Document:

Exhibit 10.1

 

AMENDMENT NO. 2

 

TO

 

EMPLOYMENT AGREEMENT

 

BY AND BETWEEN

 

TESSCO TECHNOLOGIES INCORPORATED AND ROBERT B. BARNHILL, JR.

 

TESSCO TECHNOLOGIES INCORPORATED (the “Company”)
and ROBERT B. BARNHILL, JR. (“Executive”) wish to amend the Employment Agreement dated August 31,
2006 (as heretofore amended by Amendment No. 1 thereto, the “Existing Agreement”) to extend the Regular Term thereof (and
reduce the Transition Period thereunder) by three fiscal years as hereinafter
set forth, which amendment will not extend the overall Term of Executive’s
Employment. Capitalized terms defined in the Existing Agreement and used in
this Amendment No. 2 without further definition have the meanings ascribed
to them in the Existing Agreement.

 

Accordingly,
the Existing Agreement is amended as follows, effective as of May 7, 2010
(the “Amendment Effective Date”):

 

1.                                       Recital B
of the Existing Agreement (which, among other things, defines the terms “Regular
Term” and “Transition Period”) is replaced in its entirety with the
following:

 

B.            The
Board of Directors of the Company (the “Board”) is
desirous of securing Executive’s continued commitment to serving as President,
Chief Executive Officer, and Chairman of the Company for the eight-fiscal-year
period commencing as of the Effective Date and extending through the Company’s
fiscal year ending in 2014 (the “Regular Term”), by which time the Board and Executive intend to have
developed a succession plan and to have engaged a new President and CEO. The
Board further wishes to obtain Executive’s commitment to serve in the role of
Executive Chairman (in addition to his service as a member of the Board) during
the two succeeding fiscal years extending through the end of the Company’s
fiscal year ending in 2016 (the “Transition Period”), during which period he would
initially be responsible for transition and then would serve as a senior
advisor to the new CEO and the Board.

 

2.                                       Except as
modified by this Amendment No. 2, the provisions of the Existing Agreement
are hereby ratified and affirmed.

 

[BALANCE OF THIS PAGE INTENTIONALLY BLANK]

 

 

IN WITNESS WHEREOF, the parties have executed
this Amendment No. 2 under seal as of the Amendment Effective Date.

 

	
  WITNESS/ATTEST:

  	
   

  	
  TESSCO TECHNOLOGIES INCORPORATED

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  /S/

  	
   

  	
  By:

  	
  /S/ David M. Young(SEAL)

  
	
   

  	
   

  	
   

  	
  David M. Young

  
	
   

  	
   

  	
   

  	
  Senior Vice President and

  
	
   

  	
   

  	
   

  	
  Chief Financial Officer

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  EXECUTIVE

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
    /S/

  	
   

  	
  /S/ Robert B. Barnhill, Jr. (SEAL)

  
	
   

  	
   

  	
  Robert B. Barnhill, Jr.

  
					

 

2Exhibit 4.1.12

 

Wells Fargo Business Credit

Sixth & Marquette

Minneapolis, Minnesota  55479

612-673-8500

 

February 2,
2010

 

VIA U.S. MAIL &
FACSIMILE (913) 360-5661

 

MGP Ingredients, Inc.

100 Commercial Street

Atchison, KS  66002

Attention:  Timothy W. Newkirk

 

Re:          Certain loans made by Wells Fargo
Bank, National Association (“Lender”) to MGP
Ingredients, Inc., a Kansas corporation (“Borrower”),
pursuant to that certain Credit and Security Agreement dated July 21,
2009, by and between Borrower and Lender (as amended from time to time, the “Credit Agreement”). 
Terms not otherwise defined herein shall have the meanings given in the
Credit Agreement

 

Dear Mr. Newkirk:

 

Borrower owes to certain
General Electric entities (collectively, “GE”)
approximately $2,146,027.00 (the “GE Indebtedness”).  Notwithstanding anything contained in the
Credit Agreement to the contrary, Lender hereby consents to the complete
prepayment of GE Indebtedness by Borrower, provided that (i) Borrower
causes GE to promptly release and terminate the filings and interests set forth
on Exhibit A attached hereto and each other security interest in
the assets of Borrower held by GE, (ii) no Default or Event of Default has
occurred and is continuing at the time of the pay-off and (iii) no Default
or Event of Default will occur after giving effect to the pay-off.  Effective upon the GE Indebtedness pay-off,
Borrower and Lender agree that all references to indebtedness to or liens held
by GE shall be deleted from Schedule 6.3 and Schedule 6.4 of the
Credit Agreement.  On or before February 28,
2010, Borrower shall provide evidence to Lender which is acceptable to Lender
in its sole but reasonable discretion that GE has released and does not hold a
lien in any assets of Borrower.

 

The Credit Agreement,
among other things, prohibits the Borrower from making any contribution or
investment in any Person or Affiliate. 
Borrower has requested that Lender consent to Borrower making a
contribution of up to approximately $1,119,663.00 (the “Firebird
Contribution”) to Firebird Acquisitions, LLC, a Delaware limited
liability company (“Firebird”), a
Subsidiary of Borrower, for the purpose of repaying all obligations owed by
Firebird to Commerce Bank. 
Notwithstanding the provisions of the Credit Agreement and the other
Loan Documents, Lender hereby consents to Borrower making the Firebird
Contribution subject to the following conditions, all of which shall be
acceptable to Lender in its sole and absolute discretion and shall survive the
initial Firebird Contribution:

 

(i)                                    no Default or Event of Default has
occurred and is continuing at the time of the Firebird Contribution;

 

 

(ii)                                 no Default or Event of Default will occur
after giving effect to the Firebird Contribution being made;

 

(iii)                              Firebird shall promptly pay the full amount of the
Firebird Contribution to Commerce Bank and terminate all of it lending
arrangements with Commerce Bank.

 

(iv)                             On or before February 28, 2010,
Borrower shall provide evidence to Lender which is acceptable to Lender in its
sole but reasonable discretion that Commerce Bank has released and does not
hold a lien in any assets of Firebird.

 

Effective upon the
Firebird Contribution, Borrower and Lender agree that all references to
indebtedness to or liens held by Commerce Bank shall be deleted from Schedule
6.4 of the Credit Agreement.  For
Lender’s consent hereunder, Borrower covenants and agrees that it shall not to
permit Firebird to create, incur or suffer to exist any Lien upon or of any of
Firebird’s assets, whether now owned or hereafter acquired, to secure any
indebtedness.

 

In the event you should
have any questions or comments with respect to the matters set forth in this
letter, please do not hesitate to contact me.

 

	
   

  	
   

  	
  WELLS FARGO BANK,

  
	
   

  	
   

  	
   NATIONAL ASSOCIATION

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Becky A. Koehler

  
	
   

  	
   

  	
  Becky
  A. Koehler, its Vice President

  
	
   

  	
   

  	
   

  
	
  ACKNOWLEDGED AND
  AGREED:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  MGP INGREDIENTS, INC.

