Document:

Exhibit 4.5.2

 

	
  DEBTOR
  NAME AND ADDRESS

  	
  SECURED
  PARTY NAME AND ADDRESS

  
	
   

  	
   

  
	
  MGP
  INGREDIENTS, INC.

  	
  Union
  State Bank of Everest DBA Bank of Atchison USB

  
	
  1300
  Main Street PO Box 130

  	
  701
  Kansas Avenue

  
	
  Atchison,
  KS 66002

  	
  Atchison,
  KS 66002

  
	
   

  	
   

  
	
  Type:
  o individual o partnership x corporation o

  	
   

  
	
  State
  of organization/registration (if applicable) Kansas

  	
   

  
	
  o If checked,
  refer to addendum for additional Debtors and signatures.

  	
   

  

 

COMMERCIAL SECURITY AGREEMENT

 

The
date of this Commercial Security Agreement (Agreement) is March 31, 2009.

 

SECURED DEBTS.  This
Agreement will secure all sums advanced by Secured Party under the terms of
this Agreement and the payment and performance of the following described
Secured Debts that (check one) x Debtor o
                                       
(Borrower) owes to Secured Party:

 

o  Specific Debts.  The following debts and all extensions,
renewals, refinancings, modifications, and replacements (describe):

 

x          All Debts.  All present and future debts, even if this
Agreement is not referenced, the debts are also secured by other collateral, or
the future debt is unrelated to or of a different type than the current
debt.  Nothing in this Agreement is a
commitment to make future loans or advances.

 

SECURITY INTEREST.  To
secure the payment and performance of the Secured Debts, Debtor gives Secured
Party a security interest in all of the Property described in this Agreement
that Debtor owns or has sufficient rights in which to transfer an interest, now
or in the future, wherever the Property is or will be located, and all proceeds
and products of the Property.  “Property”
includes all parts, accessories, repairs, replacements, improvements, and
accessions to the Property; any original evidence of title or ownership; and
all obligations that support the payment or performance of the Property.  “Proceeds” includes anything acquired upon
the sale, lease, license, exchange, or other disposition of the Property; any
rights and claims arising from the Property; and any collections and distributions
on account of the Property.  This
Agreement remains in effect until terminated in writing, even if the Secured
Debts are paid and Secured Party is no longer obligated to advance funds to
Debtor or Borrower.

 

PROPERTY DESCRIPTION.  The Property is described as follows:

 

o       Accounts and Other Rights to
Payment:  All rights to payment, whether
or not earned by performance, including, but not limited to, payment for
property or services sold, leased, rented, licensed, or assigned.  This includes any rights and interests
(including all liens) which Debtor may have by law or agreement against any
account debtor or obligor of Debtor.

 

o       Inventory:  All inventory held for ultimate sale or
lease, or which has been or will be supplied under contracts of service, or
which are raw materials, work in process, or materials used or consumed in
Debtor’s business.

 

o       Equipment:  All equipment including, but not limited to,
machinery, vehicles, furniture, fixtures, manufacturing equipment, farm
machinery and equipment, shop equipment, office and record keeping equipment,
parts, and tools.  The Property includes
any equipment described in a list or schedule Debtor gives to Secured Party,
but such a list is not necessary to create a valid security interest in all of
Debtor’s equipment.

 

o       Instruments and Chattel
Paper:  All instruments, including
negotiable instruments and promissory notes and any other writings or records
that evidence the right to payment of a monetary obligation, and tangible and
electronic chattel paper.

 

o       General Intangibles:  All general intangibles including, but not
limited to, tax refunds, patents and applications for patents, copyrights,
trademarks, trade secrets, goodwill trade names, customer lists, permits and
franchises, payment intangibles, computer programs and all supporting
information provided in connection with a transaction relating to computer
programs, and the right to use Debtor’s name.

 

o       Documents:  All documents of title including, but not
limited to, bills of lading, dock warrants and receipts, and warehouse
receipts.

