Document:

Exhibit 4.2.5

 

This Mortgage was
prepared by and when recorded should be mailed to:

 

Armstrong Teasdale LLP

Attn:  Timothy J. Tryniecki

One Metropolitan Square

St. Louis, Missouri  63102

 

Permanent Tax
Identification Numbers described herein: 

10-10-09-200-001

10-10-09-200-010

04-10-04-400-002

 

Street Address of
Property described herein:

1301 South Front Street

Pekin, Illinois

 

Space
above reserved for Recorder’s Use Only

 

THIS INSTRUMENT SHOULD BE FILED AS A MORTGAGE

AND AS A FIXTURE FILING

 

THE NAME OF THE RECORD FEE SIMPLE OWNER OF THE
PROPERTY IS:

 

MGP INGREDIENTS,INC., a Kansas corporation, 

formerly known as Midwest Grain Products, Inc., a
Kansas corporation

 

THE FEIN# OF THE DEBTOR
IS:  48-0531-200

 

THIS LIMITATION DOES NOT INCLUDE INTEREST, ATTORNEYS’
FEES, DISBURSEMENTS OR OTHER COSTS AND EXPENSES WHICH MORTGAGEE MAY COLLECT
PURSUANT TO THIS MORTGAGE (AS DEFINED HEREIN), THE LOAN INSTRUMENTS (AS DEFINED
HEREIN) OR UNDER APPLICABLE LAW.

 

 

THIS MORTGAGE, ASSIGNMENT OF RENTS, SECURITY AGREEMENT
AND FIXTURE FILING (this “Mortgage”) is made as of  August 14, 2009, by MGP Ingredients, Inc., a corporation duly organized and
validly existing under the laws of the State of Kansas, authorized to do and
conduct business in the State of Illinois and having an office at 100
Commercial Plaza, Atchison, Kansas 66002 Attn: 
Timothy W. Newkirk, President, formerly known as Midwest Grain Products,
Inc., a Kansas corporation (the “Mortgagor”), in favor of Central
Illinois Light Company, and having an office
at 300 Liberty Street, Peoria, Illinois 61602, Attention:  Stan E. Ogden, Vice
President (the “Mortgagee”).

 

W I T N E S S
E T H:

 

WHEREAS, Mortgagor and Mortgagee are parties to that
certain Restructuring Agreement dated July 20, 2009 (the “Restructuring
Agreement”), pursuant to which Mortgagor has executed and delivered to
Mortgagee the Note, as defined therein, dated July 20, 2009 and in the
principal amount of $11,614,197.19 (the “Note”); except as otherwise herein
expressly provided, all capitalized terms not otherwise defined herein shall
have the meaning provided in the Restructuring Agreement;

 

WHEREAS, as a condition to Mortgagee’s extension of
credit to the Mortgagor  pursuant to
the Restructuring Agreement, Mortgagee has required that Mortgagor execute and
deliver this Mortgage;

 

WHEREAS, all advances, indebtedness and obligations of
Mortgagor arising and accruing under the Restructuring Agreement from time to
time shall be secured by this Mortgage to the same extent as though advanced on
the date hereof; and

 

NOW, THEREFORE, for good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, and FOR THE
PURPOSE OF SECURING the following items (a) through (e) (collectively, the “Obligations”):

 

(a)           all payment and other obligations of
Mortgagor arising under the Note, as the same may hereafter be amended;

 

(b)           the performance and payment of all
covenants, agreements and obligations contained herein and in the Restructuring
Agreement and all other monies secured hereby, including, without limitation,
any and all sums expended by the Mortgagee pursuant to Section 1.06, together
with interest thereon;

 

(c)           the performance and payment of all
covenants, agreements and obligations arising under that certain Assignment of
Income Tax Refunds and Proceeds dated July 20, 2009 from Mortgagor to Mortgagee
(the “Assignment of Income Tax Refunds”);

 

(d)           all indebtedness and obligations
arising pursuant this Mortgage and to any and all other agreements or
assignments securing the Note; and

 

(e)           the payment of any sum or sums of
money which may hereafter be payable by Mortgagor and the observance of all
other obligations of Mortgagor to Mortgagee under the Restructuring Agreement,
as the same may be amended or modified.

 

2

 

Mortgagor, for and in consideration of the debt
hereinafter described and created, and of Ten Dollars and No Cents ($10.00)
paid to Mortgagor by Mortgagee, the receipt of which is hereby acknowledged,
hereby GRANTS, BARGAINS, REMISES, RELEASES, SELLS, CONVEYS and CONFIRMS to
Mortgagee, its successors and assigns forever, all of Mortgagor’s estate,
right, title and interest in, to and under, and grants to Mortgagee a security
interest in, any and all of the following described property which is (except
where the context otherwise requires) herein collectively called the “Property”,
whether now owned or held or hereafter acquired, such term also referring to
any part or parcel hereof:

 

(a)           all of the real estate and property
legally described in Exhibit A
attached hereto and by this reference made a part hereof, including any
buildings or other improvements thereon (hereinafter called the “Real Estate”);
and

 

(b)           all right, title and interest of
Mortgagor, including any after-acquired title or reversion, in and to the beds
of the ways, streets, avenues and alleys adjoining the Real Estate and in and
to any strips, gaps or gores adjoining the Real Estate on all sides thereof;
and

 

(c)           all of the tenements, hereditaments,
easements, appurtenances, passages, waters, water rights, water courses,
riparian rights and other rights, liberties and privileges thereof now or
hereafter appertaining to the Real Estate, including any homestead or other
claim at law or in equity, any after-acquired title, franchises, licenses, and
any reversions and remainders thereof; and

 

(d)           Mortgagor’s interest in all buildings
and improvements of every kind and description now or hereafter erected or
placed on the Real Estate (the “Improvements”); all materials intended for
construction, reconstruction, alterations and repairs of the Improvements
(whether stored or located on site or stored off site), all of which materials
shall be deemed to be included within the Property hereby conveyed immediately
upon the delivery thereof to the Real Estate; all fixtures now or hereafter
owned by Mortgagor and attached to or used in connection with Real Estate and
Improvements (“Fixtures”), including but not limited to all furniture and
furnishings, apparatus, machinery, motors, elevators, fittings, radiators, gas
ranges, mechanical refrigerators, awnings, shades, screens, office equipment,
blinds, carpeting and other furnishings, and all plumbing, beating, lighting,
cooking, laundry, ventilating, refrigerating, incinerating, air conditioning,
central energy and sprinkler equipment and fixtures and appurtenances thereto;
and all renewals or replacements of any of the foregoing, whether or not the
same are or shall be attached to the Improvements.  Notwithstanding anything herein to the
contrary, Mortgagee shall not have a security interest in and to Mortgagor’s “equipment”
as such term is defined in the Uniform Commercial Code for Illinois (the “Code”);
and

 

(e)           all of the rents, issues, proceeds
and profits accruing or to accrue from the Real Estate or arising from the use
or enjoyment of all or any portion thereof or from any lease or agreement
pertaining thereto; and all right, title and interest of Mortgagor in and to
all leases of the Real Estate now or hereafter existing; including without
limitation all deposits made thereunder to secure performance by the tenants of
their obligations thereunder; and

 

(f)            all goodwill, trademarks, trade
names, option rights, purchase contracts, books and records and general
intangibles of Mortgagor relating to the Real Estate or the Improvements 

 

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including, without
limitation, all rights of Mortgagor under or with respect to all accounts,
contract rights, instruments, chattel paper and other rights of Mortgagor for
payment of money for property sold, rented or lent, for services rendered, for
money lent, or advances or deposits made, and any other intangible property of
Mortgagor related to the Real Estate or the Improvements; and

 

(g)           all rights, including all copyrights,
of Mortgagor to plans and specifications, designs, drawings and other matters
prepared for any construction on or renovation or alteration of the Real Estate
and Improvements; and

 

(h)           all licenses, permits, authorizations
or approvals of any type or nature whatsoever, now owned or held or hereafter
acquired which relate to the use, development or occupancy of the Real Estate;
and

 

(i)            all proceeds (including claims or
demands thereto) of the conversion, voluntary or involuntary, of any of the
foregoing into cash or liquidated claims, including without limitation all
proceeds of insurance (including unearned premiums) and condemnation awards
including interest thereon.

 

TO HAVE AND TO HOLD the Property with all privileges
and appurtenances thereunto belonging, to the Mortgagee and its successors and
assigns, forever, upon the terms and conditions and for the uses hereinafter
set forth;

 

PROVIDED ALWAYS, that if the principal of and interest
on the Loans under the Restructuring Agreement and all of the other Obligations
shall be paid in full, and the Mortgagor shall abide by and comply with each
and every covenant contained herein and in the Restructuring Agreement, then
this Mortgage and the lien and estate hereby granted shall cease, terminate and
become void.

 

This Mortgage, the Note, the Restructuring Agreement,
Assignment of Income Tax Refunds and any other instrument given to evidence or
further secure the payment and performance of any Obligations are sometimes
hereinafter collectively referred to as the “Loan Instruments”.

 

TO PROTECT THE SECURITY OF THIS MORTGAGE, THE
MORTGAGOR HEREBY COVENANTS AND AGREES AS FOLLOWS:

 

ARTICLE 1

Particular Covenants and Agreements of the Mortgagor

 

Section 1.01           Title, Etc.

 

(a)           Mortgagor has full power and
authority to execute this Mortgage and is lawfully seized of the Property in
fee simple absolute and has good right and lawful authority to convey the same
free and clear of all restrictions, encumbrances, and liens except those
encumbrances, easements, reservations, and restrictions now of record and
listed on Exhibit B attached hereto (the
“Permitted Exceptions”).  Mortgagor shall
keep the Property free from all liens and claims of every kind, whether
statutory or otherwise, except for Permitted Exceptions.  Mortgagor will, 

 

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at its expense, warrant and defend all such title and
the lien and security interest of this Mortgage against all claims and demands
and will maintain and preserve such lien and security interest so long as all
or any portion of the Obligations are outstanding.  Mortgagor agrees, at the request of
Mortgagee, from time to time, to execute any further assurances of title and to
provide Mortgagee with such evidence thereof as Mortgagee shall request.

 

Section 1.02           Further Assurances; Filing;
Re-Filing; Etc.

 

(a)           Further Instruments.  To the extent permitted by and subject to
applicable law, the Mortgagor shall execute, acknowledge and deliver, from time
to time, such further instruments as the Mortgagee may reasonably require to
accomplish the purposes of this Mortgage.

 

(b)           Filing and Re-Filing.  Subject to applicable law, the Mortgagor,
immediately upon the execution and delivery of this Mortgage, and thereafter
from time to time upon reasonable advance notice from Mortgagee, shall cause
this Mortgage, any security agreement or mortgage supplemental hereto and each
instrument of further assurance to be filed, registered or recorded and
re-filed, re-registered or re-recorded in such manner and in such places as may
be required by any present or future law in order to publish notice of and
perfect the lien or estate of this Mortgage upon the Property.

 

(c)           Fees and Expenses.  The Mortgagor shall pay all filing,
registration and recording fees, all re-filing, re-registration and
re-recording fees, and all expenses incident to the execution, filing,
recording and acknowledgment of this Mortgage, any security agreement or
mortgage supplemental hereto and any instrument of further assurance, and all
Federal, state, county and municipal stamp taxes and other taxes, duties,
imposts, assessments and charges arising out of or in connection with the
execution, delivery, filing and recording of this Mortgage or any of the other
Loan Instruments, any security agreement or mortgage supplemental hereto or any
instruments of further assurance.

 

Section 1.03           Insurance; Foreclosure.  In the event of foreclosure of the lien of
this Mortgage or other transfer of title or assignment of the Property in
extinguishment, in whole or in part, of the Obligations, all right, title and
interest of the Mortgagor in and to all policies of casualty insurance covering
all or any part of the Property shall inure to the benefit of and pass to the
successors in interest to the Mortgagor or the purchaser or grantee of the
Property or any part thereof.