  	
   

  	
   

  
	
  a Kansas corporation

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Timothy W. Newkirk

  	
   

  	
   

  
	
  Name: 

  	
  Timothy W. Newkirk

  	
   

  	
   

  
	
  Its:
  President & CEO

  	
   

  	
   

  
						

 

2

 

Exhibit A

 

GE
Releases

 

	
  Kansas

  	
   

  	
  4972881

  	
   

  	
  8/23/2001

  	
   

  	
  GE Capital Public Finance, Inc.

  	
   

  	
  Mortgaged Property

  
	
   

  	
   

  	
  5377585 (amends 4972881)

  	
   

  	
  10/18/2002

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  94659027 (amends 4972881)

  	
   

  	
  7/21/2006

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  94659043 (continues 4972881)

  	
   

  	
  7/21/2006

  	
   

  	
   

  	
   

  	
   

  
	
  Kansas

  	
   

  	
  5885181

  	
   

  	
  10/4/2004

  	
   

  	
  GE Capital Public Finance, Inc.

  	
   

  	
  Specific Equipment

  
	
   

  	
   

  	
  5904883 (amends 5885181)

  	
   

  	
  11/12/2004

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  97134547

  	
   

  	
  6/1/2009

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Kansas

  	
   

  	
  6053326

  	
   

  	
  10/4/2005

  	
   

  	
  General Electric Capital
  Corporation

  	
   

  	
  Specific Equipment

  

 

3Exhibit 4.1.13

 

Recording
Requested By,

And After
Recording, Return To:

 

WELLS FARGO BANK,

  NATIONAL ASSOCIATION

MAC N9312-040

109 South 7th Street, 4th Floor

Minneapolis, MN 55402

Telecopier:  (612) 341-2472

Attention:  Becky A. Koehler

 

THE TOTAL AMOUNT
OF PRINCIPAL INDEBTEDNESS SECURED BY THIS MORTGAGE SHALL NOT EXCEED, AT ANY ONE
TIME, THE SUM OF $15,000,000 AS TO THE PROPERTY LOCATED IN THE STATE OF KANSAS,
INCLUDING WITHOUT LIMITATION THE COUNTIES OF ATCHISON, POTTAWATOMIE AND
WYANDOTTE.

 

LEASEHOLD MORTGAGE, ASSIGNMENT OF LEASES AND
RENTS, SECURITY

AGREEMENT AND FIXTURE FILING

 

THIS LEASEHOLD MORTGAGE, ASSIGNMENT OF LEASES AND
RENTS, SECURITY AGREEMENT AND FIXTURE FILING (hereinafter called this “Mortgage”), made as of the 15th day of February, 2010, by
and between MGP INGREDIENTS, INC., a Kansas corporation, with an address at 100
Commercial Street, Atchison, KS 66002 (“Mortgagor”),
and WELLS FARGO BANK, NATIONAL ASSOCIATION, with an address at MAC N9312-040,
109 South Seventh Street, 4th Floor, Minneapolis, MN 55402 (“ Mortgagee”).

 

WITNESSETH: 
That

 

WHEREAS, the City of Atchison, Kansas (the “Issuer”) did issue its Taxable Industrial Revenue Bonds, Series 2006
(MGP Ingredients Project), on December 28, 2006, in an aggregate principal
amount of $7,000,000 (the “Bonds”), the
proceeds of which were used to pay the costs of acquiring, purchasing,
constructing and equipping a project consisting of an office building and a
technical center facility (the “Project”)
located in Atchison County, Kansas.

 

WHEREAS, pursuant to a Lease dated as of December 28,
2006, by and between the Issuer and the Mortgagor evidenced by a Notice of
Lease filed with the Register of Deeds for Atchison County, Kansas on January 16,
2007 and recorded in Book 559 at Page 137 (collectively, the “Lease”), the Issuer has leased the Project, including the
land described in Exhibit A attached hereto and incorporated by
reference (the “Premises”), the Improvements,
Fixtures, Personal Property (as said terms are defined below) to the Mortgagor
in consideration for which the Issuer, pursuant to a Trust Indenture dated as
of the issue date of the Bonds (the “Indenture”) by
and between the Issuer and Commerce Bank, N.A., a Trustee, has issued the
Bonds.

 

WHEREAS, Pursuant to the provisions of a Credit and Security Agreement
dated as of July 21, 2009  (as the same
may from time to time be restated, modified, supplemented or otherwise amended,
the “Credit Agreement”) by and between
Mortgagor and Mortgagee, Mortgagee has made certain loans to the Mortgagor, as
evidenced by certain promissory notes (as the same may from time to time be
extended, restated, modified, supplemented or otherwise amended, the “Note”);

 

WHEREAS, this Mortgage is intended to secure repayment of the Note and
performance of the obligations under the Note, the Credit Agreement and any
other loan document between Mortgagor 

 

1

 

and Mortgagee
(collectively, as the same may from time to time be restated, modified,
supplemented or otherwise amended, the “Loan Documents”);
and

 

NOW, THEREFORE, Mortgagor, in consideration of the
premises, of the obligations to Mortgagor evidenced by the Note, the Credit
Agreement and the other Loan Documents and of other legally sufficient
consideration, the receipt whereof is hereby acknowledged, and in order to
secure the payment of all obligations under the Loan Documents according to
their tenor and effect, together with all other sums due hereunder or under any
other instrument securing the Loan Documents, and to declare the terms and
provisions upon and subject to which the Credit Agreement is to be secured and
repaid, has executed and delivered this Mortgage.

 

GRANTING CLAUSE;
OBLIGATIONS SECURED

 

The Grant.   Mortgagor
does hereby grant, bargain, sell, mortgage, warrant, convey, alien, remise,
release, assign, transfer, grant a security interest in, set over, deliver and
confirm unto Mortgagee, as applicable, upon the terms and conditions of this
Mortgage, each and all of Mortgagor’s right, title and interest in the
following described real and personal property and also grants Mortgagee a
security interest in the personal property described below:

 

1.                                       All of Mortgagor’s right, title and
interest in the Project and the Premises, all tenements and hereditaments
thereunto appertaining and all after acquired interests of every kind and
nature therein, which is situated in the County of Atchison, State of Kansas,
together with all buildings, structures, fixtures, appurtenances, and
improvements thereon situate or which may hereafter be erected or placed
thereon (the “Improvements”), all remainders and
reversions in the Premises and all right, title and interest of Mortgagor in
and to all streets, roads, boulevards, avenues or other public thoroughfares in
front of and adjoining the Premises, including all easements, licenses and
rights-of-way thereunto appurtenant, attached or belonging, and also all right,
title and interest of Mortgagor in and to all strips and gores of land adjacent
to the Premises; and

 