 

o       Farm Products and
Supplies:  All farm products including,
but not limited to, all poultry and livestock and their young, along with their
produce, products, and replacements; all crops, annual or perennial, and all products
of the crops; and all feed, seed, fertilizer, medicines, and other supplies
used or produced in Debtor’s farming operations.

 

o       Government Payments and
Programs:  All payments, accounts,
general intangibles, and benefits including, but not limited to, payments in
kind, deficiency payments, letters of entitlement, warehouse receipts, storage
payments, emergency assistance and diversion payments, production flexibility
contracts, and conservation reserve payments under any preexisting, current, or
future federal or state government program.

 

o       Investment Property:  All investment property including, but not
limited to, certificated securities, uncertificated securities, securities
entitlements, securities accounts, commodity contracts, commodity accounts, and
financial assets.

 

o       Deposit Accounts:  All deposit accounts including, but not
limited to, demand, time, savings, passbook, and similar accounts.

 

x     Specific Property
Description:  The Property includes, but
is not limited by, the following (if required, provide real estate
description):

 

1)
All equipment, machinery, furniture and fixtures, parts accessories, repairs,
replacements, substitutions and improvements of & to such property and
all proceeds of the foregoing, whether such property or Debtor’s right, title,
or interest therein or thereto is now owned or existing or hereafter acquired
or arising on the property on schedule “A” located in the Flour Mill at 1200 &
1100 Main Street Atchison Kansas and Manufacturing building at 210 S Leonard
Street Onaga Kansas.   2) Real estate
mortgage covering all of MGP’s rights, title and interest in and to all of the
real property, improvements, and fixtures and all proceeds of the foregoing,
whether such property of Debtor’s right, title or interest therein or thereto
is now owned or existing or hereafter acquired or arising, located at the
locations above.  AND  3) including all fixtures and goods that are
to become fixtures on the real property at the locations above.

 

USE
OF PROPERTY.  The Property will be used
for o  personal 
x  business 
o  agricultural 
o
                                    
purposes.

 

SIGNATURES.  Debtor agrees to the terms on pages 1
and 2 of this Agreement and acknowledges receipt of a copy of this Agreement.

 

	
  DEBTOR

  	
   

  	
  SECURED PARTY

  
	
  MGP
  INGREDIENTS, INC.

  	
   

  	
  Union
  State Bank of Everest DBA Bank of Atchison USB

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Timothy
  W. Newkirk, President

  	
   

  	
  Donald
  E. Ball, Senior Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  

 

 

GENERAL
PROVISIONS.  Each Debtor’s
obligations under this Agreement are independent of the obligations of any
other Debtor.  Secured Party may sue each
Debtor individually or together with any other Debtor.  Secured Party may release any part of the
Property and Debtor will remain obligated under this Agreement.  The duties and benefits of this Agreement
will bind the successors and assigns of Debtor and Secured Party.  No modification of this Agreement is
effective unless made in writing and signed by Debtor and Secured Party.  Whenever used, the plural includes the
singular and the singular includes the plural. 
Time is of the essence.

 

APPLICABLE
LAW.  This Agreement is governed by
the laws of the state in which Secured Party is located.  In the event of a dispute, the exclusive
forum, venue, and place of jurisdiction will be the state in which Secured
Party is located, unless otherwise required by law.  If any provision of this Agreement is
unenforceable by law, the unenforceable provision will be severed and the
remaining provisions will still be enforceable.

 

NAME AND
LOCATION.  Debtor’s name
indicated on page 1 is Debtor’s exact legal name.  If Debtor is an individual, Debtor’s address
is Debtor’s principal residence.  If
Debtor is not an individual, Debtor’s address is the location of Debtor’s chief
 executive offices or sole place of business.  If Debtor is an entity organized and
registered under state law, Debtor has provided Debtor’s state of registration
on page 1.  Debtor will provide
verification of registration and location upon Secured Party’s request.  Debtor will provide Secured Party with at
least 30 days notice prior to any change in Debtor’s name, address, or state of
organization or registration.