 

Section 1.04           Impositions.

 

(a)           Payment of Impositions.  The Mortgagor shall pay or cause to be paid,
before any fine, penalty, interest or cost attaches thereto, all taxes,
assessments, water and sewer rates, utility charges and all other governmental
or non-governmental charges or levies now or hereafter assessed or levied
against any part of the Property (including, without limitation,
non-governmental levies or assessments such as maintenance charges, owner
association dues or charges or fees, levies or charges resulting from
covenants, conditions and restrictions affecting the Property) or upon the lien
or estate of the Mortgagee therein (collectively, “Impositions”), as
well as all claims for labor, materials or supplies that, if unpaid, will by
law become a prior lien thereon, and within ten (10) days after request by the
Mortgagee will exhibit receipts showing 

 

5

 

payment of any of the foregoing; provided,
however, that if by law any such Imposition may be paid in installments
(whether or not interest shall accrue on the unpaid balance thereof), the
Mortgagor may pay the same in installments (together with accrued interest on
the unpaid balance thereof) as the same respectively become due, before any
fine, penalty or cost attaches thereto.

 

(b)           Right to Contest Impositions.  Notwithstanding anything contained in Section
1.04(a) to the contrary, the Mortgagor at its expense may, after prior notice
to the Mortgagee, contest the amount or validity or application, in whole or in
part, of any Imposition or lien therefor or any claims of mechanics,
materialmen, suppliers or vendors or lien thereof, and may withhold payment of
the same pending such proceedings if permitted by law.

 

Section 1.05           Limitations of Use.  Subject to applicable law, the Mortgagor
shall not initiate, join in or consent to any change in any private restrictive
covenant, zoning ordinance or other public or private restrictions limiting or
defining the uses that may be made of the Property and the Improvements or any
part thereof that would have a material adverse effect on the value of the
Property or the Improvements.  Except as
otherwise permitted under the Loan Instruments, the Mortgagor shall comply in
all material respects with the provisions of all leases, licenses, agreements
and private covenants, conditions and restrictions that at any time are
applicable to the Property.

 

Section 1.06           Actions to Protect Property.

 

(a)           If the Mortgagor shall fail to (a) effect
the insurance required hereby, (b) make the payments required by Section 1.04
hereof, or (c) perform or observe any of its other covenants or agreements
hereunder, the Mortgagee may, without obligation to do so, and upon notice to
the Mortgagor (except in an emergency) effect or pay the same.  To the maximum extent permitted by law, all
sums, including reasonable attorneys’ fees and disbursements, so expended or
expended to sustain the lien or estate of this Mortgage or its priority, or to
protect or enforce any of the rights hereunder, or to recover any of the
Obligations, shall be a lien on the Property, shall be deemed to be added to
the Obligations secured hereby, and shall be paid by the Mortgagor within ten (10)
days after demand therefor, together with interest thereon at the Default Rate,
as such term is defined in the Note.

 

(b)           Insurance.

 

(i)            Mortgagor,
at Mortgagor’s sole expense, shall insure the Property for the benefit of
Mortgagee against loss or damage thereto and shall keep in effect, for
Mortgagee’s benefit, comprehensive general public liability insurance against
claims for bodily injury, death or property damage,  The policies of insurance required by this Section
shall be in companies, forms and amounts, and for such periods and with such
deductibles, as shall be customary for property similar in use, location and
condition to the Property, and shall insure the respective interest of
Mortgagor and Mortgagee.  The insurance
proceeds from all such policies of insurance (other than the proceeds in
respect of any liability insurance policy) shall be payable to Mortgagee
pursuant to a noncontributing mortgagee endorsement satisfactory in form and
substance to Mortgagee; except Mortgagee agrees that if such proceeds become
payable, and so long 

 

6

 

as there is no uncured Default that has taken place hereunder,
Mortgagor shall have the right to apply for and receive such proceeds for the sole
purpose of repairing, restoring or rebuilding the Property, so damaged or
destroyed, and Mortgagor shall give to Mortgagee a complete report of all
insurance proceeds expended, together with copies of invoices and other
supporting information.  Upon execution
of this Mortgage, Mortgagor shall promptly furnish evidence of satisfactory
insurance on the Property and that Mortgagor has complied with the other
provisions of this Section.  At least
fifteen (15) days prior to the expiration of each such policy,  Mortgagor shall furnish Mortgagee with
evidence satisfactory to Mortgagee of the payment of premium and the reissuance
of a policy continuing insurance in force as required by this Mortgage.  In addition to the other policies of
insurance required hereunder, Mortgagor shall cause a title insurer reasonably
acceptable to Mortgagee to insure, in favor of Mortgagee, Mortgagor’s ownership
of, and Mortgagee’s lien on, the Property, subject only to Permitted
Exceptions, in an amount equal to not less than $11,614,197.19 in such form,
and with such affirmative coverage and endorsements as Mortgagee may reasonably
request.

 

(ii)           Mortgagor
shall obtain flood insurance, in such total amount as Mortgagee may from time
to time require, and Mortgagor shall otherwise comply with the National Flood
Insurance Program as set forth in the said Flood Disaster Protection Act of
1973 or evidence satisfactory to Mortgagee that the Property is not in a
federally designated flood plain zone or a “flood prone” area pursuant to the
Flood Disaster Protection Act of 1973 (U.S.C.) or any amendments or supplements
thereto.

 

(c)           The following is added pursuant to
815 ILCS 180/10:

 

UNLESS YOU PROVIDE US
WITH EVIDENCE OF THE INSURANCE COVERAGE REQUIRED BY YOUR AGREEMENTS WITH US,
PURSUANT TO THE LOAN INSTRUMENTS, WE MAY PURCHASE INSURANCE AT YOUR EXPENSE TO
PROTECT OUR INTERESTS IN THE PROPERTY. 
THIS INSURANCE MAY, BUT NEED NOT, PROTECT YOUR INTERESTS.  THE COVERAGE THAT WE PURCHASE MAY NOT PAY ANY
CLAIM THAT YOU MAKE OR ANY CLAIM THAT IS MADE AGAINST YOU IN CONNECTION WITH
THE PROPERTY.  YOU MAY LATER CANCEL ANY
INSURANCE PURCHASED BY US, BUT ONLY AFTER PROVIDING US WITH EVIDENCE THAT YOU
HAVE OBTAINED INSURANCE AS REQUIRED BY THE LOAN INSTRUMENTS.  IF WE PURCHASE INSURANCE FOR THE PROPERTY,
YOU WILL BE RESPONSIBLE FOR THE COSTS OF THAT INSURANCE, INCLUDING INTEREST AND
ANY OTHER CHARGES WE MAY IMPOSE IN CONNECTION WITH THE PLACEMENT OF THE
INSURANCE, UNTIL THE EFFECTIVE DATE OF THE CANCELLATION OR EXPIRATION OF THE
INSURANCE.  THE COSTS OF THE INSURANCE MAY
BE ADDED TO YOUR TOTAL 

 

7

 

OUTSTANDING BALANCE OR
OBLIGATION.  THE COSTS OF THE INSURANCE MAY
BE MORE THAN THE COST OF INSURANCE YOU MAY BE ABLE TO OBTAIN ON YOUR OWN.

 

Section 1.07           Condemnation

 

(a)           All compensation, proceeds and awards
paid to or received by Mortgagor in any taking by eminent domain or conveyance
in lieu thereof that may affect all or any part of or interest in the Property
(whether permanently or temporarily), including severance and consequential
damages and damages from a change in the grade of any street, are hereby
assigned to Mortgagee subject to the terms hereof.  Mortgagor hereby appoints Mortgagee as its
attorney-in-fact, coupled with an interest, to collect and receive the proceeds
thereof and to give proper receipts therefor. 
Mortgagor authorizes and empowers Mortgagee, as such attorney-in-fact,
at Mortgagee’s option, on behalf of Mortgagor (notwithstanding the fact that
the Obligations may not then be due and payable or that the Obligations are
otherwise adequately secured), to adjust or join with Mortgagor in adjusting or
compromising the claim for any such compensation, proceeds or awards.  After deducting all costs of collection, such
compensation, proceeds and awards shall be applied, at the option of Mortgagee,
as follows:  (i) as a credit upon any
portion of the Obligations, as selected by Mortgagee; or (ii) to restoring the
Improvements.  If Mortgagor is not then
in default under any of the Loan Instruments, Mortgagee shall allow the
proceeds to be applied as specified in alternative (ii) of the above sentence,
with any excess proceeds remaining after restoration of the Improvements to be
applied as specified in alternative (i).

 

(b)           In the event Mortgagee elects not to
apply such compensation, proceeds or awards to the Obligations (or such
application is not permitted above), Mortgagee shall release any such amounts
in the same manner and under the same conditions as are specified above for the
disbursement of insurance proceeds received in the event of casualty loss to
the Property.

 

(c)           Mortgagor agrees to give Mortgagee
immediate notice of the actual or threatened commencement of any such eminent
domain proceeding, and agrees to promptly send to Mortgagee copies of any and
all papers served or received by Mortgagor in connection with any such
proceedings.  Mortgagor also agrees to
make, execute and deliver to Mortgagee at any time or times, upon request,
free, clear and discharged of any encumbrance of any kind whatsoever, any and
all further assignments and/or other instruments which are deemed necessary by
Mortgagee for the purpose of validly and sufficiently assigning to Mortgagee
all such compensation, proceeds and awards to Mortgagee.

 

Section 1.08           Estoppel Certificates.  The Mortgagor, within five (5) days upon
request in person or within ten (10) days upon request by mail, shall furnish
the Mortgagee a written statement, duly acknowledged, of the amount of the
Obligations then secured by this Mortgage and whether to their knowledge any
offsets or defenses exist against any such Obligations.

 

8

 

Section 1.09           Indemnification;
Subrogation; Waiver of Offset.

 

(a)           If Mortgagee is made a party
defendant to any litigation concerning this Mortgage or the Property or any
part thereof or interest therein, or the occupancy thereof by Mortgagor, then
Mortgagor shall indemnify, defend and hold Mortgagee harmless from all
liability by reason of said litigation, including reasonable attorneys’ fees
and expenses incurred by Mortgagee in any such litigation, whether or not any
such litigation is prosecuted to judgment. 
If Mortgagee commences an action against Mortgagor to enforce any of the
terms hereof or because of the breach by Mortgagor of any of the terms hereof,
or for the recovery of any sum secured hereby, Mortgagor shall pay to
Mortgagee, Mortgagee’s reasonable attorneys’ fees and expenses, and the right
to such attorneys’ fees and expenses shall be deemed to have accrued on the
commencement of such action, and shall be enforceable whether or not such
action is prosecuted to judgment.  If
Mortgagor breaches any term of this Mortgage, Mortgagee may employ an attorney
or attorneys to protect its rights hereunder, and in the event of such
employment following any breach by Mortgagor, Mortgagor shall pay Mortgagee
reasonable attorneys’ fees and expenses incurred by Mortgagee, whether or not
an action is actually commenced against Mortgagor by reason of breach;

 

(b)           Mortgagor waives any and all right to
claim or recover against Mortgagee, its officers, employees, agents and
representatives, for loss of or damage to Mortgagor, the Property, Mortgagor’s
property or the property of others under Mortgagor’s control from any cause
insured against or required to be insured against by the provisions of the
Mortgage and Mortgagee waives any and all right to claim or recover against
Mortgagor, its officers, employees, agents and representatives, for loss of or
damage to Mortgagee, or Mortgagee’s property from any cause insured against or
required to be insured against by the provisions of the Mortgage;

 

(c)           Except as otherwise provided herein
or in any Loan Instruments, all sums payable by Mortgagor hereunder shall be
paid without notice, demand, counterclaim, setoff, deduction or defense and
without abatement, suspension, deferment, diminution or reduction, and the
obligations and liabilities of Mortgagor hereunder shall in no way be released
discharged or otherwise affected (except as expressly provided herein) by
reason of:  (i) any damage to or
destruction of or any condemnation or similar taking of the Property or any
part thereof; (ii) any restriction or prevention of or interference with any
use of the Property or any part thereof; (iii) any title defect or encumbrance
or any eviction from the Property or the Improvements or any part thereof by
title paramount or otherwise; (iv) any bankruptcy, insolvency, reorganization,
composition, adjustment, dissolution, liquidation or other like proceeding
relating to Mortgagor, or any action taken with respect to this Mortgage by any
trustee or receiver of Mortgagor, or by any court, in any such proceeding; (v) any
claim which Mortgagor has or might have against Mortgagee; (vi) any default or
failure on the part of Mortgagee to perform or comply with any of the terms
hereof or of any other agreement with Mortgagor; or (vii) any other occurrence
whatsoever, whether similar or dissimilar to the foregoing.