2.                                       All heating, lighting, ventilating,
cooling, refrigeration, water supply apparatus and fixtures, all water closets,
basins, pipes, faucets, mantels, elevators, escalators, and snow and dirt
removal equipment and all other apparatus, fixtures, machinery, equipment and
all replacements thereof, now or hereafter located upon and used or furnished
in connection with the letting or operation of the Premises, which are and
shall be deemed to be a portion of the security for the indebtedness herein
mentioned and covered by this Mortgage (the “Fixtures”);
and

 

3.                                       All equipment and other articles of
personal property now or in the future constituting a part of the Premises, and
all substitutions for changes in or replacements of the whole or any part
thereof, but only to the extent that such substitutions, changes and
replacements constitute a part of the Premises under the terms of the Lease
(collectively, the “Personal Property”);
and

 

4.                                       All of Mortgagor’s contract rights under
the Lease, including, but not limited to the Mortgagor’s right to purchase the
Premises, Project, Improvements, and Personal Property located thereon,
contained in the Lease; and

 

5.                                       All rents, royalties, profits, revenues,
income and other benefits of and from the property subject or required to be
subject to the lien of this Mortgage, and all of the estate, right, title and
interest of every nature whatsoever of Mortgagor in and to the same and every
part and parcel thereof; and

 

6.                                       All right, title and interest of
Mortgagor in and to the following, including the right to receive the same,
to-wit (to the extent not pledged to the Trustee):

 

2

 

6.1.                              All proceeds of insurance paid or payable
as a result of damage to or destruction of the property described above; and

 

6.2.                              Any and all awards or payments, including
interest thereon, which may be made with respect to the property described
above as a result of:  (i) the
exercise of the right of eminent domain; (ii) the alteration of the grade
of any streets or roads; and (iii) any other damage or injury to or
decrease in the value of the property described above,

 

in each such instance to the extent of all amounts
which may be secured by this Mortgage on the date of receipt of any such
insurance proceeds, awards or payments by Mortgagee, and to the extent of
reasonable counsel fees (to the extent now or hereafter permitted by law),
costs and disbursements incurred by Mortgagee in connection with the collection
of any such insurance proceeds, award or payment;

 

all of the same being hereinafter collectively called the “Mortgaged Property”. 
Notwithstanding anything else in this Mortgage to the contrary, the
Mortgaged Property shall not include any property related to the Project,
whether real or personal and whether tangible or intangible, to the extent
owned by the Issuer or the Trustee and leased to Mortgagor pursuant to the
Lease, other than with respect to Mortgagor interest therein under the terms of
the Lease.

 

TO HAVE AND TO HOLD all the above granted Mortgaged
Property, whether now owned or hereafter acquired, unto Mortgagee and its
successors and assigns.

 

ARTICLE 1.

OBLIGATIONS SECURED

 

1.1                                 Obligations Secured. 
Mortgagor makes this grant and assignment for the purpose of securing
the following obligations (each, a “Secured Obligation”
and collectively, the “Secured Obligations”):

 

(a)                                  payment to Mortgagee of all sums at any
time owing and performance of all other obligations arising under or in
connection with the Note with interest as provided therein, executed by
Mortgagor and payable to Mortgagee or its order, together with the payment and
performance of any other indebtedness or obligations incurred in connection
with the credit accommodation evidenced by the Note, whether or not specifically
referenced therein; and

 

(b)                                 payment and performance of all
obligations of Mortgagor under this Mortgage, together with all advances,
payments or other expenditures made by Mortgagee as or for the payment or
performance of any such obligations of Mortgagor; and

 

(c)                                  payment and performance of all
obligations, if any, and the contracts under which they arise, which any rider
attached to and recorded with this Mortgage recites are secured hereby; and

 

(d)                                 payment to Mortgagee of all liability,
whether liquidated or unliquidated, defined, contingent, conditional or of any
other nature whatsoever, and performance of all other obligations, arising
under any swap, derivative, foreign exchange or hedge transaction or
arrangement (or other similar transaction or arrangement howsoever described or
defined) at any time entered into with Mortgagee in connection with any Secured
Obligation; and

 

3

 

(e)                                  payment and performance of all
obligations of Mortgagor under the Loan Documents, together with all advances,
payments or other expenditures made by Mortgagee as or for the payment or
performance of any such obligations of Mortgagor; and

 

(f)                                    payment and performance of all future
advances and other obligations that the then record owner of the Mortgaged
Property may agree to pay and/or perform (whether as principal, surety or
guarantor) for the benefit of Mortgagee, when any such advance or other
obligation is evidenced by a writing which recites that it is secured by this Mortgage;
and

 

(g)                                 all modifications, extensions and
renewals of any of the Secured Obligations (including without limitation, (i) modifications,
extensions or renewals at a different rate of interest, or (ii) deferrals
or accelerations of the required principal payment dates or interest payment
dates or both, in whole or in part), however evidenced, whether or not any such
modification, extension or renewal is evidenced by a new or additional
promissory note or notes.

 

1.2                                 Obligations. 
The term “obligations” is used herein in its most comprehensive sense
and includes any and all advances, debts, obligations and liabilities
heretofore, now or hereafter made, incurred or created, whether voluntary or
involuntary and however arising, whether due or not due, absolute or
contingent, liquidated or unliquidated, determined or undetermined, joint or
several, including without limitation, all principal, interest, charges,
including prepayment charges and late charges, and loan fees at any time
accruing or assessed on any Secured Obligation.

 

1.3                                 Incorporation. 
All terms of the Secured Obligations are incorporated herein by this
reference.  All persons who may have or
acquire an interest in the Mortgaged Property are hereby deemed to have notice
of the terms of the Secured Obligations and to have notice, if provided
therein, that:  (a) the Note or any
other Secured Obligation may permit borrowing, repayment and reborrowing;  and (b) the rate of interest on one or
more of the Secured Obligations may vary from time to time.

 

1.4                                 Future
Advances.  This Mortgage
secures all future advances and obligations under the Secured Obligations up to
the maximum principal sum of $15,000,000 pursuant to K.S.A. 58-2336
(the
“Maximum Sum”) for the Mortgaged
Property located in the state of Kansas. 
The total amount of obligations and advances secured hereby may decrease
or increase from time to time, provided that the amount of the lien shall not
at any time exceed the Maximum Sum, all accrued interest thereon, and all
amounts (other than principal) payable by any obligor under the Secured
Obligations, including, without limitation, all taxes and insurance premiums
paid or advanced by Mortgagee with respect to the Mortgaged Property, all costs
of enforcing and foreclosing on the lien of this Mortgage, and all sums
expended or incurred for the protection of the security interest hereby created
in the Mortgaged Property, regardless whether the foregoing was advanced, paid,
incurred or expended prior to the date hereof or at any future time or times.

 

ARTICLE 2.

PARTICULAR COVENANTS OF GRANTOR

 

Mortgagor covenants and agrees with Mortgagee as
follows:

 

2.1.                              Payment of Credit Agreement and the
Secured Obligations.  That it will pay the Credit Agreement and the
Secured Obligations in full as herein and in the Credit Agreement and the Loan
Documents provided and will perform and keep all the covenants and agreements
in this Mortgage, the Credit Agreement, the Loan Documents and in all other
instruments securing payment of the Credit Agreement, Loan Documents and the
Secured Obligations.