 

WARRANTIES
AND REPRESENTATIONS.  Debtor has
the right, authority, and power to enter into this Agreement.  The execution and delivery of this Agreement
will not violate any agreement governing Debtor or Debtor’s property, or to
which Debtor is a party.  Debtor makes
the following warranties and representations which continue as long as this
Agreement is in effect:

 

(1)          Debtor is duly organized
and validly existing in all jurisdictions in which Debtor does business;

(2)          the execution
and performance of the terms of this Agreement have been duly authorized, have
received all necessary governmental approval, and will not violate any provision
of law or order;

(3)          other than
previously disclosed to Secured Party, Debtor has not changed Debtor’s name or
principal place of business within the last 10 years and has not used any other
trade or fictitious name; and

(4)          Debtor does not
and will not use any other name without Secured Party’s prior written consent.

 

Debtor
owns all of the Property, and Secured Party’s claim to the Property is ahead of
the claims of any other creditor, except as otherwise agreed and disclosed to
Secured Party prior to any advance on the Secured Debts.  The Property has not been used for any
purpose that would violate any laws or subject the Property to forfeiture or
seizure.

 

DUTIES
TOWARD PROPERTY.  Debtor will
protect the Property and Secured Party’s interest against any competing
claim.  Except as otherwise agreed,
Debtor will keep the Property in Debtor’s possession at the address indicated
on page 1 of this Agreement.  Debtor
will keep the Property in good repair and use the Property only for purposes
specified on page 1.  Debtor will
not use the Property in violation of any law and will pay all taxes and
assessments levied or assessed against the Property.  Secured Party has the right of reasonable
access to inspect the Property, including the right to require Debtor to
assemble and make the Property available to Secured Party.  Debtor will immediately notify Secured Party
of any loss or damage to the Property. 
Debtor will prepare and keep books, records, and accounts about the
Property and Debtor’s business, to which Debtor will allow Secured Party
reasonable access.

 

Debtor
will not sell, offer to sell, license, lease, or otherwise transfer or encumber
the Property without Secured Party’s prior written consent.  Any disposition of the Property will violate
Secured Party’s rights, unless the Property is inventory sold in the ordinary
course of business at fair market value. 
If the Property includes chattel paper or instruments, either as
original collateral or as proceeds of the Property, Debtor will record Secured
Party’s interest on the face of the chattel paper or instruments.

 

If
the Property includes accounts, Debtor will not settle any account for less
than the full value, dispose of the accounts by assignment, or make any
material change in the terms of any account without Secured Party’s prior
written consent.  Debtor will collect all
accounts in the ordinary course of business, unless otherwise required by
Secured Party.  Debtor will keep the
proceeds of the accounts, and any goods returned to Debtor, in trust for
Secured Party and will not commingle the proceeds or returned goods with any of
Debtor’s other property.  Secured Party
has the right to require Debtor to pay Secured Party the full price on any
returned items.  Secured Party may
require account debtors to make payments under the accounts directly to Secured
Party.  Debtor will deliver the accounts
to Secured Party at Secured Party’s request. 
Debtor will give Secured Party at Secured Party’s request.  Debtor will give Secured Party all
statements, reports, certificates, lists of account debtors (showing names,
addresses, and amounts owing), invoices applicable to each account, and any
other data pertaining to the accounts as Secured Party requests.