 

Section 1.10           Usury.  Mortgagor represents and agrees that the
proceeds of the Loan Instruments will be used for the purposes specified in 815
ILCS 205/4 and that the Obligations constitute a business loan which comes
within the purview of said 815 ILCS 205/4.

 

9

 

ARTICLE 2

Assignment of Rents, Issues and Profits

 

Section 2.01           Assignment of Rents, Issues and
Profits.  The Mortgagor hereby
assigns and transfers to the Mortgagee, FOR THE PURPOSE OF SECURING the
Obligations, all rents, and hereby gives to and confers upon the Mortgagee the
right, power and authority to collect the same. 
The Mortgagor irrevocably appoints the Mortgagee its true and lawful
attorney-in-fact, at its option at any time and from time to time following the
occurrence and during the continuance of a Default, to demand, receive and
enforce payment, to give receipts, releases and satisfactions, and to sue, in
the name of the Mortgagor or otherwise, for rents and apply the same to the
Obligations as provided in paragraph (a) of Section 4.03; provided,
however, that the Mortgagor shall have the right to collect rents at any time
prior to the occurrence of a Default (but not more than one month in advance,
except in the case of security deposits).

 

Section 2.02           Collection Upon Default.  To the extent permitted by law, upon the
occurrence of any Default, the Mortgagee may, at any time without notice,
either in person, by agent or by a receiver appointed by a court, and without
regard to the adequacy of any security for the Obligations or the solvency of
the Mortgagor, enter upon and take possession of the Property, the Improvements
and the Fixtures or any part thereof, in its own name, sue for or otherwise
collect Rents including those past due and unpaid, and, apply the same, less costs
and expenses of operation and collection, including attorneys’ fees and
disbursements, to the payment of the Obligations as provided in paragraph (a) of
Section 4.03, and in such order as the Mortgagee may determine.  The collection of Rents or the entering upon
and taking possession of the Property, the Improvements or the Fixtures or any
part thereof, or the application thereof as aforesaid, shall not cure or waive
any Default or notice thereof or invalidate any act done in response to such
Default or pursuant to notice thereof.

 

ARTICLE 3

Security Agreement

 

Section 3.01           Creation of Security Interest.  The Mortgagor hereby grants to the Mortgagee
a security interest in the Fixtures for the purpose of securing the
Obligations.  The Mortgagee shall have,
in addition to all rights and remedies provided herein and in the other Loan
Instruments, all the rights and remedies of a secured party under the
Code.  A statement describing the portion
of the Property comprising the fixtures hereby secured is set forth in the
granting clauses of this Mortgage.  The
Mortgagor represents and warrants to the Mortgagee that the Mortgagor is the
owner of the Property, the employer identification number of the Mortgagor is
48-0531-200.

 

Section 3.02           Warranties, Representations and
Covenants.  The Mortgagor hereby
warrants, represents and covenants that: 
(a) the Fixtures will be kept on or at the Property and the Mortgagor
will not remove any Fixtures from the Property, except as permitted under the
Loan Instruments and except such portions or items of the Fixtures that are
consumed or worn out in ordinary usage, all of which shall be promptly replaced
by the Mortgagor, except as otherwise expressly provided in the Loan
Instruments, (b) all covenants and obligations of the Mortgagor contained
herein relating to the Property shall be deemed to apply to the Fixtures
whether or not expressly referred to herein and (c) this Mortgage constitutes a
security agreement and “fixture filing” as those terms are used in the
Code.  The Mortgagor is the “Debtor” and
its name and mailing address are set forth on Page 1 hereof.  The Mortgagee is the “Secured Party” and its
name and mailing address from which information relative to the security
interest created 

 

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hereby are also set forth on Page 1 hereof and is
authorized by Mortgagor, as the “Debtor” to file such financing statements in
such public offices as Mortgagee deems necessary to perfect the security
interests granted hereunder.  The
information provided in this Section 3.02 is provided so that this Mortgage
shall comply with the requirements of the Code for a mortgage instrument to be
filed as a financing statement.

 

ARTICLE 4

Defaults; Remedies

 

Section 4.01           Defaults.  To the extent permitted by law, if any of the
following events shall occur (a “Default”):  (i) a default or event of default under the
Restructuring Agreement, the Note or any of the Loan Instruments, (ii) the
failure of Mortgagor to pay the Obligations as said Obligations become due in
accordance with the terms of the Restructuring Agreement, the Note or the Loan
Instruments, (iii) failure by Mortgagor to punctually and fully perform and
observe each term, covenant, agreement or condition contained in the Loan
Instruments, including this Mortgage, (iv) a sale, transfer, conveyance, lease,
contract for deed, or other disposition of all or any part of the Property, (v)
title to the Property is or becomes unsatisfactory to the Mortgagee by reason
of any lien, charge, encumbrance, title condition or exception, then the
Obligations of the Mortgagor shall become due and payable, without presentment,
demand, protest or other formalities of any kind, all of which have been waived
pursuant to the Loan Instruments, (vi) Mortgagor files a petition in bankruptcy
or, for an arrangement, or for reorganization pursuant to the federal
Bankruptcy Code or any similar law, federal or state; files a petition or
answer consenting to, or acquiescing in, a reorganization, arrangement, adjustment,
composition, liquidation, dissolution or similar relief, under any present or
future statute, law or regulation; is adjudicated as a bankrupt; is determined
to be insolvent by a decree of a court of competent jurisdiction; makes an
assignment for the benefit of creditors; admits its inability to pay its debts
generally as they become due; or consents to the appointment of a receiver or
receivers of all or any part of its assets, (vii) the granting or entry of a
final judgment, order or decree for the payment of money against Mortgagor, and
Mortgagor’s failure to stay or discharge the same or cause it to be stayed or
discharged within thirty (30) days after the date of a written notice from
Mortgagee, if in the judgment of Mortgagee the granting or entry adversely
affects Mortgagee’s security interest in the Property or Mortgagor’s ability to
manage and operate the Property, or (viii) a default or event of default under
that certain Mortgage, dated April 15, 2009, from Mortgagor to Exchange
National Bank & Trust Co., (“Superior Lender”) recorded as Document number
200900008285 in the Records of the Tazewell County Recorder of Deeds records (“Superior
Mortgage”), which results in an acceleration of all or any part of the loan
extended by Superior Lender to Mortgagor.

 

Section 4.02           Default Remedies.

 

(a)           Remedies Generally.  If a Default shall have occurred and be
continuing, this Mortgage may, to the maximum extent permitted by law, be
enforced, and the Mortgagee may exercise any right, power or remedy permitted
to it hereunder, under the Restructuring Agreement or under any of the other
Loan Instruments or by law, and, without limiting the generality of the
foregoing, the Mortgagee may, personally or by its agents, to the maximum
extent permitted by law and upon application to a court of competent
jurisdiction:

 

11

 

(i)            enter
into and take possession of the Property or any part thereof, exclude the
Mortgagor and all persons claiming under the Mortgagor whose claims are junior
to this Mortgage, wholly or partly therefrom, and use, operate, manage and
control the same either in the name of the Mortgagor or otherwise as the
Mortgagee shall deem best, and upon such entry, from time to time at the
expense of the Mortgagor and the Property, make all such repairs, replacements,
alterations, additions or improvements to the Property or any part thereof as
the Mortgagee may deem proper and, whether or not the Mortgagee has so entered
and taken possession of the Property or any part thereof, collect and receive
all Rents and apply the same to the payment of all expenses that the Mortgagee
may be authorized to make under this Mortgage, the remainder to be applied to
the payment of the Obligations until the same shall have been repaid in full;
if the Mortgagee demands or attempts to take possession of the Property or any
portion thereof in the exercise of any rights hereunder, the Mortgagor shall
promptly turn over and deliver complete possession thereof to the Mortgagee;
and

 

(ii)           personally
or by agents, with or without entry, if the Mortgagee shall deem it advisable:

 

(A)                              proceed to protect and enforce its rights
under this Mortgage, by suit for specific performance of any covenant contained
herein or in the Loan Instruments or in aid of the execution of any power
granted herein or in the Loan Instruments, or for the judicial foreclosure of
this Mortgage (as a mortgage or otherwise) and the sale of the Property under
the judgment or decree of a court of competent jurisdiction, or for the
enforcement of any other right as the Mortgagee shall deem most effectual for
such purpose, provided, that in the event of a sale by foreclosure of
less than all of the Property, this Mortgage shall continue as a lien on, and
security interest in, the remaining portion of the Property; or

 

(B)                                exercise any or all of the remedies
available to a secured party under the Code, including, without limitation:

 

(i)            either
personally or by means of a court appointed receiver, take possession of all or
any of the Fixtures and exclude therefrom the Mortgagor and all persons
claiming under the Mortgagor, and thereafter hold, store, use, operate, manage,
maintain and control, make repairs, replacements, alterations, additions and
improvements to and exercise all rights and powers of the Mortgagor in respect
of the Fixtures or any part thereof; if the Mortgagee demands or attempts to
take possession of the Fixtures in the exercise of any rights hereunder, the
Mortgagor shall promptly turn over and deliver complete possession thereof to
the Mortgagee;

 

(ii)           without
notice to or demand upon the Mortgagor, make such payments and do such acts as
the Mortgagee may deem 

 

12

 

necessary to protect its security interest in the Fixtures, including,
without limitation, paying, purchasing, contesting or compromising any encumbrance
that is prior to or superior to the security interest granted hereunder, and in
exercising any such powers or authority paying all expenses incurred in
connection therewith; and

 

(iii)          require
the Mortgagor to assemble the Fixtures or any portion thereof, at a place
designated by the Mortgagee and reasonably convenient to both parties, and
promptly to deliver the Fixtures to the Mortgagee, or an agent or
representative designated by it; the Mortgagee, and its agents and
representatives, shall have the right to enter upon the premises and property
of the Mortgagor to exercise the Mortgagee’s rights hereunder.

 

(b)           Appointment of Receiver.  If a Default shall have occurred and be
continuing, the Mortgagee, to the maximum extent permitted by law and upon
application to a court of competent jurisdiction, shall be entitled, as a
matter of right, to the appointment of a receiver of the Property, without
notice or demand, and without regard to the adequacy of the security for the
Obligations or the solvency of the Mortgagor. 
The Mortgagor hereby irrevocably consents to such appointment and waives
notice of any application therefor.  Any
such receiver or receivers shall have all the usual powers and duties of
receivers in like or similar cases and all the powers and duties of the
Mortgagee in case of entry and shall continue as such and exercise all such
powers until the date of confirmation of sale of the Property, unless such
receivership is sooner terminated.