 

4

 

2.2.                              Title and Lien. 
That at the delivery hereof, it is in possession of the Mortgaged
Property as tenant under the Lease hereinabove granted and is seized of a the
leasehold estate created thereby, free and clear of all liens and encumbrances
except for those encumbrances which are of public record, that it has full
power to subject the same to the lien hereof and that it will warrant and
defend the title to such leasehold estate forever against the claims and
demands of all persons whomsoever.

 

2.3.                              That the lien created by this Mortgage is
a first lien on the Mortgaged Property and that it will keep the same and the
rights, privileges and appurtenances thereto free from all lien claims of every
kind ranking on a parity with or having priority over this Mortgage and will
protect and defend the title and possession thereof so that this Mortgage shall
be and remain a first lien thereon until said debt be fully paid, or if
foreclosure sale be had hereunder so that the purchaser at the said sale shall
acquire good title in fee simple to the Mortgaged Property free and clear of
all liens and encumbrances.  Borrower
represents, covenants, and warrants:

 

2.3.1.                     that the Lease is in full force and effect and has not
been modified or amended in any manner whatsoever;

 

2.3.2.                     that there are no defaults under the Lease, and no
event has occurred, that, with the giving of notice, the passage of time, or
both, would constitute a default under the Lease;

 

2.3.3.                     that all rents, additional rents, and other sums due
and payable under the Lease have been paid in full to the extent they were
payable before the date of this Mortgage;

 

2.3.4.                     that neither Borrower nor the landlord under the Lease
has commenced any action or given or received any notice for the purpose of
terminating the Lease;

 

2.3.5.                     that the interest of the tenant under the Lease is
vested in the Borrower;

 

2.3.6.                     the quiet and peaceful possession of Lender, subject
to the rights of the Issuer as owner and and the Mortgagor as tenant under the
Lease; and

 

2.3.7.                     that the Borrower will defend the leasehold estate
created by the Lease for the entire remainder of the term set forth in the
Lease, against all and every person or persons lawfully claiming, or who may
claim the same or any part of the Lease, subject only tot he payment of the
rents reserved in the Lease and to the performance and observance of all the
terms, covenants, conditions and warranties of the Lease.

 

2.4.                              Lease.  The Mortgaged
Property includes a leasehold estate pursuant to the Lease under which
Mortgagor is the lessee.  In respect of
the Lease, Mortgagor hereby covenants, warrants and agrees to and with
Mortgagee that:

 

(a)                                  In no event shall Mortgagor do or permit
to be done, or omit to do or permit the omission of, any act or thing, the
doing of or omission to do, which would impair the lien of this Mortgage or
would constitute grounds for the termination of any such Lease, or, with the
giving of notice or the passage of time or both, would entitle the landlord
thereunder to declare a forfeiture thereof or a default thereunder, or to
re-enter the property covered by such Lease;

 

(b)                                 Mortgagor will not release, surrender or
terminate the Lease without the prior written consent of Mortgagee, nor without
similar consent will Mortgagor modify, amend or change in any manner any of the
terms, provisions, covenants or agreements contained in the Lease, except for
such amendments as do not materially reduce the rights or increase the
obligations of Mortgagor under the Lease;

 

5

 

(c)                                  There shall be no merger of any of the
Lease or the estate created thereby or of any building, building service
equipment or other improvements now or hereafter constituting a portion of the
Mortgaged Property with the fee estate of the land and premises covered by such
Lease, by reason of the fact that any of said Agreements or the interests and
estates created thereby or any interest in such building, equipment or other
improvement be held directly or indirectly by or for the account of any person
or persons who shall hold the fee estate in that portion of the Mortgaged
Property covered by such Lease or any portion thereof or any interest in such
fee estate; nor shall there be a merger by reason of the fact that all or any
part of the estates or any interests of Mortgagor under the Lease may be
conveyed or mortgaged to a person who shall hold the fee estate in the Premises
covered thereby or any portion thereof; and

 

(d)                                 If Mortgagor (or a successor under the
Lease) becomes the owner of the fee estate of the Premises covered thereby,
this Mortgage shall, without further act or deed, be deemed to have spread to,
shall cover and subject such fee estate to the lien and charge of this
Mortgage.

 

2.5.                              Lease Obligations.  
Mortgagor covenants that, in addition to the payment of all rents,
additional rent, impositions and other payments and charges required to be paid
by Mortgagor under the pursuant to the provisions of the Lease, Mortgagor will:

 

(a)                                  Diligently perform and observe all of the
terms, covenants and conditions of the Lease required to be performed and
observed by Mortgagor thereunder, to the end that all things shall be done
which are necessary and appropriate to keep unimpaired Mortgagor’s rights under
the Lease;

 

(b)                                 Promptly notify Mortgagee in writing of
any default by any lessor or other party under the Lease in the performance or
observance of any of the terms, covenants or conditions on the part of such
lessor or other party to be performed or observed thereunder;

 

(c)                                  Promptly (i) advise Mortgagee in
writing of the giving of any notice by any lessor, sublessor or any other party
under the Lease to Mortgagor of any default by Mortgagor in the performance or
observance of any of the terms, covenants or conditions contained in the Lease
on the part of Mortgagor to be performed or observed, and (ii) deliver to
Mortgagee a true copy of each such notice;

 

(d)                                 At least sixty (60) days prior to the
last day upon which Mortgagor may validly exercise any option to renew or
extend the term of the Lease, give written notice to Mortgagee of Mortgagor’s
intention to so exercise said option or not exercise all such renewal or
extension options; it is expressly agreed that, in the event of Mortgagor’s
failure to exercise any option to renew or extend the term of the Lease
pursuant to the provisions hereof Mortgagee shall have, and is hereby granted,
the irrevocable right to exercise any such option either in its own name and
behalf or in the name and behalf of a designee or nominee of Mortgagee or in
the name and behalf of Mortgagor, as Mortgagee in its sole discretion shall
determine;

 

(e)                                  Promptly notify Mortgagee in writing in
the event of the initiation of any litigation or court proceedings with respect
to the Lease, it being agreed that (i) Mortgagee shall have the right to
enter such litigation or court proceedings to preserve its rights under this
Mortgage at the expense of Mortgagor, and (ii) if, at the time such
litigation or court proceedings shall be initiated, Mortgagor shall be in
default in the performance or observance of any term, covenant, condition or
other requirement hereof or of the Lease on the part of Mortgagor to be
performed or observed, Mortgagee shall have and is hereby granted the sole and
exclusive right to defend or prosecute, as appropriate, the rights, obligations
or duties of Mortgagor therein, provided that nothing 

 

6

 

herein shall impose any duty upon Mortgagee to enter
in any such litigation or court proceedings; and

 

(f)                                    Within 30 days after written demand by
Mortgagee, use its best abilities to obtain from the lessor, sublessor or any
other party under the Lease and furnish to Mortgagor an estoppel certificate of
such party in form and content reasonably required by Mortgagee.