 

If
the Property includes farm products, Debtor will provide Secured Party with a
list of the buyers, commission merchants, and selling agents to or through whom
Debtor may sell the farm products. 
Debtor authorizes Secured Party to notify any additional parties regarding
Secured Party’s interest in Debtor’s farm products, unless prohibited by
law.  Debtor agrees to plant, cultivate,
and harvest crops in due season.  Debtor
will be in default if any loan proceeds are used for a purpose that will
contribute to excessive erosion of highly erodible land or to the conversion of
wetland to produce or to make possible the production of an agricultural
commodity, further explained in 7 CFR Part 1940, Subpart G, Exhibit M.  If Debtor pledges the Property to Secured
Party (delivers the Property into the possession or control of Secured Party or
a designated third party), Debtor will, upon receipt, deliver any proceeds and
products of the Property to Secured Party. 
Debtor will provide Secured Party with any notices, documents, financial
statements, reports, and other information relating to the Property Debtor
receives as the owner of the Property.

 

PERFECTION
OF SECURITY INTEREST.  Debtor
authorizes Secured Party to file a financing statement covering the Property.
Debtor will comply with, facilitate, and otherwise assist Secured Party in
connection with obtaining possession or control over the Property for purposes
of perfecting Secured Party’s interest under the Uniform Commercial Code.

 

INSURANCE.  Debtor agrees to keep the Property insured
against the risks reasonably associated with the Property until the Property is
released from this Agreement.  Debtor
will maintain this insurance in the amounts Secured Party requires.  Debtor may choose the insurance company,
subject to Secured Party’s approval, which will not be unreasonably
withheld.  Debtor will have the insurance
provider name Secured Party as loss payee on the insurance policy.  Debtor will give Secured Party and the
insurance provider immediate notice of any loss.  Secured Party may apply the insurance proceeds
toward the Secured Debts.  Secured Party
may require additional security as a condition of permitting any insurance
proceeds to be used to repair or replace the Property.  If Secured Party acquires the Property in
damaged condition, Debtor’s rights to any insurance policies and proceeds will
pass to Secured Party to the extent of the Secured Debts.  Debtor will immediately notify Secured Party
of the cancellation or termination of insurance.  If Debtor fails to keep the Property insured,
or fails to provide Secured Party with proof of insurance, Secured Party may
obtain insurance to protect Secured Party’s interest in the Property.  The insurance may include coverages not
originally required of Debtor, may be written by a company other than one
Debtor would choose, and may be written at a higher rate than Debtor could
obtain if Debtor purchased the insurance.

 

AUTHORITY
TO PERFORM.  Debtor
authorizes Secured Party to do anything Secured Party deems reasonably necessary
to protect the Property and Secured Party’s interest in the Property.  If Debtor fails to perform any of Debtor’s
duties under this Agreement, Secured Party is authorized, without notice to
Debtor, to perform the duties or cause them to be performed.  These authorizations include, but are not
limited to, permission to pay for the repair, maintenance, and preservation of
the Property and take any action to realize the value of the Property.  Secured Party’s authority to perform for
Debtor does not create an obligation to perform, and Secured Party’s failure to
perform will not preclude Secured Party from exercising any other rights under
the law or this Agreement.

 

If
Secured Party performs for Debtor, Secured Party will use reasonable care.  Reasonable care will not include any steps
necessary to preserve rights against prior parties or any duty to take action
in connection with the management of the Property.

 

If
Secured Party comes into possession of the Property, Secured Party will
preserve and protect the Property to the extent required by law.  Secured Party’s duty of care with respect to
the Property will be satisfied if Secured Party exercises reasonable care in
the safekeeping of the Property or in the selection of a third party in
possession of the Property.

 

Secured
Party may enforce the obligations of an account debtor or other person
obligated on the Property.  Secured Party
may exercise Debtor’s rights with respect to the account debtor’s or other
person’s obligations to make payment or otherwise render performance to Debtor,
and enforce any security interest that secures such obligations.