 

(c)           Sale.  In any sale pursuant to any judgment or
decree of court, the Property, to the maximum extent permitted by law, may be
sold in one or more parcels or as an entirety and in such order as the
Mortgagee may elect, without regard to the right of the Mortgagor or any person
claiming under the Mortgagor to the marshalling of assets.  The purchaser at any such sale shall take
title to the Property or the part thereof so sold free and discharged of the
estate of the Mortgagor therein, the purchaser being hereby discharged from all
liability to see to the application of the purchase money.  Any person, including Mortgagee or any
lender, may purchase at any such sale. 
Upon the completion of any such sale by virtue of this Section 4.02 or Section
6.05 the Mortgagee shall execute and deliver to the purchaser an appropriate
instrument that shall effectively transfer all of the Mortgagor’s estate,
right, title, interest, property, claim and demand in and to the Property or
portion thereof so sold, but without any covenant or warranty, express or
implied.  Any sale or sales made under or
by virtue of this Mortgage, to the extent not prohibited by law, shall operate
to divest all the estate, right, title, interest, property, claim and demand
whatsoever, whether at law or in equity, of the Mortgagor in, to and under the
Property, or any portions thereof so sold, and shall be a perpetual bar both at
law and in equity against the Mortgagor and against any and all persons
claiming or who may claim the same, or any part thereof, by, through or under
the Mortgagor.  The powers and agency
herein granted are coupled with an interest and are irrevocable.

 

(d)           Possession of Loan Instruments Not
Necessary.  All rights of action
under the Loan Instruments and this Mortgage may be enforced by the Mortgagee
without the possession 

 

13

 

of the Loan Instruments and without the production
thereof at any trial or other proceeding relative thereto.

 

Section 4.03           Application of Proceeds.

 

(a)           Application of Proceeds Generally.  The proceeds of any sale made under a
judgment, order or decree made in any action to foreclose or to enforce this
Mortgage, or of any monies held by the Mortgagee hereunder shall, to the
maximum extent permitted by law, be applied:

 

(i)            first
to the payment of all costs and expenses of such sale, including the Mortgagee’s
attorneys’ fees and disbursements;

 

(ii)           then
to the payment of all charges, expenses and advances incurred or made by the
Mortgagee in order to protect the lien and estate of this Mortgage or the
security afforded hereby;

 

(iii)          then
to the payment in full of the Obligations, ratably in accordance with the
respective amounts then due and owing or as the Mortgagee may otherwise agree;

 

and after payment in full of all Obligations any
surplus remaining shall be paid to the Mortgagor or to whomsoever may be
lawfully entitled to receive the same.

 

(b)           Liability for Deficiencies.  No sale or other disposition of all or any
part of the Property pursuant to Sections 4.02 and 6.05 shall be deemed to
relieve the Mortgagor of its obligations under the Restructuring Agreement or
any other Loan Instrument except to the extent the proceeds thereof are applied
to the payment of such obligations. 
Except as otherwise provided in the Loan Instruments, if the proceeds of
sale, collection or other realization of or upon the Property are insufficient
to cover the costs and expenses of such realization and the payment in full of
the Obligations, the Mortgagor shall remain liable for any deficiency.

 

Section 4.04           Right to Sue.  To the extent permitted by applicable law,
the Mortgagee shall have the right from time to time to sue for any sums
required to be paid by the Mortgagor under the terms of this Mortgage as the
same become due, without regard to whether or not the Obligations shall be, or
have become, due and without prejudice to the right of the Mortgagee thereafter
to bring any action or proceeding of foreclosure or any other action upon the
occurrence of any Default existing at the time such earlier action was commenced.

 

Section 4.05           Powers of the Mortgagee.  The Mortgagee may at any time or from time to
time renew or extend this Mortgage or (with the agreement of the Mortgagor)
alter or modify the same in any way, or waive any of the terms, covenants or
conditions hereof or thereof, in whole or in part, and may release any portion
of the Property or any other security, and grant such extensions and
indulgences in relation to the Obligations, or release any person liable
therefor as the Mortgagee may determine without the consent of any junior lien
or encumbrance, without any obligation to give notice of any kind thereto,
without in any manner affecting the priority of the lien and estate of this
Mortgage on or in any part of the Property, and without affecting the liability
of any other person liable for any of the Obligations.

 

14

 

Section 4.06           Remedies Cumulative.

 

(a)           Remedies Cumulative.  No right or remedy herein conferred upon or
reserved to the Mortgagee is intended to be exclusive of any other right or
remedy, and each and every right and remedy shall be cumulative and in addition
to any other right or remedy under this Mortgage, or under applicable law,
whether now or hereafter existing; the failure of the Mortgagee to insist at
any time upon the strict observance or performance of any of the provisions of
this Mortgage or to exercise any right or remedy provided for herein or under
applicable law, shall not impair any such right or remedy nor be construed as a
waiver or relinquishment thereof.

 

(b)           Other Security.  To the extent permitted by law, the Mortgagee
shall be entitled to enforce payment and performance of any of the Obligations
of the Mortgagor and to exercise all rights and powers under this Mortgage or
under any Loan Instrument or any laws now or hereafter in force,
notwithstanding that some or all of the Obligations may now or hereafter be
otherwise secured, whether by mortgage, deed of trust, pledge, lien, assignment
or otherwise; neither the acceptance of this Mortgage nor its enforcement,
whether by court action or other powers herein contained, shall prejudice or in
any manner affect the Mortgagee’s right to realize upon or enforce any other
security now or hereafter held by the Mortgagee, it being stipulated that the
Mortgagee shall be entitled to enforce this Mortgage and any other security now
or hereafter held by the Mortgagee in such order and manner as the Mortgagee,
in its sole discretion, may determine; every power or remedy given by the Note,
this Mortgage or any of the other Loan Instruments to the Mortgagee, or to
which the Mortgagee is otherwise entitled, may be exercised, concurrently or
independently, from time to time and as often as may be deemed expedient by the
Mortgagee, and the Mortgagee may pursue inconsistent remedies.

 

Section 4.07           Waiver of Stay, Extension,
Moratorium Laws; Equity of Redemption. 
To the maximum extent permitted by law, the Mortgagor shall not at any
time insist upon, or plead, or claim or take any benefit or advantage of any
applicable present or future stay, extension or moratorium law, that may affect
observance or performance of the provisions of this Mortgage; nor claim, take
or insist upon any benefit or advantage of any present or future law providing
for the valuation or appraisal of the Property or any portion thereof prior to
any sale or sales thereof that may be made under or by virtue of Section 4.02;
and the Mortgagor, to the extent that it lawfully may, hereby waives all
benefit or advantage of any such law or laws. 
The Mortgagor for itself and all who may claim under it, hereby waives,
to the maximum extent permitted by applicable law, any and all rights and
equities of redemption from sale under any order or decree of foreclosure of
this Mortgage and (if a Default shall have occurred) all notice or notices of
seizure, and all right to have the Property marshalled upon any foreclosure
hereof.  To the extent permitted by
applicable law, the Mortgagee shall not be obligated to pursue or exhaust its
rights or remedies as against any other part of the Property and the Mortgagor
hereby waives any right or claim of right to have the Mortgagee proceed in any
particular order.

 

15

 

ARTICLE 5

Environmental

 

Section 5.01           Environmental Representations and
Warranties of Mortgagor.

 

(a)           Mortgagor covenants, represents and
warrants to Mortgagee that to its actual knowledge, and except as disclosed on
Schedule 5 attached hereto:

 

(i)            The
Property is not being used to refine, produce, store, handle, transfer, process
or transport Hazardous Material, except in compliance with Environmental
Regulations;

 

(ii)           Mortgagor
shall not in the future use all or any part of the Property for the purpose of
refining, producing, storing, handling, transferring, processing, or
transporting any pollutants or contaminates or any Hazardous Material or
petroleum products in any manner which would result in a release or threatened
release which could require response under applicable Environmental
Regulations, nor shall Mortgagor permit or suffer any other party to use all or
any part of its Property for any purpose forbidden herein.

 

(iii)          No
violation of any Environmental Regulations now exists regarding the Property.

 

(b)           As used herein, the term “Hazardous
Material” means any radioactive, hazardous, or toxic substance, material,
waste, chemical, or similar item, the presence of which on the Property, or the
discharge, emission, release, or threat of release of which on or from the
Property, is prohibited or otherwise regulated by any laws, ordinances,
statutes, codes, rules, regulations, orders, and decrees of the United States,
the State of, and all local or governmental or regulatory authorities
exercising jurisdiction over Mortgagor or the Property, or which require
special handling in collection, storage, treatment, or disposal by any such
laws or requirements.  The term Hazardous
Material includes, but is not limited to, any material, substance, waste or
similar item which is now or hereafter defined as a hazardous material,
substance or term of similar meaning under the laws of the State of, the
Federal Water Pollution Control Act (33 U.S.C. Section 1317), the Federal
Resource Conservation and Recovery Act (RCRA) (42 U.S.C. Section 6901, et seq.),
the Federal Comprehensive Environmental Response, Compensation and Liability
Act (CERCLA) and (SARA) (42 U.S.C. Section 9601, et seq.), any rules or
regulations adopted by any administrative agency, including, but not limited
to, the Environmental Protection Agency, the Department of Transportation, and
any similar state or local agency having jurisdiction over the Property or the
Hazardous Material, whether or not such rules and regulations have the force of
law.  The term “Environmental Regulations”
as used herein means any federal, state or local laws, statutes, codes,
ordinances, regulations, requirements or rules relating to any environmental
matters, including the removal, handling, and disposal of hazardous or toxic
waste materials.

 

Section 5.02           Environmental Covenants of
Mortgagor.

 

(a)           Mortgagor shall furnish to the United
States Environmental Protection Agency or any lawful authority all information
lawfully requested by them with respect to the operations of the Property.  However, nothing herein shall operate to
prevent Mortgagor from contesting any such information request by all lawful
means.

 

16

 

(b)           Mortgagor shall operate its business
on the Property in a careful and prudent manner, and shall require the tenants
or occupants to avoid and prevent any “release,” as defined in CERCLA § 9601
(22), of any Hazardous Material on or about the Property into any waters or
onto any lands, or air unless such release or disposal is pursuant to and in
compliance with all applicable Environmental Regulations.

 

(c)           Mortgagor shall give written notice
to Mortgagee immediately upon Mortgagor’s acquiring knowledge of the presence
of any Hazardous Material on the Property in violation of Environmental Regulations
or of any Hazardous Material contamination thereon, with a full description
thereof.

 

(d)           Mortgagor shall immediately advise
Mortgagee in writing of any notices received by Mortgagor or its agents,
contractors, authorized representatives and employees, alleging that the
Property contains Hazardous Material in violation of Environmental Regulations
or contamination thereof, or that a violation or potential violation of any
Environmental Regulation laws, ordinances, rules or regulations exists on or at
the Property, or because of actions by Mortgagor, any tenants, or the agents of
the same.

 

(e)           Mortgagor shall immediately advise
Mortgagee in writing of all claims made or threatened by any third party
against Mortgagor, its agents, contractors, authorized representatives and
employees, or the Property relating to damage, contribution, cost recovery
compensation, loss or injury resulting from any Hazardous Material pertaining
to the Property.

 

(f)            Mortgagor shall immediately advise
Mortgagee in writing upon Mortgagor’s acquiring knowledge of any discovery by
Mortgagor’s agents, contractors, authorized representatives or employees, of
any occurrence or condition on the Property or on any real property adjoining
or in the vicinity of the Property which does or could cause the Property to
become contaminated by Hazardous Material or otherwise be in violation of any
Environmental Regulations, or cause the Property to be subject to any
restrictions on the ownership, occupancy, transferability or use thereof under
any Environmental Regulations.

 

(g)           From time to time, during the term of
this Mortgage, if Mortgagee has reasonable cause to believe that an
environmental contamination has occurred at the Property, Mortgagee may notify
Mortgagor in writing that it desires a site assessment or environmental audit (“Audit”)
of the Property to be made.  Thereafter
Mortgagor shall cause such an Audit to be made of the Property at Mortgagor’s
sole expense.  Such Audit(s) shall be
performed in a manner reasonably calculated to confirm and verify compliance
with the provisions of this Mortgage. 
Mortgagor covenants to reasonably cooperate with the persons conducting
the Audit to allow entry and reasonable access to all portions of the Property
for the purpose of the Audit, to supply the auditors with all available
historical and operational information regarding the Property as may reasonably
be requested by the auditors, and to make available for meetings with the
auditors appropriate personnel and tenants having knowledge of the matters
relevant to the Audit.  If the Audit
shows a violation of the covenants contained herein or a violation of any
Environmental Regulations, Mortgagor covenants to comply, at its own cost and
expense, with all recommendations contained in the Audit, including any
recommendation for additional testing and studies to detect the presence of
Hazardous Material, or to otherwise confirm and 

 

17

 

verify Mortgagor’s compliance with the provisions of
this Mortgage, to the extent required by Mortgagee.

