THIRD
AMENDMENT TO CREDIT AGREEMENT
This Third Amendment to Credit
Agreement (the "Amendment") is made
as of December 19, 2008, by and among MGP Ingredients, Inc., a Kansas
corporation ("MGP"), Midwest Grain
Pipeline, Inc., a Kansas corporation ("Midwest Grain"),
Commerce Bank, N.A., as Agent, Issuing Bank and Swingline Lender under the
Credit Agreement referred to below, and the Banks party to the Credit Agreement
referred to below. MGP and Midwest Grain are each referred to herein
as a "Borrower"
and are collectively referred to herein as the "Borrowers." The
Banks, the Agent, the Issuing Bank and the Swingline Lender are each referred to
herein as a "Bank
Party" and are collectively referred to herein as the "Bank
Parties."
Preliminary
Statements
(a) The
Borrowers and the Bank Parties are parties to a Credit Agreement dated as of May
5, 2008, as amended by a First Amendment to Credit Agreement dated as of
September 3, 2008, a letter agreement dated October 31, 2008, and a Second
Amendment to Credit Agreement dated as of November 7, 2008 (as so amended, the
"Credit
Agreement"). Capitalized terms used and not defined in this
Amendment have the meanings given to them in the Credit Agreement.
(b) The
Borrowers have requested the Borrowers be permitted on a temporary basis to
obtain Loans under the Credit Agreement in amounts in excess of the Borrowing
Base.
(c) The
Bank Parties are willing to agree to the foregoing requests by the Borrowers,
subject, however, to the terms, conditions and agreements set forth in this
Amendment.
NOW, THEREFORE, for good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties agree as follows:
1. Overadvances. In
order that the Borrowers be permitted on a temporary basis to obtain Loans and
other credit extensions under the Credit Agreement in amounts in excess of the
Borrowing Base at such times, the Credit Agreement is amended as
follows:
(a) Existing Borrowing Base Increased by
Overadvance Amount; New Subpart (10). The definition of
"Borrowing Base" in Section 1.1 of the Credit Agreement is amended to read as
follows:
"Borrowing Base"
means, at any time, an amount equal to the sum of:
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(1)
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85%
of the face amount of Eligible Accounts outstanding at such
time;
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(2) 65%
of the Value of Eligible Inventory consisting of flour;
(3) 75%
of the Value of Eligible Inventory consisting of corn;
(4) 75%
of the Value of Eligible Inventory consisting of wheat;
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(5)
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80%
of the Value of Eligible Inventory consisting of alcohol (food grade or
ethanol);
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(6) 75%
of the Value of Eligible Inventory consisting of feed;
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(7)
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65%
of the Value of Eligible Inventory consisting of protein (wheat
gluten);
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(8) 60%
of the Value of Eligible Inventory consisting of starch;
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(9)
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60%
of the Value of Eligible Inventory consisting of other finished goods;
and
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(10)
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the
Overadvance Amount;
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less the amount of taxes
arising under 26 USC 5001 at such time which the Borrowers and any Guarantor
Subsidiaries reasonably anticipate being payable by a Borrower or a Guarantor
Subsidiary to a taxing authority in connection with planned sales of taxable
alcohol Inventory to non-bonded warehouses.
(b) Definition of Overadvance
Amount. Section 1.1 of the Credit Agreement is amended to add
the following definition in the appropriate alphabetical order:
"Overadvance Amount"
means: (1) from the Third Amendment Closing Date through January 30, 2009,
$3,000,000; (2) from January 31, 2009 through February 26, 2009, $1,500,000; and
(3) at any time after February 26, 2009, $500,000.
(c) Related
Definitions. Section 1.1 of the Credit Agreement is amended to
add the following definitions in the appropriate alphabetical
order:
"Third Amendment"
means the Third Amendment to Credit Agreement, dated on or about the Third
Amendment Closing Date, among the Borrowers, the Agent, the Issuing Bank, the
Swingline Lender and the other Banks.
"Third Amendment Closing
Date" means December 19, 2008.
2. No Affect on Standstill
Period. Without limiting the provisions of Section 3 below,
nothing in Section 1 of this Amendment or otherwise shall modify the definition
of "Standstill Period" in the Credit Agreement or otherwise impose any duty on
any Bank to extend credit to or for the benefit of any Borrower beyond any date
after which such Bank is not obligated to extend credit pursuant to the terms of
the Credit Agreement as in effect immediately prior to this
Amendment.
3. No Other Amendments; No
Waiver. Except as amended hereby, the Credit Agreement and the
other Credit Documents shall remain in full force and effect and be binding on
the parties in accordance with their respective terms. Nothing in
this Amendment shall constitute a waiver by any of the Bank Parties of any
Default or Event of Default which may exist on the date hereof, and nothing
herein shall require any Bank Party to waive any Default or Event of Default
which may arise hereafter. Nothing herein shall act to release any
Lien on any Collateral or limit the scope or amount of the obligations secured
thereby.