 

PURCHASE
MONEY SECURITY INTEREST.  If
the Property includes items purchased with the Secured Debts, the Property
purchased with the Secured Debts will remain subject to Secured Party’s
security interest until the Secured Debts are paid in full.  Payments on any non-purchase money loan also
secured by this Agreement will not be applied to the purchase money loan.  Payments on the purchase money loan will be
applied first to the non-purchase money portion of the loan, if any, and then
to the purchase money portion in the order in which the purchase money Property
was acquired.  If the purchase money
Property was acquired at the same time, payments will be applied in the order
Secured Party selects.  No security
interest will be terminated by application of this formula.

 

DEFAULT.  Debtor will be in default if any of the
following occur and Debtor fails to cure the same within five (5) days:

 

(1)          Debtor (or
Borrower, if not the same) fails to make a payment in full when due;

(2)          Debtor fails to
perform any condition or keep any covenant on this or any debt or agreement
Debtor has with Secured Party;

(3)          a default occurs
under the terms of any instrument or agreement evidencing or pertaining to the
Secured Debts;

(4)          anything else
happens that either causes Secured Party to reasonably believe that Secured
Party will have difficulty in collecting the Secured Debts or significantly
impairs the value of the Property.

 

REMEDIES.  After Debtor defaults, and after Secured
Party gives any legally required notice and opportunity to cure the default,
Secured Party may at Secured Party’s option do any one or more of the
following:

 

(1)          make all or any part of the
Secured Debts immediately due and accrue interest at the highest post-maturity
interest rate;

(2)          require Debtor
to gather the Property and make it available to Secured Party in a reasonable
fashion;

(3)          enter upon
Debtor’s premises and take possession of all or any part of Debtor’s property
for purposes of preserving the Property or its value and use and operate Debtor’s
property to protect Secured Party’s interest, all without payment or
compensation to Debtor;

(4)          use any remedy
allowed by state or federal law, or provided in any agreement evidencing or pertaining
to the Secured Debts.

 

If
Secured Party repossesses the Property or enforces the obligations of an
account debtor, Secured Party may keep or dispose of the Property as provided
by law.  Secured Party will apply the
proceeds of any collection or disposition first to Secured Party’s expenses of
enforcement, which includes reasonable attorneys’ fees and legal expenses to
the extent not prohibited by law, and then to the Secured Debts.  Debtor (or Borrower, if not the same) will be
liable for the deficiency, if any.

 

By
choosing any one or more of these remedies, Secured Party does not give up the
right to use any other remedy.  Secured
Party does not waive a default by not using a remedy.

 

WAIVER.  Debtor waives all claims for damages caused
by Secured Party’s acts or omissions where Secured Party acts in good faith.

 

NOTICE
AND ADDITIONAL DOCUMENTS.  Where
notice is required, Debtor agrees that 10 days prior written notice will be
reasonable notice to Debtor under the 

 

 

Uniform
Commercial Code.  Notice to one party is
notice to all parties.  Debtor agrees to
sign, deliver, and file any additional documents and certifications Secured
Party considers necessary to perfect, continue, or preserve Debtor’s
obligations under this Agreement and to confirm Secured Party’s lien status on
the Property.Exhibit 4.5.3

 

AMENDMENT

TO

COMMERCIAL SECURITY AGREEMENT

 

THIS AMENDMENT TO COMMERCIAL
SECURITY AGREEMENT, dated
as of March 31, 2009 (this “Amendment”), is
entered into as of July 20, 2009 by and between UNION STATE
BANK OF EVEREST DBA BANK OF ATCHISON USB, as Bank (the “Bank”) and MGP INGREDIENTS, INC. a Kansas corporation (the “Borrower”).

 

RECITALS

 

A.           The Borrower and the Bank have entered
into that certain Commercial Security Agreement dated as of March 31, 2009 (as amended
or otherwise modified, the “Security Agreement”).

 

B.           The Borrower and the Bank desire to amend
the Security Agreement to clarify the collateral description.

 

C.           Subject to the representations and
warranties of the Borrower and upon the terms and conditions set forth in this
Amendment, the Bank is willing to grant such amendment as more fully set forth
herein.