 

Section 5.03           Mortgagor’s Obligations to Remedy
Environmental Matters.

 

(a)           In the event any local governmental
authority, any state or the federal government, or any agency of either,
including, but not limited to, the United States Environmental Protection
Agency, notifies Mortgagor that an investigation is being or will be conducted
regarding the Property or that any “removal” or “remedial action” (as these
terms are defined in 42 U.S.C. §§ 9601 (23) and (24) (or successor
legislation), or any clean-up operations of any kind or nature are necessary to
be performed on the Property, or in the event any of such authorities commence,
perform or complete any clean-up operation, then Mortgagor shall notify
Mortgagee thereof and the Mortgagor shall have the right to contest, by any
lawful means, (a) the determination of such governmental authority that such
clean-up operation is necessary, (b) the means or methods of clean-up proposed,
ordered or undertaken by such governmental authority, (c) the extent of the
clean-up proposed, ordered or undertaken by such governmental authority, or (d)
any other matter respecting or relating to the clean-up proposed, ordered or
undertaken by such governmental authority. 
If such contest is unsuccessful, Mortgagor shall comply with any such
determination in full accordance with all of the requirements then imposed.

 

(b)           Mortgagor shall also have the right
to seek contribution, indemnity or any other legal right, remedy or recourse
which Mortgagor has or may have against any party except Mortgagee or its
officers, agents or employees.  Upon the
entry of any final, nonappealable judgment (or the execution of a consent
decree or other agreement between Mortgagor and such governmental authority)
requiting Mortgagor to perform any clean-up operation on the Property, or in
the event Mortgagor does not contest the clean-up ordered or undertaken by such
governmental authority, then Mortgagor shall begin the clean-up operation and
notify Mortgagee of the same, within five (5) days after (i) Mortgagor’s
receipt of notice from such governmental authority that such clean-up is
required, (ii) the commencement of such clean-up operation by such governmental
authority, whichever is earlier, or (iii) the time periods set forth in the
judgment, consent decree or other agreement. 
Mortgagor shall promptly do the following as appropriate:

 

(i)            begin
performance of the clean-up operation;

 

(ii)           cooperate
with any governmental authority conducting any clean-up operation and reimburse
said authority for the cost thereof if required by law to do so; and

 

(iii)          fully
reimburse any other party in accordance with said final nonappealable judgment
for any clean up operation performed as required by law and obtain a release
from such party and furnish Mortgagee a copy of such release.

 

(c)           If Mortgagor fails to remove any
Hazardous Material or otherwise comply with the Environmental Regulations,
Mortgagee may, after notice to Mortgagor and the expiration of any cure period
provided in this Mortgage, declare an Event of Default of this Mortgage and do
whatever is necessary to either eliminate such Hazardous Material from the
Property or 

 

18

 

otherwise cause compliance with the Environmental
Regulations, in addition to exercising the other remedies of Mortgagee
hereunder for a breach of this Mortgage. 
All losses, costs, damages, claims, and expenses incurred by Mortgagee
on account of Mortgagor’s failure to perform the obligations described in this
Mortgage shall be immediately due and payable with interest thereon at the
Default Rate, as such term is defined in the Note.

 

(d)           Mortgagor acknowledges that in the
event any Hazardous Material is removed from the Property by either Mortgagor
or by Mortgagee, the Environmental Protection Agency Generatory Identification
Number used on the waste manifest such Hazardous Material shall be in the name
of the Mortgagor, or Mortgagor’s agent (other than Mortgagee), shall assume all
of Mortgagee’s potential and actual liability for the removal and disposal of
such Hazardous Material.  Mortgagor shall
give and hereby grants to Mortgagee, its agents and employees access to the
Property, and hereby specifically grants the Mortgagee a license, effective
upon expiration of the applicable cure period, if any, to remove such materials
in order to comply with Environmental Regulations.  Notwithstanding the foregoing, Mortgagor
shall not be in default hereunder, and the Mortgagee shall not have the right
to accelerate the Obligations, so long as Mortgagor commences the clean-up
operation within the time periods set forth above and thereafter diligently
prosecutes such clean-up operation to completion.

 

(e)           In exercising any of the remedies
provided herein or taking any of the actions which are authorized herein,
Mortgagee will be acting solely and exclusively as agent for Mortgagor in
attempting to realize the maximum return from the Property and in attempting to
obtain payment to Mortgagee of the amounts which Mortgagee is to receive
pursuant to the Note.  The parties
acknowledge that in so doing, Mortgagee will not be or be deemed to be an “owner”
or “operator” of the Property under any Environmental Regulation, and will not
be assuming any obligations of Mortgagor to fully comply with the Environmental
Regulations.  Mortgagor will specifically
defend and indemnify Mortgagee against any such liability, cost, loss or
expense.

 

Section 5.04           Environmental Indemnification.  Mortgagor hereby agrees to defend, indemnify
and hold Mortgagee (including its successors, assigns, employees, contractors,
agents, officers and directors) harmless from, any and all actions, loss,
liability, damage, cost or expense occasioned by, resulting from, or consequent
to any Hazardous Material or Hazardous Material contamination on the Property;
any releases or discharges of Hazardous Material from the Property; any
manufacturing, treating, storing, maintaining, holding, handling, transporting,
spilling, leaking or dumping of Hazardous Material on, from or at the Property;
any other violation of Hazardous Material laws, ordinances, rules and
regulations; any claim or assertion that any Hazardous Material or Hazardous
Material contamination is located on the Property; any claim that any such
activities or violations have been, or are being, engaged in on the Property;
or any other failure or alleged failure of Mortgagor, Mortgagor’s agents,
contractors, authorized representatives or employees, the Property, to comply
with the provisions of this Agreement. 
This indemnity shall be enforceable notwithstanding any attempts by
Mortgagor to exercise due diligence in ascertaining whether or not any of the
events outlined above affect the Property. 
In fulfilling Mortgagor’s obligations under this Section, Mortgagor is
in no way admitting liability or waiving rights against third parties.  The loss, liability, damage, cost, or expense
which is covered by this indemnity shall include, without limitation, all
foreseeable consequential damages; the costs of any required or necessary
repair, cleanup or detoxification of the Property, including the soil and
ground water thereof, and the preparation and 

 

19

 

implementation of
any closure, remedial or other required plans; damage to any natural resources;
and all reasonable costs and expenses incurred by Mortgagee in connection with
the above, including but not limited to attorneys’ and consultants’ fees.  It is the intent of Mortgagor and Mortgagee that
Mortgagee shall have no liability or responsibility for damage or injury to
human health, the environment or natural resources caused by, for abatement
and/or clean-up of, or otherwise with respect to Hazardous Material by virtue
of the interest of Mortgagee in the Property created hereby, or as the result
of Mortgagee exercising any of its remedies hereunder, including but not
limited to Mortgagee’s becoming the owner of the Property by foreclosure or
conveyance in lieu of foreclosure.  Any
amounts covered by the foregoing indemnification shall be added to the
Obligations otherwise secured by the Mortgage and shall bear interest from the
date incurred at the Default Rate, as such term is defined in the Note, and
shall be payable on demand and be a part of the Obligations secured
hereby.  Such expenses shall be
reimbursed by Mortgagor to Mortgagee as and when such expenses are incurred,
and Mortgagee shall not be required to wait until such losses, costs, damages, liabilities
or expenses have been reduced to judgment.

 

ARTICLE 6

Miscellaneous

 

Section 6.01           Release by Mortgagee.  Upon the termination of the Restructuring
Agreement and the payment in full of the Obligations, the Mortgagee shall
release the lien of this Mortgage, or upon the request of the Mortgagor, and at
the Mortgagor’s expense, assign this Mortgage without recourse to the Mortgagor’s
designee, or to the person or persons legally entitled thereto, by an
instrument duly acknowledged in form for recording.

 

Section 6.02           Second
Mortgage.  Notwithstanding
anything herein to the contrary, this Mortgage is a Second Mortgage subject and
inferior to the Superior Mortgage.  No
Default shall exist and no technical breach of the agreements herein shall
occur as a result of said Superior Mortgage being of record as a lien upon the
Property.  Further, if certain rights
granted to Mortgagee under this Mortgage conflict with the terms of the
Superior Mortgage or the rights granted thereunder, then such rights of Mortgagee
shall be deemed waived to the extent of such conflict while the Superior
Mortgage remains of record as a lien on the Property.

 

Section 6.03           Notices.  All notices, demands, consents, requests or
other communications (collectively, “notices”) that are permitted or
required to be given by any party to the other hereunder shall be in writing
and given in the manner specified in the Restructuring Agreement.

 

Section 6.04           Amendments; Waivers; Etc.  This Mortgage cannot be modified, changed or
discharged except by an agreement in writing, duly acknowledged in form for
recording, signed by the Mortgagor and the Mortgagee with the consent of the
Mortgagee.  For purposes hereof, a
statement by the Mortgagee in any modification or supplement to this Mortgage
to the effect that such modification or supplement has been consented to by the
Mortgagee shall be conclusive evidence of such consent and it shall not be
necessary for a copy of such consent to be recorded with such modification or
supplement as a condition to such modification or supplement being recorded in
the appropriate real estate records.

 

20

 

Section 6.05           Successors and Assigns.  This Mortgage applies to, inures to the
benefit of and binds the Mortgagor and the Mortgagee and their respective
successors and assigns and shall run with the Property.

 

Section 6.06           Captions.  The captions or headings at the beginning of
Articles, Sections and paragraphs hereof are for convenience of reference and
are not a part of this Mortgage.

 

Section 6.07           Severability.  If any term or provision of this Mortgage or
the application thereof to any person or circumstance shall to any extent be
invalid or unenforceable, the remainder of this Mortgage, or the application of
such term or provision to persons or circumstances other than those as to which
it is invalid or unenforceable, shall not be affected thereby, and each term
and provision of this Mortgage shall be valid and enforceable to the maximum
extent permitted by law.  If any portion
of the Obligations shall for any reason not be secured by a valid and
enforceable lien upon any part of the Property, then any payments made in
respect of the Obligations (whether voluntary or under foreclosure or other
enforcement action or procedure or otherwise) shall, for purposes of this
Mortgage (except to the extent otherwise required by applicable law) be deemed
to be made (i) first, in respect of the portion of the Obligations not secured
by the lien of this Mortgage, (ii) second, in respect of the portion of the
Obligations secured by the lien of this Mortgage, but which lien is on less
than all of the Property, and (iii) last, to the portion of the Obligations
secured by the lien of this Mortgage, and which lien is on all of the Property.

 

Section 6.08           Inconsistencies.  In the event of any inconsistencies between
the terms and conditions of this Article 6 and the other provisions of
this Mortgage, the terms and conditions of this Article 6 shall control
and be binding.

 

Section 6.09           Maximum Principal Sum.  It is agreed that the maximum amount of
Obligations secured by this Mortgage, including all advancements, at any one time
shall not exceed $12,000,000.00 (or the equivalent thereof in any foreign
currency), plus interest thereon and any disbursements made for payment of
taxes, special assessments, insurance on the Property, or any other
disbursements made pursuant to the terms of this Mortgage or the Loan
Instruments, including but not limited to all disbursements by Mortgagee
pursuant to 735 ILCS 5/15-1302(b)(5), and interest on all such disbursements.