 

2.6.                              Lease Default.  
Mortgagor further covenants that:

 

(a)                                  Should Mortgagor fail to perform and
observe all of such terms, covenants and conditions of the Lease without
reliance upon notice or any period of grace, Mortgagee may (but shall be under
no obligation to) take any action, without allowing for notice or the
expiration of any period of grace, as Mortgagee may deem necessary or desirable
to prevent or cure any default of Mortgagor under the Lease;

 

(b)                                 Upon receipt by Mortgagee of any notice
of default under the Lease by Mortgagor, Mortgagee shall be entitled to rely
thereon following notification of Mortgagor of Mortgagee’s receipt of such
notice of default and take such action (even though Mortgagor denies or
questions the existence of such default);

 

(c)                                  Mortgagee shall have the right to enter
all or any portion of the Premises at such times and in such manner as
Mortgagee deems appropriate to prevent or to cure any such default; and

 

(d)                                 All monies expended by Mortgagee to
prevent or to cure any such default, together with interest thereon, shall be
payable upon demand and shall be secured by the Mortgage.

 

2.7.                              Further Assurances. 
That it will, at its expense, do all such further acts and execute,
acknowledge, deliver and record financing and continuation statements and all
such further instruments as Mortgagee shall require to:

 

(a)                                  continue, preserve and maintain this
Mortgage as a valid and subsisting first and prior lien and security interest
upon the Mortgaged Property enforceable in accordance with the terms and
provisions of this Mortgage;

 

(b)                                 preserve and maintain the rights created
by any other instruments securing the payment of the Credit Agreement, Loan
Documents and the Secured Obligations; and

 

(c)                                  preserve and maintain the priority of
this Mortgage and all such other instruments securing the payment of the Credit
Agreement and the Loan Documents and the record notice thereof so that no
rights or liens of others shall gain parity with or priority over this Mortgage
and the other instruments securing the payment of the Credit Agreement, Loan
Documents and the Secured Obligations.

 

2.8.                              Taxes, Assessments and Utilities. 
That it will forthwith pay all taxes, assessments, water and sewer
charges and public charges, general and special, of every nature, now existing
against the Mortgaged Property, the improvements thereon and appurtenances
thereto, and pay before delinquent all taxes, assessments, water and sewer
charges and public charges, general and special, of every nature hereafter
levied or assessed thereon.  In the event
of the enactment after the date hereof of any Federal law or law of the State
of Kansas deducting from the value of land for the purpose of taxation, any
lien thereon, or changing in any way the laws now in force for the taxation of
mortgages or debts secured by mortgages, or the manner of the collection of any
such taxes, so as to materially or adversely affect this Mortgage or the debt
secured hereby, then, in such case the whole of the unpaid 

 

7

 

principal sum secured by this Mortgage, together with the interest
accrued thereon, shall, at the option of Mortgagee and without notice to any
party, become immediately due and payable; provided, however, Mortgagee agrees
that it will not exercise such option to so declare such indebtedness to be
immediately due and payable if Mortgagor shall pay before the same shall be
delinquent any tax, imposition or assessment imposed by any such law resulting
in Mortgagee having to bear directly or indirectly the whole or any part of any
tax, imposition or assessment imposed upon or with respect to the Mortgaged
Property or this Mortgage or the lien created hereby.   Mortgagor will pay (or cause to be paid)
before delinquent all charges for gas, electricity, water, sewer or other
public utility services furnished to the Mortgaged Property.

 

In the event Mortgagor shall fail to pay any of the
foregoing before delinquent Mortgagee may (but shall not be obligated to) pay
the same and any interest and penalties thereon and the sums so advanced with
all costs and expenses thereof shall be secured hereby in accordance with the
provisions of Section 2.14 below.

 

Insurance. 
The Mortgagor shall insure the Mortgaged Property as required by the
Credit Agreement.

 

2.9.                              Environmental Representations and
Warranties.  Mortgagor represents and warrants,  that, to the best of Mortgagor’s knowledge,
except as disclosed in or permitted by the Credit Agreement:  (a) there are no Hazardous Substances
(defined below) or underground storage tanks in, on, or under the Property,
except those that are both (i) in compliance with Environmental Laws (defined
below) and with permits issued pursuant thereto, if any, and (ii) fully
disclosed to Mortgagee in writing; (b) there are no past or present
Releases (defined below) of Hazardous Substances in violation of any
Environmental Law or which would require Remediation (defined below) by a
Governmental Authority in, on, under or from the Property except as described
in the Environmental Report; (c) there is no past or present
non-compliance with Environmental Laws, or with permits issued pursuant
thereto, in connection with the Property; (d) Mortgagor does not know of,
and has not received, any written or oral notice or other communication from
any person or entity (including, but not limited to a governmental entity)
relating to Hazardous Substances or Remediation thereof, of possible liability
of any person or entity pursuant to any Environmental Law, other environmental
conditions in connection with the Property, or any actual administrative or
judicial proceedings in connection with any of the foregoing; and (e) Mortgagor
has truthfully and fully provided to Mortgagee, in writing, any and all
information relating to environmental conditions in, on, under or from the
Property that is known to Mortgagor and that is contained in Mortgagor’s files
and records, including, but not limited to any reports relating to Hazardous
Substances in, on, under or from the Property and/or to the environmental
condition of the Property. “Environmental Law” means any present, future,
federal, state and local laws, statutes, ordinances, rules, regulations and the
like, as well as common law, relating to protection of human health or the
environment, relating to Hazardous Substances, relating to liability for or
costs of Remediation or prevention of Releases of Hazardous Substances or
relating to liability for or costs of other actual or threatened danger to
human health or the environment.  “Environmental
Law” includes, but is not limited to, the following statutes, as amended, any
successor thereto, and any regulations promulgated pursuant thereto, and any
state or local statutes, ordinances, rules, regulations and the like addressing
similar issues: the Comprehensive Environmental Response, Compensation and
Liability Act; the Emergency Planning and Community Right-to-Know Act; the Hazardous
Substances Transportation Act; the Resource Conservation and Recovery Act
(including, but not limited to Subtitle I relating to underground storage
tanks); the Solid Waste Disposal Act; the Clean Water Act; the Clean Air Act;
the Toxic Substances Control Act; the Safe Drinking Water Act; the Occupational
Safety and Health Act; the Federal Water Pollution Control Act; the Federal
Insecticide, Fungicide and Rodenticide Act; the Endangered Species Act; the
National Environmental Policy Act; and the River and Harbors Appropriation
Act.  “Environmental Law” also includes,
but is not limited to, any present or future, federal, state and local laws,
statutes, ordinances, rules, regulations and the like, as well as common law:
conditioning transfer of property upon a negative declaration or other approval
of a governmental authority of the environmental condition of the property;
requiring notification or disclosure of Releases of Hazardous Substances or
other environmental condition of the Property to any governmental authority or
other person or entity, whether or not in connection with transfer of title to
or interest in property.  “Hazardous
Substances” include but are not limited to any and all