Third
Amendment to Credit Agreement – Page 2
4. Reaffirmation of Credit
Documents. Each Borrower reaffirms its obligations under the
Credit Agreement, as amended hereby, and the other Credit Documents to which it
is a party or by which it is bound, and represents, warrants and covenants to
the Bank Parties, as a material inducement to the Bank Parties to enter into
this Amendment, that: (a) such Borrower has no and in any event waives any
defense, claim or right of setoff with respect to its obligations under, or in
any other way relating to, the Credit Agreement, as amended hereby, or any of
the other Credit Documents to which it is a party, or any Bank Party's actions
or inactions in respect of any of the foregoing, and (b) except as otherwise
expressly provided in this Amendment, all representations and warranties made by
such Borrower in the Credit Agreement or the other Credit Documents to which it
is a party are true and complete on the date hereof as if made on the date
hereof.
5. Representations and
Warranties. Each Borrower represents and warrants to the Bank
Parties as follows: (a) it is a validly existing corporation and has
full corporate power and authority to enter into this Amendment and any
documents or transactions contemplated hereby and to pay and perform any
obligations it may have in respect of the foregoing; (b) its execution, delivery
and performance of this Amendment and any documents or transactions contemplated
hereby do not violate or conflict with, or require any consent under, (1) its
organizational documents or any other agreement or document relating to its
formation, existence or authority to act, (2) any agreement or instrument by
which it or any its properties is bound, (3) any court order, judicial
proceeding or any administrative or arbitral order or decree, or (4) any
applicable law, rule or regulation; and (c) no authorization, approval or
consent of or by, and no notice to or filing or registration with, any
governmental authority or other Person is necessary for it to enter into this
Amendment or any document or transaction contemplated hereby or to perform any
of its obligations with respect to any of the foregoing.
6. Release of Bank
Parties. Without limiting any other provision of this
Amendment, each Borrower, on behalf of itself and any officers, directors,
agents, attorneys, employees, representatives, affiliates, successors and
assigns it may have and anyone claiming through or under it (collectively, with
respect to all Borrowers, the "Releasing Parties"),
hereby releases, remises and acquits each Bank Party, and its officers,
directors, agents, attorneys, employees, representatives, affiliates, successors
and assigns and anyone claiming through or under it (collectively, with respect
to all Bank Parties, the "Released Parties"),
from all manners of action, causes of action, claims and demands of every kind
and nature whatsoever, whether known or unknown, fixed or contingent, liquidated
or unliquidated, as of the date of this Amendment, that any of the Releasing
Parties had or may have against any of the Released Parties.
7. Conditions Precedent to
Amendment. Unless and to the extent the Agent waives the
benefits of this sentence by giving written notice thereof to the Borrowers, the
Bank Parties shall have no duties under this Amendment, nor shall any
extensions, waivers or other concessions by the Bank Parties under this
Amendment be effective, in each case until the Agent has received fully executed
originals of each of the following, each in form and substance satisfactory to
the Agent:
(a) Amendment. This
Amendment; and
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(b)
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Other. Such
other documents, consents, agreements or other items as the Agent may
reasonably request.
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8. Joint and Several
Liability. Notwithstanding anything in this Amendment to the
contrary, each Borrower's representations, warranties and covenants under this
Amendment (and under the other Credit Documents as amended hereby) shall be the
joint and several representations, warranties and covenants of all
Borrowers.
9. Expenses. The
Borrowers shall pay the reasonable out-of-pocket legal fees and expenses
incurred by the Agent in connection with the preparation and closing of this
Amendment and any other documents referred to herein and the consummation of any
transactions referred to herein or therein.
Third
Amendment to Credit Agreement – Page 3
10. Governing Law. This
Amendment shall be governed by the same law that governs the Credit
Agreement.
11. Counterparts; Fax
Signatures. This Amendment may be executed in one or more
counterparts and by different parties thereto, all of which counterparts, when
taken together, shall constitute but one agreement. This Amendment
may be validly executed and delivered by fax, e-mail or other electronic means
and any such execution or delivery shall be fully effective as if executed and
delivered in person.
[signature
page(s) to follow]
Third
Amendment to Credit Agreement – Page 4
IN WITNESS WHEREOF, the parties have
entered into this Amendment as of the date first above written.
By:/s/ Robert Zonneveld
Name:
Robert Zonneveld Title: Vice
President
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MIDWEST
GRAIN PIPELINE, INC.
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By:/s/ Robert Zonneveld
Name:
Robert Zonneveld Title: Vice President
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as
Agent, Issuing Bank, Swingline Lender and a
Bank
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By: /s/ Wayne C. Lewis
Name:
Wayne C. Lewis
Title:
Vice President
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BMO
CAPITAL MARKETS FINANCING, INC.,
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as a Bank
By: /s/ Barry W. Stratton
Name:
Barry W. Stratton
Title:
Managing Director
as a Bank
By: /s/ Jon R. Hinard
Name:
Jon R. Hinard
Title:
Senior Vice President
Third
Amendment to Credit Agreement – Signature Page