 

Section 6.10           In Rem
Proceedings.   Supplementing other provisions hereof,
mortgage foreclosures and other In Rem
proceedings against Mortgagor may be brought in Tazewell County, Illinois or
any federal court of competent jurisdiction in Illinois.

 

Section 6.11           Illinois Mortgage Foreclosure Law.  It is the intention of Mortgagor and
Mortgagee that the enforcement of the terms and provisions of this Mortgage
shall be accomplished in accordance with the Illinois Mortgage Foreclosure Law
(the “Act”), 735 ILCS
5/15-1101, et seq., and with respect to such Act Mortgagor agrees and covenants
that:

 

(a)           Mortgagor and Mortgagee shall have
the benefit of all of the provisions of the Act, including, to the extent
provided by law, all amendments thereto which may become effective from time to
time after the date hereof.  In the event
any provision of the Act which is specifically referred to herein may be
repealed, Mortgagee shall have the benefit of such 

 

21

 

provision as most recently existing prior to such
repeal, as though the same were incorporated herein by express reference;

 

(b)           Wherever provision is made in this
Mortgage for insurance policies to bear mortgagee clauses or other loss payable
clauses or endorsements in favor of Mortgagee, or to confer authority upon
Mortgagee to settle or participate in the settlement of losses under policies
of insurance or to hold and disburse or otherwise control use of insurance
proceeds, from and after the entry of judgment of foreclosure, all such rights
and powers of Mortgagee shall continue in Mortgagee as judgment creditor or
mortgagee until confirmation of sale;

 

(c)           Except as varied by a court of law,
all advances, disbursements and expenditures made or incurred by Mortgagee
before and during a foreclosure, and before and after judgment of foreclosure,
and at any time prior to sale, and, where applicable, after sale, and during
the pendency of any related proceedings, for the purpose of preserving or
restoring the Property, preserving the lien of the Mortgage or the priority
thereof, or enforcing the Mortgage, in addition to those otherwise authorized
by this Mortgage or the other Loan Instruments or by the Act (collectively “Protective Advances”), shall have the
benefit of all applicable provisions of the Act.  All Protective Advances shall be so much
additional indebtedness secured by this Mortgage, and shall become immediately
due and payable without notice and with interest thereon from the date of the
advance until paid at the rate of interest payable after default under the
terms of the Restructuring Agreement. 
This Mortgage shall be a lien for all Protective Advances as to
subsequent purchasers and judgment creditors from the time this Mortgage is
recorded pursuant to Subsection (b)(5) of Section 5/15-1302 of the Act;

 

(d)           In addition to any provision of this
Mortgage authorizing Mortgagee to take or be placed in possession of the
Property, or for the appointment of a receiver, Mortgagee shall have the right,
in accordance with Sections 5/15-1701 and 5/15-1702 of the Act, to be placed in
possession of the Property or at its request to have a receiver appointed, and
such receiver, or Mortgagee, if and when placed in possession, shall have, in
addition to any other powers provided in this Mortgage, all rights, powers,
immunities, and duties as provided for in Sections 5/15-1701, 5/15-1703 and
5/15-1704 of the Act; and

 

(e)           Mortgagor acknowledges that the
Property does not constitute agricultural real estate, as said term is defined
in Section 5/15-1201 of the Act or residential real estate as defined in Section
5/15-1219 of the Act.  As provided by law
and pursuant to Section 5/15-1601(b) of the Act, Mortgagor hereby waives any
and all right of redemption.

 

(Remainder of page intentionally
left blank — Signature page follows)

 

22

 

IN WITNESS WHEREOF, this Mortgage has been duly
executed by the Mortgagor as of the day and year first above written.

 

	
   

  	
  MGP Ingredients, Inc.,
  a Kansas corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Timothy W. Newkirk

  
	
   

  	
   

  	
  Timothy W. Newkirk

  
	
   

  	
   

  	
  Title: President and
  CEO

  

 

 

	
  STATE OF Kansas

  	
  )

  
	
   

  	
  ) SS.

  
	
  COUNTY OF Atchison

  	
  )

  

 

 

I, Marta L. Myers, Notary Public in and for said
County and State, do hereby certify that Timothy W. Newkirk, President of MGP
Ingredients, Inc., a corporation organized under the laws of Kansas, who is
personally known to me to be a officer of said corporation and personally known
to me to be the same person whose name is subscribed to the foregoing
instrument, appeared before me this day in person and acknowledged that he/she
signed and delivered the said instrument as President & CEO of said
corporation, as his free and voluntary act and deed, and the free and voluntary
act and deed of said corporation for the uses and purposes therein set forth.

 

GIVEN under my hand and official seal, this the 11th day of August,
2009.

 

 

	
   

  	
   

  	
  /s/ Marta L. Myers

  
	
   

  	
   

  	
  Notary Public

  
	
   

  	
   

  	
   

  
	
  My commission expires:

  	
  01/03/2010

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  [SEAL]

  	
   

  	
   

  
				

 

23

 

EXHIBIT A

 

THE LAND REFERRED TO IN THIS COMMITMENT IS DESCRIBED
AS FOLLOWS:

 

Tract 1:

 

A part of the Northeast Quarter of Fractional Section 9,
and a part of Lots 6 and 8 in the Southeast Quarter of Fractional Section 4,
said Lots 6 and 8 being shown on plat recorded on page 57 of Plat Book “B”, in
the Recorder’s Office of Tazewell County, Illinois, all being in Township 24
North, Range 5 West of the Third Principal Meridian, Tazewell County, Illinois,
and more particularly described as follows:

 

Commencing at the Northeast corner of said Northeast
Quarter of Fractional Section 9; thence South 89 degrees 29 minutes 14 seconds
West, along the North line of said Fractional Section 9, a distance of 1,629.48
feet to the Place of Beginning; thence from said Place of Beginning South 20
degrees 05 minutes 14 seconds West a distance of 13.41 feet; thence South 86
degrees 48 minutes 22 seconds East a distance of 267.42 feet; thence South 00
degrees 56 minutes 03 seconds West a distance of 159.82 feet to the North line
of The Quaker Oats Company by deed recorded in Book 2045, page 72, of the
Tazewell County Recorder’s Office; thence South 89 degrees 27 minutes 16
seconds West along said North line a distance of 104.33 feet; thence South 00
degrees 56 minutes 03 seconds West along the West line of The Quaker Oats
Company property described as in aforementioned deed, a distance of 253.00 feet
to the South line of The American Distilling Company property; thence South 89
degrees 27 minutes 16 seconds West along the South line of The American
Distilling property, a distance of 850.76 feet to the Southeast corner of a
parcel conveyed by The American Distilling Company to Pekin River and Warehouse
Terminal, Inc., by deed recorded in Book 2351, page 208, of the Tazewell County
Recorder’s Office; thence North 25 degrees 40 minutes 22 seconds West along the
Easterly line of said parcel, a distance of 371.70 feet; thence North 00
degrees 02 minutes 54 seconds West along the Easterly line of said parcel, a
distance of 106.63 feet to the South line of said Fractional Section 4; thence
continuing North 00 degrees 02 minutes 54 seconds along Easterly line of said
parcel 77.64 feet to the Northerly corner of Pekin River and Warehouse Terminal
Inc. property, and also being a point on the Northwesterly line of Lot 8 as
recorded in Plat Book “B”, page 57 feet, of the Tazewell County Recorder’s
Office; thence North 46 degrees 59 minutes 11 seconds East along the
Northwesterly line, of said Lot 8 a distance of 1,110.92 feet; thence South 43
degrees 00 minutes 54 seconds East a distance of 280.47 feet; thence South 42
degrees 00 minutes 08 seconds West, a distance of 188.94 feet; thence South 19
degrees 51 minutes 12 seconds West, a distance of 276.07 feet; thence South 69
degrees 54 minutes 46 seconds East, a distance of 148.90 feet; thence South 20
degrees 05 minutes 14 seconds West, a distance of 182.59 feet to the Place of
Beginning; situate, lying and being in the County of Tazewell and State of
Illinois.

 

Tract 2:

 

A part of the Northeast Quarter of Fractional Section 9,
and a part of Lots 6 and 8 in the Southeast Quarter of Fractional Section 4,
said Lots 6 and 8 being shown on plat recorded in page 57 of Plat Book “B” in
the Recorder’s office of Tazewell County, Illinois, all being in 

 

24

 

Township 24 North, Range 5 West of the Third Principal
Meridian, Tazewell County, Illinois and more particularly described as follows:

 

Commencing at the Southeast corner of the Southeast
Quarter of said Fractional Section 4; thence South 89 degrees 29 minutes 14 seconds
West, along the South line of the Southeast Quarter of Fractional Section 4, a
distance of 1,020.92 feet to a concrete monument being the Place of Beginning
for the Tract herein being described; thence North 37 degrees 03 minutes 04
seconds East a distance of 1,013.11 feet; thence North 57 degrees 55 minutes
West a distance of 292.65 feet to the Northwesterly right-of-way line of South
Front Street; thence North 29 degrees 56 minutes 48 seconds East, along the
Northeasterly right-of-way line of South Front Street, a distance of 481.39
feet to a concrete monument; thence North 46 degrees 54 minutes 36 seconds West
a distance of 263.31 feet to a point on the Northeasterly line of Lot 6 as
recorded in Plat Book “B”, page 57, of the Tazewell County Recorder’s Office;
thence North 24 degrees 46 minutes 48 seconds west, along the Northeasterly
line of said Lot 6 a distance of 35.6 feet; thence North 87 degrees 04 minutes
48 seconds West a distance of 214.55 feet to a point on the Northwesterly line
of said Lot 6; said point being 200 feet from the Northerly corner of said Lot
6; thence South 46 degrees 59 minutes 11 seconds West, along the Northwesterly
line of said Lot 6 and 8 as recorded in Plat Book “B”, page 57 of the Tazewell
County Recorder’s Office, a distance of 1,146.23 feet to the Northerly corner
of Tract I previously described; thence South 43 degrees 00 minutes 54 seconds
East, along said Tract I, a distance of 280.47 feet; thence South 42 degrees 00
minutes 08 seconds West, along said Tract I, a distance of 188.94 feet thence
South 19 degrees 51 minutes 12 seconds West, along said Tract I, a distance of
276.97 feet; thence South 69 degrees 54 minutes 46 seconds East, along said
Tract I, a distance of 148.90 feet; thence South 20 degrees 05 minutes 14
seconds West, along said Tract I, a distance of 196.00 feet; thence South 86
degrees 48 minutes 22 seconds East, along said Tract I, a distance of 267.42
feet; thence South 00 degrees 56 minutes 03 seconds West, along said Tract I, a
distance of 159.82 feet to the property line of Quaker Oats Company; thence
North 89 degrees 27 minutes 16 seconds East, along said property line a
distance of 345.67 feet; thence North 00 degrees 56 minutes 03 seconds East,
along said property line, a distance of 189.47 feet of the Place of Beginning;
situate, lying and being in the County of Tazewell and State of Illinois.

 

25

 

EXHIBIT B

 

Schedule of Permitted Exceptions

 

1.             Mortgage,
dated April 15, 2009, from Mortgagor to Exchange National Bank & Trust Co.,
recorded as Document number 200900008285 in the Records of the Tazewell County
Recorder of Deeds records, in the maximum amount of Two Million Eight Hundred
Thousand Dollars ($2,800,000.00).

 

2.             Easement
in favor of Central Illinois Light Company, and its/their respective successors
and assigns, to install, operate and maintain all equipment necessary for the
purpose of serving the land and other property, together with the right of
access to said equipment, and the provisions relating thereto contained in the
grant recorded/filed in Book 1151, page 213.

 

3.             Easement
in favor of Central Illinois Light Company, and its/their respective successors
and assigns, to install, operate and maintain all equipment necessary for the
purpose of serving the land and other property, together with the right of
access to said equipment, and the provisions relating thereto contained in the
grant recorded/filed in Book 954, page 269.

 

4.             Easement
recorded September 2, 1964 in Vol. 711, page 241, and the terms, provisions and
conditions contained therein.

