Exhibit 4(c)
THIRD AMENDED LINE OF CREDIT LOAN AGREEMENT
THIS THIRD AMENDED LINE OF CREDIT LOAN AGREEMENT (the "Agreement"),
executed as of this 16th day of July, 1996, 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, 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 Seven Million and no/100 Dollars ($27,000,000.00) (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, 1998. 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, 1998, 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 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.
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.
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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, 1996.
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 (1) $70,000,000 and (ii) the sum
of $70,000,000 plus 50% of 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 to Fixed
Charges of not less than 1.50 to 1.00.
The Company Covenants shall survive any amendment, modification or termination
of the Principal Agreement.
Section 3.2 Taxes, etc. Promptly pay all taxes, assessments and other
government charges (unless such payments are being contested in good faith).
Section 3.3 Insurance. Maintain insurance on all its properties
in such amounts and against such hazards as is customary in Borrower's industry.
Section 3.4 Books and Records. Maintain its books and records
and account for financial transactions in accordance with generally accepted
accounting principals.
Section 3.5 Financial Reporting. Borrower shall furnish 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
Bank;
(b) Its quarterly financial statements within 45 days
after the end of each quarter; and
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(c) Such other information as Bank may reasonably request
from time to time.
Section 3.6 Notification. Notify Bank immediately if it becomes aware
of the occurrence of any Event of Default (as defined under Section 4.1 hereof)
or of any fact, condition, or event that, only with the giving of notice or
passage of time or both, would become an Event of Default, or if it becomes
aware of a material adverse change in the business prospects, financial
condition (including, without limitation, proceedings in bankruptcy, insolvency,
reorganization, or the appointment of a receiver or trustee), or results of
operations of Company, or the failure of Company to observe any of its
undertakings under this Agreement of any other note or agreement binding on
Borrower including, but not limited to, the Principal Agreement.
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
(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.
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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.
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.
MIDWEST GRAIN PRODUCTS INC. COMMERCE BANK, N.A.
By: /s/Ladd M. Seaberg By: /s/Frederick J. Marston
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Title: President and CEO Title: Vice President
By: /s/Robert G. Booe
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Title: Vice President and Chief
Financial Officer
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