for Fixed Charges of not less than 1.50 to 1.00.
The Company Covenants as of the date of this Agreement shall
survive any modification or termination of the Principal
Agreement.
Section 3.2 Promptly pay all taxes, assessments and other
government charges (unless such payments are being contested in
good faith).
Section 3.3 Maintain insurance on all its properties in such
amounts and against such hazards as is customary in Borrower's
industry.
Section 3.4 Maintain its books and records and account for
financial transactions in accordance with generally accepted
accounting principals.
Section 3.5 Borrower shall furnish Commerce Bank with the
following information:
(a) Its annual audited financial statement within 90 days
of its fiscal year-end, in a form and prepared by a certified
public accounting firm acceptable to Commerce Bank;
(b) Its quarterly financial statements within 45 days after
the end of each quarter; and
(c) Such other information as Commerce Bank may reasonably
request from time to time.
ARTICLE IV
Defaults
Section 4.1. Events of Default. The entire unpaid balance of
the Line of Credit Note shall become immediately due and payable
without demand, presentment, notice or protest of any kind (all
of which are expressly waived), upon the happening of any of the
following events of default:
(a) Nonpayment of any interest or any principal payment
owing under the Line of Credit Note whether at maturity or
otherwise; or
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(b) If any certificate, statement, representation, warranty
or audit furnished by or on behalf of the Borrower in connection
with this Agreement, including those contained herein, or as an
inducement by Borrower to enter into, modify, extend, or renew
this Agreement shall prove to be false in any material respect,
or if Borrower shall have omitted the listing of a substantial
contingent or unliquidated liability or claim against Borrower
or, if on the date of execution of this Agreement there shall
have been any materially adverse change in any of the facts
disclosed by any such certificate, statement, representation,
warranty or audit, which change shall not have been disclosed by
Borrower to Bank at or prior to the time of execution; or
(c) If Borrower shall default in the due performance or
observance of any covenant undertaken by it under this Agreement;
or
(d) Default in the performance of the obligations of
Borrower pursuant to any other note or agreement binding on
Borrower including, but not limited to the Principal Agreement;
or
(e) Borrower shall be adjudicated a bankrupt, or make a
general assignment for the benefit of its creditors, or there are
instituted by or against Borrower any type of bankruptcy
proceedings or any proceeding for the liquidation or the
termination of Borrower's affairs, or the appointment of a
receiver or trustee for Borrower or for any of Borrower's assets,
or a properly filed petition for Borrower's reorganization under
the Bankruptcy Code or otherwise is approved, or Borrower files a
petition for arrangement under Chapter 11 of the Bankruptcy Code
or any similar statute.
(f) Any judgment or judgments, writ or writs, or warrant or
warrants of attachment, or any similar process or processes shall
be entered or filed against the Borrower or any Subsidiary or
against any of their respective property or assets and remain
unstayed and undischarged for a period of 60 days from the date
of its entry.
Section 4.2. Remedies. If any event of default occurs, Bank may
resort to any remedy existing at law or in equity for the
collection of the Line of Credit Note and enforcement of the
covenants and provisions of this Agreement. Bank's resort to any
remedy shall not prevent the concurrent or subsequent employment
of any other remedy.
Section 4.3. Waiver. Any waiver of an event of default by Bank
shall not extend to or affect any subsequent default. No failure
or delay by Bank in exercising any right hereunder shall operate
as a waiver nor shall any single or partial exercise of any right
preclude any other right hereunder.
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ARTICLE V
Miscellaneous
Section 5.1. Amendments. This Agreement may be amended or
modified in whole or in part at anytime, if in writing and signed
by the parties. Bank may further consent in writing, or give
written waiver to any covenant or event which might otherwise
create a default.
Section 5.2. Delay, Waiver. No omission or delay on the part of
Bank in exercising any right, power, or privilege hereunder shall
impair or operate as a waiver thereof; nor shall any single or
partial exercise or any right, power, or privilege hereunder
preclude any other or further exercise thereof or the exercise of
any other right, power, or privilege. No waiver by Bank will be
valid unless in writing and signed by Bank and then only to the
extent specified therein. The rights and remedies herein
expressly specified are cumulative and not exclusive of any
rights or remedies which Bank would otherwise have.
Section 5.3. Bank. Whenever in this Agreement reference is made
to the Bank, such term shall be deemed for the purpose of
benefits, powers, and privileges hereunder to include any firm,
person, or corporation who may be the holder from time to time of
the Note issued hereunder or a participation therein.
Section 5.4. Governing Law. This Agreement and the Line of
Credit Note shall be construed and interpreted in accordance with
the laws of the State of Missouri.
IN WITNESS WHEREOF, the parties have caused this Agreement
to be duly executed as of the date first above written.
BORROWER:
MIDWEST GRAIN PRODUCTS, INC.
By: /s/ Ladd M. Seaberg
Title: President - CEO
By: /s/ Robert G. Booe
Title: VP - CFO
BANK:
COMMERCE BANK OF KANSAS CITY, N.A.
By: /s/ Fredrick J. Marston
Title: Vice-President
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