 

5.             Easement
in favor of Central Illinois Light Company & Middle States Telephone
Company, and its/their respective successors and assigns, to install, operate
and maintain all equipment necessary for the purpose of serving the land and
other property, together with the right of access to said equipment, and the
provisions relating thereto contained in the grant recorded/filed in Vol. 700, page
619.

 

6.             Easement
in favor of Central Illinois Light Company, and its/their respective successors
and assigns, to install, operate and maintain all equipment necessary for the
purpose of serving the land and other property, together with the right of
access to said equipment, and the provisions relating thereto contained in the
grant recorded/filed as document no. 9615914.

 

7.             Easement
in favor of Central Illinois Light Company, and its/their respective successors
and assigns, to install, operate and maintain all equipment necessary for the
purpose of serving the land and other property, together with the right of
access to said equipment, and the provisions relating thereto contained in the
grant recorded/filed in Book 1033, page 331.

 

8.             Easement
in favor of Central Illinois Light Company, and its/their respective successors
and assigns, to install, operate and maintain all equipment necessary for the
purpose of serving the land and other property, together with the right of
access to said equipment, and the provisions relating thereto contained in the
grant recorded/filed in Book 853, page 474.

 

9.             Easement
in favor of Central Illinois Light Company, and its/their respective successors
and assigns, to install, operate and maintain all equipment necessary for the
purpose of serving 

 

26

 

the land and other property, together with the right
of access to said equipment, and the provisions relating thereto contained in
the grant recorded/filed in Vol. 700, page 383.

 

10.           Rights
of way for railroad switch and spur tracks, if any.

 

11.           Rights,
if any, of the United States of America, the State of Illinois, the
municipality and the public in and to that part of the land lying within the
bed of the Illinois River; and the rights of other owners of land bordering on
the river in respect to the water of said river.

 

12.           Consequences
of the meandering of the Illinois River.

 

13.           Encroachment
of the building over the easement recorded April 18, 1973 in Book 954, page 269
as disclosed on the survey prepared by Survey America Inc., dated October 8,
2008 and last revised November 17, 2008.

 

14.           Encroachment
of parking spaces located mainly on the land encroach over and unto property to
the Northeast as disclosed on the survey prepared by Survey America Inc., dated
October 8, 2008 and last revised November 17, 2008.

 

15.           Encroachment
of a retaining wall located mainly on the adjoining property over and onto the
land at the Northwest portion of Tract 2 as disclosed on the survey prepared by
Survey America Inc., dated October 8, 2008 and last revised November 17, 2008.

 

16.           Encroachment
of a building located mainly on the land over and unto property Northwest and
adjoining as disclosed on the survey prepared by Survey America Inc., dated October
8, 2008 and last revised November 17, 2008.

 

17.           Encroachment
of the waste water treatment building located mainly on the land over and unto
property Northwest and adjoining as disclosed on the survey prepared by Survey
America Inc., dated October 8, 2008 and last revised November 17, 2008.

 

18.           Encroachment
of two storage tanks located mainly on the land over and unto property
Northwest and adjoining as disclosed on the survey prepared by Survey America
Inc., dated October 8, 2008 and last revised November 17, 2008.

 

19.           Encroachment
of a fence located mainly on the land over and unto property South and
adjoining and Northwest and adjoining Tract 1 as disclosed on the survey
prepared by Survey America Inc., dated October 8, 2008 and last revised November
17, 2008.

 

20.           Assignment
of Lease agreement made between Amerenenergy Resources Generating Company,
lessee and MGP Ingredients, Inc., lessor dated December 15, 2006 and recorded May
29, 2009 as document no. 09-12216.

 

27Exhbit 4.2.6

 

SUBORDINATION AGREEMENT

 

THIS SUBORDINATION AGREEMENT (this “Agreement”) is dated as of the 14th day of
August, 2009, by and among:

 

MGP INGREDIENTS, INC., a Kansas corporation (the “Borrower”), and

 

CLOUD L. CRAY, JR. TRUST  under
Agreement dated October 25, 1983, a trust established under the laws of
Kansas (the “Cray Trust”), and

 

EXCHANGE NATIONAL BANK & TRUST CO., a Kansas
banking corporation (“Exchange Bank”),
and

 

CENTRAL ILLINOIS LIGHT COMPANY, an Illinois corporation (“Central Illinois Light”).

 

Recitals
of Fact

 

A.                                   Borrower is the
owner of certain real property located in the City of Pekin, Tazewell County,
Illinois, and all improvements thereon (the “Property”),
which is more particularly described in Exhibit “A”
attached to this Agreement and by this reference incorporated in
this Agreement.

 

B.                                     Cray Trust is
the holder of a Mortgage, Assignment of Leases, Security Agreement and Fixture
Filing Financing Statement (the “Cray Mortgage”)
on the Property, dated March 27, 2009 and recorded March 31, 2009 as
document No. 2009 00006858 in the records of Tazewell County, Illinois
(the  “Cray Mortgage”).

 

C.                                     Exchange Bank
is the holder of a Mortgage (the “Exchange Bank Mortgage”)
on the Property, dated April 15, 2009 and recorded April 16, 2009 as
document No. 2009 00008285 in the records of Tazewell County, Illinois
(the  “Exchange Bank Mortgage”).

 

D.                                    On or about
even date herewith, Central Illinois Light is receiving from Borrower a
Mortgage, Assignment of Rents, Security Agreement and Fixture Filing (the “Central Illinois Light Mortgage”) on the Property, which
will be recorded of even date with the Subordination Agreement.

 

E.                                      The Cray Trust
has agreed to subordinate the Cray Mortgage to both the Exchange Mortgage and
the Central Illinois Light Mortgage, so that the Cray Trust will become a third
priority mortgagee on the Property.

 

Subordination

 

NOW,
THEREFORE, in order to induce Central Illinois Light to enter into that certain
Restructuring Agreement dated as of July 25, 2009 and to make certain
financial accommodations to Borrower, which is of benefit to both Borrower and
the Cray Trust, the parties agree as follows:

 

 

1.                                       Consent and Subordination.  Cray Trust hereby consents to the granting by
Borrower of the Central Illinois Light Mortgage, and hereby subordinates the
lien and effect of the Cray Mortgage to the lien and effect of both the
Exchange Bank Mortgage and the Central Illinois Light Mortgage, notwithstanding
the priority which would otherwise be accorded such interests by order of
recording.  Following the recordation of
the Central Illinois Light Mortgage and the recordation of this Subordination
Agreement, it is the intention of the parties that the list of mortgages on the
Property, in order of their priority, will be as follows:

 

	
  First
  priority

  	
  Exchange
  Bank Mortgage in a maximum principal amount of up to $2,800,000.00

  
	
  Second
  priority

  	
  Central
  Illinois Light Mortgage

  
	
  Third priority

  	
  Cray Trust Mortgage

  

 

From and after such recordations, the
respective mortgages shall have the priorities as set forth above.

 

2.                                       Additional Subordination.  The Cray Trust further agrees that all of the
liens, security interests, terms, covenants and conditions of the Cray Mortgage
and all other documents evidencing or relating to the loan secured thereby,
including but not limited to all advances made under the loan (“Cray Loan”) secured by the Cray Mortgage,
shall at all times be wholly subordinate to the liens, security interests,
terms, covenants and conditions of the Exchange Mortgage and the Central
Illinois Light Mortgage and all other documents evidencing or relating to the
loans secured thereby, including but not limited to all advances made under the
loan secured by the Exchange Mortgage and the Central Illinois Light Mortgage,
respectively, as the same may be extended, amended or modified from time to
time.

 

3.                                       Permitted Payments.  The
Borrower may make, and the Cray Trust may retain, scheduled, current (not more
than 30 days past due), non-accelerated payments (but not prepayments) of principal
and interest required to be paid under the note evidencing the Cray Loan.  The Borrower shall be prohibited from making
and the Cray Trust shall be prohibited from receiving and retaining any
payments other than those specified in this Section 3; provided, that upon
the earlier to occur of the following events (A) any filing of a petition
by or against Borrower under the United States Bankruptcy Code or any other
bankruptcy, insolvency, liquidation or similar proceeding or the appointment of
a trustee, receiver or similar officer for Borrower or a substantial proportion
of its assets; or (B) 120 days after delivery of notice to Exchange Bank
and Central Illinois Light of any other event constituting a default by
Borrower under the Cray Loan, the Cray Trust may exercise any remedies
available to it and accept proceeds therefrom to be applied against the
indebtedness owed to the Cray Trust under the Cray Loan.

 

4.                                       Notice of Default. 
Exchange Bank and Central Illinois Power shall give the Cray Trust notices
of any defaults by the Borrower under the loans secured by the Exchange
Mortgage and the Central Illinois Light Mortgage, respectively, at the time
notices of such defaults are given to the Borrower, including copies of each
further notice 

 

2

 

to the Borrower relating to such default, and
copies of each foreclosure notice, notice of sale, pleading or other document
filed in connection with any foreclosure action or proceeding.  Cray Trust shall give Exchange Bank and
Central Illinois Power notices of any defaults by the Borrower under the Loan
at the time notices of such defaults are given to the Borrower, including
copies of each further notice to the Borrower relating to such default, and
copies of each foreclosure notice, notice of sale, pleading or other document
filed in connection with any foreclosure action or proceeding.

 

5.                                       Consent by Exchange Bank.  Exchange Bank hereby consents to the granting
by Borrower of the Central Illinois Power Mortgage, and agrees that such
mortgage shall not constitute a breach of or default under the Exchange Bank
Mortgage.

 

6.                                       Counterpart Signatures.  This Agreement is being signed in several
identical counterparts.  All executed
copies of this Agreement, when taken together, shall constitute one complete
copy of this Agreement, which shall be as enforceable against the parties to
the full and same extent as if all parties executed the same copy hereof.

 

7.                                       Notices.  Unless
otherwise provided herein, any notice delivered under this Agreement shall be
in writing addressed to the respective party as set forth below and may be
personally served, sent by facsimile transmission or sent by overnight courier
service or certified or registered United States mail and shall be deemed to
have been given (a) if delivered in person, when delivered; (b) if
delivered by facsimile transmission, on the date of transmission if transmitted
on a business day before 4:00 p.m. (St. Louis, Missouri time) or, if not,
on the next succeeding business day; (c) if delivered by overnight
courier, one (1) business day after delivery to such courier properly
addressed; or (d) if by United States mail, three (3) business days
after deposit in the United States mail, postage prepaid and properly addressed.

 

Notices
shall be addressed as follows:

 

	
  If
  to Cray Trust:

  	
  Mr. Cloud
  L. Cray, Jr., Trustee

  
	
   

  	
  Cloud
  Cray, Jr. Trust

  
	
   

  	
  20045
  266th Road

  
	
   

  	
  Atchison,
  Kansas 66002

  
	
   

  	
  Fax:
  n/a

  
	
   

  	
   

  
	
  If
  to the Exchange Bank:

  	
  Exchange
  National Bank & Trust Co.

  
	
   

  	
  600
  Commercial Street

  
	
   

  	
  Atchison,
  Kansas 66002

  
	
   

  	
  Attn:
  President

  
	
   

  	
  Fax:
  (913) 367-3297

  
	
   

  	
   

  
	
  If
  to Central Illinois Light:

  	
  Central
  Illinois Light Company

  
	
   

  	
  300
  Liberty Street

  
	
   

  	
  Peoria,
  Illinois 61602

  
	
   

  	
  Attn:
  Stan E. Ogden, Vice President

  
	
   

  	
  Fax:
  (309) 677-5016

  

 

3

 

	
  With a copy to:

  	
  Armstrong Teasdale LLP

  
	
   

  	
  One Metropolitan Square,
  Suite 2600

  
	
   

  	
  St. Louis, Missouri
  63102-2740

  
	
   

  	
  Attn: Daniel J. Godar

  
	
   

  	
  Fax: (314) 612-2249

  

 

8.                                       Governing Law.  The
validity, construction and enforcement of this Agreement are governed by the
internal laws of Illinois without regard to conflict of laws principles.