 

8

 

substances
(whether solid, liquid or gas) (i) defined, listed, or otherwise
classified as pollutants, hazardous wastes, hazardous substances, hazardous
materials, extremely hazardous wastes, or words of similar meaning or
regulatory effect under any present or future, Environmental Laws or (ii) that
may have a negative impact on human health or the environment, including, but
not limited to petroleum and petroleum products, asbestos and
asbestos-containing materials, polychlorinated biphenyls, lead, radon, radioactive
materials, flammables and explosives.  “Release”
of any Hazardous Substance includes, but is not limited to any release,
deposit, discharge, emission, leaking, spilling, seeping, migrating, injecting,
pumping, pouring, emptying, escaping, dumping, disposing or other movement of
Hazardous Substances.  “Remediation”
includes, but is not limited to any response, remedial removal, or corrective
action, any activity to cleanup, detoxify, decontaminate, contain or otherwise
remediate any Hazardous Substance, any actions to prevent, cure or mitigate any
Release of any Hazardous Substance, any action to comply with any Environmental
Laws or with any permits issued pursuant thereto, any inspection,
investigation, study, monitoring, assessment, audit, sampling and testing,
laboratory or other analysis, or evaluation relating to any Hazardous
Substances or to anything referred to in this Article.

 

2.10.                        Environmental Covenants. 
Mortgagor covenants and agrees that so long as the Mortgagor owns,
manages, is in possession of, or otherwise controls the operation of the
Property: (a) all uses and operations on or of the Property, whether by
Mortgagor or any other person or entity, shall be in compliance with all
Environmental Laws and permits issued pursuant thereto; (b) there shall be
no Releases of Hazardous Substances in, on, under or from the Property which
are not promptly remediated; (c) there shall be no Hazardous Substances
in, on, or under the Property, except those that are in compliance with all
Environmental Laws and with permits issued pursuant thereto, if and to the
extent required; (d) Mortgagor shall keep the Property free and clear of
all liens and other encumbrances imposed pursuant to any Environmental Law,
whether due to any act or omission of Mortgagor or any other person or entity
(the “Environmental Liens”); (e) Mortgagor shall, at its sole cost and
expense, fully and expeditiously cooperate in all activities pursuant to Section 2.11
below, including, but not limited to providing all relevant information and
making knowledgeable persons available for interviews; (f) Mortgagor
shall, at its sole cost and expense, perform any environmental site assessment
or other investigation of environmental conditions in connection with the
Property, pursuant to any reasonable written request of Mortgagee after
Mortgagee has reason to believe this Section has been violated (including,
but not limited to sampling, testing and analysis of soil, water, air, building
materials and other materials and substances whether solid, liquid or gas), and
share with Mortgagee the reports and other results thereof, and Mortgagee shall
be entitled to rely on such reports and other results thereof; (g) Mortgagor
shall, at its sole cost and expense, comply with all reasonable written requests
of Mortgagee to (i) reasonably effectuate Remediation of any condition
(including, but not limited to a Release of a Hazardous Substance) in, on,
under or from the Property, (ii) comply with any Environmental Law, (iii) comply
with any directive from any governmental authority, and (iv) take any
other reasonable action necessary or appropriate for protection of human health
or the environment; (h) Mortgagor shall not do or allow any tenant or
other user of the Property to do any act that materially increases the dangers
to human health or the environment, poses an unreasonable risk of harm to any
person or entity (whether on or off the Property), impairs or may impair the
value of the Property, is contrary to any requirement of any insurer, constitutes
a public or private nuisance, constitutes waste, or violates any covenant,
condition, agreement or easement applicable to the Property; and (i) Mortgagor
shall immediately notify Mortgagee in writing promptly after it has become
aware of (A) any presence or Releases or threatened Releases of Hazardous
Substances in, on, under, from or migrating towards the Property which is
required to be reported to a governmental authority under any Environmental
Law, (B) any actual Environmental Lien affecting the Property, (C) any
required Remediation of environmental conditions relating to the Property, and (D) any
written or oral notice or other communication of which Mortgagor becomes aware
from any source whatsoever (including, but not limited to a governmental entity)
relating in any way to Hazardous Substances or Remediation thereof, possible
liability of any person or entity pursuant to any Environmental Law, other
environmental conditions in connection with the Property, or any actual or
threatened administrative or judicial proceedings in connection with anything
referred to in this Article.

 

2.11.                        Mortgagee’s Rights. Mortgagee, its environmental
consultant, and any other person or entity designated by Mortgagee, including,
but not limited to any receiver and any representative of a governmental
entity, shall have the right, but not the obligation, at intervals of not less
than one year,

 

9

 

or more frequently
if the Mortgagee reasonably believes that a Hazardous Substance or other
environmental condition violates or threatens to violate any Environmental Law,
after notice to Mortgagor, to enter upon the Property at all reasonable times
to assess any and all aspects of the environmental condition of the Property and
its use, including, but not limited to conducting any environmental assessment
or audit of the Property or portions thereof to confirm Mortgagor’s compliance
with the provisions of this Article, and Mortgagor shall cooperate in all
reasonable ways with Mortgagee in connection with any such audit.  Such audit shall be performed in a manner so
as to minimize interference with the conduct of business at the Property.  If such audit discloses that a violation of
or a liability under any Environmental Law exists or if such audit was required
or prescribed by law, regulation or governmental or quasi-governmental
authority, Mortgagor shall pay all costs and expenses incurred in connection
with such audit; otherwise, the costs and expenses of such audit shall, notwithstanding
anything to the contrary set forth in this Section, be paid by Mortgagee.

 

2.12.                        Maintenance of Improvements.  
Mortgagor will:

 

(a)                                  keep the Mortgaged Property in good order
and repair, and will not commit or suffer waste thereon, nor remove, raze or
demolish any of the improvements located on the Premises without the prior
written consent of Mortgagee, nor do or permit to be done any act whereby the
Mortgaged Property shall become less valuable;

 

(b)                                 perform and comply with, and cause the
Mortgaged Property to be maintained, used and operated in accordance with, any
and all (i) present and future laws, ordinances, rules, regulations and
requirements of every duly constituted governmental or quasi-governmental
authority or agency having jurisdiction over Mortgagor or the Mortgaged
Property or any part thereof.

 

(c)                                  maintain and keep in full force and
effect all licenses, permits and consents necessary or required by any such
governmental authority or agency.