 

AGREEMENT

 

NOW, THEREFORE, in consideration of the foregoing
Recitals, and other good and valuable consideration, the receipt and adequacy
of which are hereby acknowledged, and intending to be legally bound, the
Borrower and the Bank hereby agree as follows:

 

SECTION 1.         DEFINED
TERMS.  Capitalized terms used
herein but not otherwise defined herein shall have the meaning assigned to such
terms in the Security Agreement.

 

SECTION 2.         AMENDMENTS.

 

2.1          The Property Description of the Property
subject to the security interest of the Bank under the Security Agreement is
amended and restated to read as follows:

 

The Property consists of the following:

 

(1) All equipment, machinery, furniture and fixtures and parts
accessories located in the Flour Mill at 1100 Main Street, Atchison Kansas
(which real property is legally described in Schedule B hereto) and the
Manufacturing building at 210 S. Leonard Street, Onaga, Kansas (which real property
is legally described in Schedule B hereto), whether now owned or existing or
hereafter acquired or arising, including the property listed in Schedule A
hereto, and all repairs, replacements, substitutions and improvements of and to
such property and all proceeds of the forgoing. 
(2) Real estate mortgage covering all of MGP’s rights, title and
interest in and to all of the real property, improvements and fixtures and all
proceeds of the foregoing, whether now 

 

1

 

owned or existing or hereafter acquired or arising, located at the
locations above specified. (3)  All
fixtures and goods that are to become fixtures on the real property at the
locations above.

 

SECTION 3.         LIMITATIONS ON AMENDMENTS.

 

3.1          The amendment set forth in Sections 2 above is effective for the purposes set forth
herein and will be limited precisely as written and will not be deemed to (a) be
a consent to any amendment, waiver or modification of any other term or
condition of the Security Agreement, (b) otherwise prejudice any right or
remedy which the Bank may now have or may have in the future under or in
connection with the Security Agreement or (c) be a consent to any future
amendment, waiver or modification of any other term or condition of the Security
Agreement.

 

SECTION 4.         REPRESENTATIONS AND WARRANTIES.  In order to induce the Bank to enter into this
Amendment, the Borrower represents and warrant to the Bank as follows:

 

4.1          Immediately after giving effect to this
Amendment, no Default has occurred and is continuing or would result from the
consummation of the transactions contemplated by this Amendment; and

 

4.2          The execution, delivery and performance
by the Borrower of this Amendment are within the Borrower’s powers, have been
duly authorized by all necessary action.

 

SECTION 5.         EXPENSES. 
The Borrower agrees to pay to the Bank upon demand, the amount of any
and all out-of-pocket expenses, including the reasonable fees and expenses of
its counsel, which the Bank may incur in connection with the preparation,
documentation, and negotiation of this Amendment and all related documents.

 

SECTION 6.         EFFECTIVENESS.  This Amendment will become effective as of the date
hereof upon the execution and delivery of this Amendment, whether the same or
different copies, by the Borrower and Bank .

 

SECTION 7.         COUNTERPARTS.  This Amendment may be signed in any number of
counterparts, and by different parties hereto in separate counterparts, with
the same effect as if the signatures to each such counterpart were upon a
single instrument.  All counterparts will
be deemed an original of this Amendment.

 

2

 

IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be executed as of the date first written above.

 

	
  BORROWER:

  	
  MGP INGREDIENTS, INC., a Kansas  corporation

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Timothy W. Newkirk

  
	
   

  	
  Name: Timothy W. Newkirk

  
	
   

  	
  Title: President & CEO

  
	
   

  	
   

  
	
   

  	
   

  
	
  BANK:

  	
  UNION STATE BANK OF EVEREST DBA BANK OF ATCHISON
  USB

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Steven J. Handke

  
	
   

  	
  Name: Steven J. Handke

  
	
   

  	
  Title: President, CEO

  

 

3

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