 

9.                                       Binding Effect.  This Agreement
shall be binding on Cray Trust and its heirs, legal representatives, successors
and assigns and shall inure to the benefit of Central Illinois Light and
Exchange Bank and their respective successors and assigns.

 

10.                                 No Waiver.  No waiver
shall be deemed to be made by the parties hereto of any of their respective
rights under this Agreement, unless the same shall be in writing signed by such
party, and each such waiver, if any, shall be a waiver only with respect to the
specific matter or matters to which the waiver relates and shall in no way
impair the rights of such party or the obligations of any other party.

 

[signatures on following page]

 

4

 

IN
WITNESS WHEREOF, the parties to this Agreement have executed this agreement as
of the date first set forth above.

 

	
  Borrower:

  	
  MGP INGREDIENTS, INC., a Kansas corporation

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Timothy W. Newkirk

  
	
   

  	
   

  	
  Timothy
  W. Newkirk, President

  
	
   

  	
   

  
	
   

  	
   

  
	
  Cray
  Trust:

  	
  CLOUD
  L. CRAY, JR. TRUST under Agreement dated October 25, 1983, a trust
  established under the laws of Kansas

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Cloud L. Cray, Jr.

  
	
   

  	
   

  	
  Cloud
  L. Cray, Jr., Trustee

  
	
   

  	
   

  
	
   

  	
   

  
	
  Exchange
  Bank:

  	
  EXCHANGE
  NATIONAL BANK & TRUST CO., a Kansas banking
  corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Mark Windsor

  
	
   

  	
  Print
  Name: Mark Windsor

  
	
   

  	
  Print
  Title: President

  
	
   

  	
   

  
	
   

  	
   

  
	
  Central
  Illinois Light:

  	
  CENTRAL
  ILLINOIS LIGHT COMPANY, an Illinois corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Stan E. Ogden

  
	
   

  	
  Print
  Name: Stan E. Ogden

  
	
   

  	
  Print
  Title:Vice President

  

 

5

 

	
  STATE
  OF KANSAS

  	
  )

  
	
   

  	
  )
  SS

  
	
  COUNTY
  OF ATCHISON

  	
  )

  

 

I, Marta
L. Myers, a Notary Public in and for said County and State, do hereby certify
that Timothy W. Newkirk, President of MGP Ingredients, Inc., a corporation
organized under the laws of Kansas, who is personally known to me to be the
President of said corporation, and personally known to me to be the same person
whose name is subscribed to the foregoing instrument, appeared before me this
day in person and acknowledged that he/she signed and delivered the said
instrument as President of said corporation, as his free and voluntary act and
deed, and the free and voluntary act and deed of said corporation for the uses
and purposes therein set forth.

 

GIVEN
under my hand and official seal, this the     12th    
day of August, 2009.

 

	
   

  	
  /s/
  Marta L. Myers

  
	
   

  	
  Notary
  Public for said County and State

  

 

My
commission expires:

 

 

	
  STATE
  OF KANSAS

  	
  )

  
	
   

  	
  )
  SS

  
	
  COUNTY
  OF ATCHISON

  	
  )

  

 

I, Marta
L. Myers, a Notary Public in and for said County and State, do hereby certify
that Cloud L. Cray, Jr., the sole Trustee of the Cloud L. Cray, Jr.
Trust established October 25, 1983, a trust established under the laws of
Kansas, who is personally known to me to be the Trustee of said trust, and
personally known to me to be the same person whose name is subscribed to the
foregoing instrument, appeared before me this day in person and acknowledged that
he/she signed and delivered the said instrument as Trustee of said trust, as
his free and voluntary act and deed, and the free and voluntary act and deed of
said trust for the uses and purposes therein set forth.

 

GIVEN
under my hand and official seal, this the      12th      
day of August, 2009.

 

	
   

  	
  Marta
  L. Myers

  
	
   

  	
  Notary
  Public for said County and State

  

 

My
commission expires:

 

6

 

	
  STATE
  OF KANSAS

  	
  )

  
	
   

  	
  )
  SS

  
	
  COUNTY
  OF ATCHISON

  	
  )

  

 

I, Sandra
L. Becker, a Notary Public in and for said County and State, do hereby certify
thatmark Windsor, President of Exchange National Bank & Trust Co., a
Kansas banking corporation, who is personally known to me to be the President
of said corporation, and personally known to me to be the same person whose
name is subscribed to the foregoing instrument, appeared before me this day in
person and acknowledged that he/she signed and delivered the said instrument as
President of said corporation, as his free and voluntary act and deed, and the
free and voluntary act and deed of said corporation for the uses and purposes
therein set forth.

 

GIVEN
under my hand and official seal, this the   11      
day of August, 2009.

 

	
   

  	
  /s/
  Sandra L. Becker

  
	
   

  	
  Notary
  Public for said County and State

  

 

My
commission expires:

 

 

	
  STATE
  OF ILLINOIS

  	
  )

  
	
   

  	
  )
  SS

  
	
  COUNTY
  OFPeoria

  	
  )

  

 

I, Holli
D. Willmert a Notary Public in and for said County and State, do hereby certify
thatStan E. Ogden, VicePresident of Central Illinois Light, Inc., a
corporation organized under the laws of Illinois, who is personally known to me
to be the Vice President of said corporation, and personally known to me to be
the same person whose name is subscribed to the foregoing instrument, appeared
before me this day in person and acknowledged that he/she signed and delivered
the said instrument as Vice President of said corporation, as his free and
voluntary act and deed, and the free and voluntary act and deed of said
corporation for the uses and purposes therein set forth.

 

GIVEN
under my hand and official seal, this the     17    
day of August, 2009.

 

	
   

  	
  /s/
  Holli D. Willmert

  
	
   

  	
  Notary
  Public for said County and State

  

 

My
commission expires:

 

7

 

Exhibit “A”

Legal Description of
Property

City of Pekin, Tazewell
County, Illinois

 

Tract 1:

 

A part of the Northeast
Quarter of Fractional Section 9, and a part of Lots 6 and 8 in the
Southeast Quarter of Fractional Section 4, said Lots 6 and 8 being shown
on plat recorded on page 57 of Plat Book “B”, in the Recorder’s Office of
Tazewell County, Illinois, all being in Township 24 North, Range 5 West of the
Third Principal Meridian, Tazewell County, Illinois, and more particularly
described as follows:

 

Commencing at the Northeast
corner of said Northeast Quarter of Fractional Section 9; thence South 89
degrees 29 minutes 14 seconds West, along the North line of said Fractional Section 9,
a distance of 1,629.48 feet to the Place of Beginning; thence from said Place
of Beginning South 20 degrees 05 minutes 14 seconds West a distance of 13.41
feet; thence South 86 degrees 48 minutes 22 seconds East a distance of 267.42
feet; thence South 00 degrees 56 minutes 03 seconds West a distance of 159.82
feet to the North line of The Quaker Oats Company by deed recorded in Book
2045, page 72, of the Tazewell County Recorder’s Office; thence South 89
degrees 27 minutes 16 seconds West along said North line a distance of 104.33
feet; thence South 00 degrees 56 minutes 03 seconds West along the West line of
The Quaker Oats Company property described as in aforementioned deed, a
distance of 253.00 feet to the South line of The American Distilling Company
property; thence South 89 degrees 27 minutes 16 seconds West along the South
line of The American Distilling property, a distance of 850.76 feet to the
Southeast corner of a parcel conveyed by The American Distilling Company to
Pekin River and Warehouse Terminal, Inc., by deed recorded in Book 2351, page 208,
of the Tazewell County Recorder’s Office; thence North 25 degrees 40 minutes 22
seconds West along the Easterly line of said parcel, a distance of 371.70 feet;
thence North 00 degrees 02 minutes 54 seconds West along the Easterly line of
said parcel, a distance of 106.63 feet to the South line of said Fractional Section 4;
thence continuing North 00 degrees 02 minutes 54 seconds along Easterly line of
said parcel 77.64 feet to the Northerly corner of Pekin River and Warehouse
Terminal Inc. property, and also being a point on the Northwesterly line of Lot
8 as recorded in Plat Book “B”, page 57 feet, of the Tazewell County
Recorder’s Office; thence North 46 degrees 59 minutes 11 seconds East along the
Northwesterly line, of said Lot 8 a distance of 1,110.92 feet; thence South 43
degrees 00 minutes 54 seconds East a distance of 280.47 feet; thence South 42
degrees 00 minutes 08 seconds West, a distance of 188.94 feet; thence South 19
degrees 51 minutes 12 seconds West, a distance of 276.07 feet; thence South 69
degrees 54 minutes 46 seconds East, a distance of 148.90 feet; thence South 20
degrees 05 minutes 14 seconds West, a distance of 182.59 feet to the Place of
Beginning; situate, lying and being in the County of Tazewell and State of
Illinois.

 

Tract 2:

 

A part of the Northeast
Quarter of Fractional Section 9, and a part of Lots 6 and 8 in the
Southeast Quarter of Fractional Section 4, said Lots 6 and 8 being shown
on plat recorded 

 

8

 

in page 57 of Plat Book
“B” in the Recorder’s office of Tazewell County, Illinois, all being in
Township 24 North, Range 5 West of the Third Principal Meridian, Tazewell
County, Illinois and more particularly described as follows:

 

Commencing at the Southeast
corner of the Southeast Quarter of said Fractional Section 4; thence South
89 degrees 29 minutes 14 seconds West, along the South line of the Southeast
Quarter of Fractional Section 4, a distance of 1,020.92 feet to a concrete
monument being the Place of Beginning for the Tract herein being described;
thence North 37 degrees 03 minutes 04 seconds East a distance of 1,013.11 feet;
thence North 57 degrees 55 minutes West a distance of 292.65 feet to the
Northwesterly right-of-way line of South Front Street; thence North 29 degrees
56 minutes 48 seconds East, along the Northeasterly right-of-way line of South
Front Street, a distance of 481.39 feet to a concrete monument; thence North 46
degrees 54 minutes 36 seconds West a distance of 263.31 feet to a point on the
Northeasterly line of Lot 6 as recorded in Plat Book “B”, page 57, of the
Tazewell County Recorder’s Office; thence North 24 degrees 46 minutes 48
seconds west, along the Northeasterly line of said Lot 6 a distance of 35.6
feet; thence North 87 degrees 04 minutes 48 seconds West a distance of 214.55
feet to a point on the Northwesterly line of said Lot 6; said point being 200
feet from the Northerly corner of said Lot 6; thence South 46 degrees 59
minutes 11 seconds West, along the Northwesterly line of said Lot 6 and 8 as
recorded in Plat Book “B”, page 57 of the Tazewell County Recorder’s
Office, a distance of 1,146.23 feet to the Northerly corner of Tract I
previously described; thence South 43 degrees 00 minutes 54 seconds East, along
said Tract I, a distance of 280.47 feet; thence South 42 degrees 00 minutes 08
seconds West, along said Tract I, a distance of 188.94 feet thence South 19
degrees 51 minutes 12 seconds West, along said Tract I, a distance of 276.97
feet; thence South 69 degrees 54 minutes 46 seconds East, along said Tract I, a
distance of 148.90 feet; thence South 20 degrees 05 minutes 14 seconds West,
along said Tract I, a distance of 196.00 feet; thence South 86 degrees 48
minutes 22 seconds East, along said Tract I, a distance of 267.42 feet; thence
South 00 degrees 56 minutes 03 seconds West, along said Tract I, a distance of
159.82 feet to the property line of Quaker Oats Company; thence North 89
degrees 27 minutes 16 seconds East, along said property line a distance of
345.67 feet; thence North 00 degrees 56 minutes 03 seconds East, along said
property line, a distance of 189.47 feet of the Place of Beginning; situate,
lying and being in the County of Tazewell and State of Illinois.

 

9

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