 

2.13.                        Protection of Mortgaged Property and
Rights.  Mortgagee shall have the right and power to
institute and maintain or defend or intervene in such suits and proceedings as
it may reasonably and in good faith deem necessary to:

 

(a)                                  prevent any impairment of the Mortgaged
Property by any acts which may be unlawful or constitute any violation of this
Mortgage;

 

(b)                                 enforce, defend, preserve or protect its
interest (including the priority of the lien created hereby) in and to the
Mortgaged Property and the income, royalties, revenue, rents, profits and other
benefits arising therefrom and its rights and remedies under this Mortgage;

 

(c)                                  restrain the enforcement of or compliance
with any legislation or other governmental enactment, rule or order that
may be unconstitutional or otherwise invalid, if the enforcement of or
compliance with such enactment, rule or order would substantially impair
the security hereunder or be substantially prejudicial to the interest of
Mortgagee; and

 

(d)                                 defend, preserve or protect its interests
should Mortgagee become a party to any suit or proceeding by reason of this
Mortgage.

 

All of Mortgagee’s costs and expenses (including attorneys’ fees to the
extent permitted by law) incurred in any such actions shall be secured hereby
and be paid by Mortgagor on demand as provided in Section 2.14
below.

 

10

 

2.14.                        Advances Secured.  If Mortgagor
shall fail to perform any of its obligations under this Article and if
Mortgagee shall advance its funds for any of the purposes specified in such
Sections or if Mortgagee shall advance sums for or in connection with any suit
or proceeding referred to in of this Article, then the sums so advanced by
Mortgagee, together with the costs and expenses of effecting the same, shall be
payable on demand with interest from the date of payment.  All sums advanced by Mortgagee under the
provisions this Article and the costs and expenses thereof with interest
from the date of the advance at the rate ten percent (10%) per annum shall be
added to and become a part of the indebtedness of Mortgagor until paid and the
repayment thereof shall be secured by this Mortgage with the same priority and
in the same manner as the indebtedness evidenced by the Credit Agreement and
the Loan Documents secured hereby.

 

2.15.                        Damage to Mortgaged Property. 
Subject to the prior rights of the City under the Lease, if all or any
part of the Mortgaged Property shall be damaged by fire or other casualty,
Mortgagor will promptly restore the Mortgaged Property to the equivalent of its
original condition, regardless of whether or not there shall be any insurance
proceeds therefor, except if Mortgagee, shall elect to apply the insurance
proceeds to the payment of the Credit Agreement, the Loan Documents and any
other indebtedness secured hereby, Mortgagor shall not be obligated to so
restore the Mortgaged Property.  If a
part of the Mortgaged Property shall be physically damaged through
condemnation, Mortgagor will promptly restore, repair or alter that portion of
the Mortgaged Property remaining after such condemnation in a manner
satisfactory to Mortgagee, except if Mortgagee shall elect to apply the
condemnation proceeds to the payment of the Credit Agreement, the Loan
Documents and any other indebtedness secured hereby, Mortgagor shall not be
obligated to restore the Mortgaged Property.

 

2.16.                        Inspections.  Mortgagee is
hereby authorized to enter upon and inspect the Mortgaged Property at any time
upon twenty-four (24) hours prior notice to any tenant during normal business
hours during the life of this Mortgage and for such purposes is hereby granted
an easement to enter upon and inspect the Mortgaged Property.

 

2.17.                        Replacements - Alterations. 
None of the improvements, fixtures, apparatus or equipment, except
personal property, trade fixtures and other property owned by or leased to the
tenant, now or hereafter owned or leased by Mortgagor and now or hereafter
attached to or located upon and used or furnished in connection with the
operation or letting of the Mortgaged Property or any part thereof shall be
removed without the prior written consent of Mortgagee unless replaced with
similar property of equal or greater value and no building now or hereafter on
the Premises shall be materially structurally altered without the prior written
consent of Mortgagee.  The consent of
Mortgagee shall not be unreasonably withheld, and Mortgagee shall be deemed to
have consented to any proposed removal or material structural alteration unless
it objects within ten (10) days following written notice thereof.

 

2.18.                        Demolition - Eminent Domain. 
Subject to the prior rights of the City under the Lease, if upon the
actual or threatened waste, demolition or removal of any of the improvements
now or hereafter on the Premises or the condemnation or other taking
(including, without limiting the generality of the foregoing, changes of grades
of streets) under the power of eminent domain of all or any part of the
Mortgaged Property or upon any other damage or injury to or decrease in the
value of the Mortgaged Property, the entire indebtedness secured hereby shall,
at the option of Mortgagee, without notice, become immediately due and
payable.  Subject to the prior rights of
the City under the Lease, if Mortgagor hereby assigns to Mortgagee as
additional security for the debt secured hereby, all awards in any and all such
proceedings, including all awards or payments for injury or damage to or
decrease in the value of the Mortgaged Property, which may, at the option of
Mortgagee, be applied on the indebtedness hereby secured after first deducting
the costs and expenses of Mortgagee (including attorneys’ fees to the extent
permitted by law) incurred in such proceedings and any balance of such monies
then remaining shall be paid to Mortgagor. 
Mortgagor will give notice of any such proceedings or event to Mortgagee
and Mortgagee may intervene therein for the protection of its interest in the
Mortgaged Property.   Mortgagor will
execute and deliver to Mortgagee from time to time such further instruments as
may be requested by Mortgagee to confirm such assignment to Mortgagee of any
such award or payment.

 

11

 

2.19.                        Rent Assignment.  That the
income, rents and profits and rental value of the Mortgaged Property and any
and all present or future leases and rental and occupancy agreements are hereby
pledged and assigned to Mortgagee as additional security for the payment of the
indebtedness secured hereby; provided, however, until an Event of Default (as
defined in the Credit Agreement), Mortgagor shall be suffered and permitted to
use and enjoy the Mortgaged Property and to receive when due, but not more than
one (1) month in advance, except upon written approval of Mortgagee, the
income, rents and profits and rental value thereof.

 

In the event and during the continuance of an Event of
Default, Mortgagee, at its option and without notice, shall have full power and
authority to do and perform any one or more of the following, to-wit:

 

(a)                                  to take possession of the Mortgaged
Property and to operate and maintain the same with full power and authority to
lease the whole or any part thereof and to collect the income, rents and
profits therefrom;

 

(b)                                 to institute and carry on all actions and
proceedings deemed necessary for the recovery of possession or the protection
of all or any portion of the Mortgaged Property and to institute and prosecute
all actions and proceedings for the collection of income, rents and rental
value then due and unpaid and thereafter to become due;

 

(c)                                  to make repairs, improvements,
alterations or additions deemed necessary;

 

(d)                                 to pay the costs and expenses (including,
to the extent not prohibited by law, attorneys’ fees if one be employed) of any
or all of the foregoing out of the income, rents and profits received, and to
apply the balance toward the cost of discharging the obligations imposed upon
Mortgagor by this Mortgage, the Credit Agreement or the Loan Documents secured
hereby; and

 

(e)                                  Mortgagee shall in addition be entitled
to have a receiver appointed ex  parte by a court of proper
jurisdiction to perform any and all of the functions specified in subparagraphs
(a), (b), (c) and (d), above.

 

The foregoing powers and
authorities contained in subparagraphs (a) to (e), inclusive, shall be
operative whether or not foreclosure proceedings have been initiated and shall
remain in effect after sale and during redemption periods, if any.  Upon or after an Event of Default, Mortgagee,
in addition to the foregoing, at its option and without notice, shall have full
right, power and authority to enter upon the Mortgaged Property and collect the
income, rents and profits hereby assigned with or without taking possession
thereof.

 

2.20.                        Leases Affecting Mortgaged Property.  
Mortgagor will comply with and observe its obligations as landlord under
all leases affecting all or any part of the Mortgaged Property.   Mortgagor will not amend, cancel, abridge,
terminate, or otherwise modify any existing or future lease of the Mortgaged
Property, or any part thereof, or enter into any new lease, sublease, renewals,
or extension, or accept any prepayment of rent or installments of rent for more
than one month in advance, without the prior written consent of Mortgagee,
which consent shall not be unreasonably withheld or delayed.  Notwithstanding the foregoing, Mortgagor
shall not be required to obtain the prior consent of Mortgagee to enter into
any new lease provided that such new lease meets the following
requirements:  (1) The lease is on
the current form lease used by Mortgagor for the Mortgaged Property as approved
by Mortgagee; (2) The minimum annual rent per square foot of lease space
under such new lease is not less than the minimum annual rent per square of
leased space for the then existing lease of any portion of the Mortgaged
Property with the lowest rental rate, and (3) Upon execution of the lease,
a copy of the executed lease shall be delivered to Mortgagee.  Notwithstanding the foregoing, Mortgagor
shall have the right to make non-material changes to any lease of the Mortgaged
Property without the prior written 

 

12

 

consent of Mortgagee.   Mortgagor
shall also have the right to renew or extend the term of any lease of the
Mortgaged Property provided that the rental is equal to or greater than the
rental during the expired lease term and the other terms of the lease remain
materially the same as the terms in effect during the expired lease term.  If requested by Mortgagee, Mortgagor will
separately assign to Mortgagee, as additional security, any and all such leases
whether now existing or hereafter created, including, without limitation, all
rents, royalties, issues and profits of the Mortgaged Property from time to
time accruing.

 

At the request of Mortgagee, Mortgagor will enter into
appropriate agreements which will effect the subordination of this Mortgage to
any present or future leases of all or any part of the Mortgaged Property.

 

2.21.                        No Further Assignments of Leases - Rents.  
Mortgagor will make no assignment of leases, income, rents, profits or
rental value of the Mortgaged Property for any present or future debts or
obligations other than those secured by this Mortgage.

 

2.22.                        Leases - Foreclosure.  In the event
of a default under this Mortgage, which default remains uncured after the
expiration of any applicable cure period, Mortgagee, at Mortgagee’s option, is
authorized to foreclose this Mortgage subject to the rights of any tenants of
the Mortgaged Property, and the failure to make any such tenants parties
defendant to any such foreclosure proceeding and to foreclose their rights will
not be, nor be asserted to be by Mortgagor, a defense to any proceedings
instituted by Mortgagee to collect the sums secured hereby or any deficiency
remaining unpaid after the foreclosure sale of the Mortgaged Property.

 

2.23.                        Maximum Interest.  No provision
of this Mortgage or any other instrument securing the Credit Agreement or the
Loan Documents shall require the payment or permit the collection of interest
in excess of the maximum amount permitted by law.  If any excess of interest in such respect is
herein, in the Credit Agreement, the Loan Documents or in such other instrument
provided for, or shall be adjudicated to be so provided for herein, in the
Credit Agreement, the Loan Documents or in such other instrument, neither
Mortgagor nor its successors in title shall be obligated to pay such interest
in excess of the maximum amount not prohibited by law and the right to demand
the payment of any such excess shall be and hereby is waived.  This provision shall control any other
provision of the Credit Agreement, the Loan Documents, this Mortgage or such
other instrument.  If any such excess
interest shall have been paid by Mortgagor, it shall automatically be treated
as a permitted additional prepayment of principal, but no premium for such
payment shall be charged to Mortgagor.

 

2.24.                        Security Agreement.  This Mortgage
in addition to being a first lien on the Mortgaged Property, is also a Security
Agreement by and between Mortgagor, as debtor, and Mortgagee, as secured party,
with respect to that portion of the Mortgaged Property which is subject to the
Uniform Commercial Code, and this Mortgage creates and grants to Mortgagee a
first lien and security interest in all such Mortgaged Property until the
obligations hereunder, under the Credit Agreement, the Loan Documents and the
other Loan Documents are paid and performed in full.   Mortgagor hereby grants to Mortgagee a
security interest in all such property as security for the payment and
performance of said obligations.  Upon
the occurrence of any Event of Default, Mortgagee shall have all the rights and
remedies of a secured party under the Uniform Commercial Code and any other
applicable laws.  This Mortgage will also
constitute a Uniform Commercial Code financing statement for purposes of perfecting
Mortgagee’s interest in the Mortgaged Property.

 

2.25.                        Waiver of Redemption. In the event of a default by Mortgagor in the
performance of the obligations imposed upon it by the terms of this Mortgage,
the Credit Agreement, the Loan Documents secured hereby or any other instrument
securing said Credit Agreement and the Credit Agreement, neither Mortgagor nor
anyone claiming through or under it shall or will set up, claim or seek to take
advantage of any stay, extension or redemption laws or redemption periods of
grace periods (except as provided for herein) now or hereafter in force and
affecting the Mortgaged Property in order to prevent or hinder enforcement,
foreclosure, sale, confirmation of sale or conveyance of the Mortgaged Property
upon foreclosure or the final and absolute putting in possession thereof
immediately after any such sale of

 

13

 

the purchaser or purchasers thereat, and Mortgagor, for itself and its
successors in title, to the full extent that it may lawfully do so for itself
and its successors in title, hereby waives the benefit of all such laws.

 

2.26.                        Transfer or Further Encumbrance of Mortgaged Property. 
If Mortgagor sells, assigns, conveys, transfers or otherwise alienates
or further mortgages or encumbers the Mortgaged Property or any part thereof or
interest therein, whether legal or equitable, and whether voluntarily or
involuntarily (by foreclosure or otherwise) or by operation of law, without in
each such instance obtaining the prior written consent of Mortgagee (which
consent may be withheld for any reason), Mortgagee may, at its option,
accelerate the maturity of the Credit Agreement and the Loan Documents secured
hereby.  For the purposes of this
paragraph, the disposition or other transfer of stock (or any general
partnership interest) in Mortgagor (if applicable), except by devise or
descent, shall be deemed a transfer of an interest in the Mortgaged Property.

 

2.27.                        Fixture Filing.  Certain of
the Mortgaged Property is or will become “fixtures” (as that term is defined in
the UCC) on the Mortgaged Property.  Upon
recording this Mortgage in the real property records, this Mortgage shall be
effective as a financing statement filed as a fixture filing.  In addition, a carbon, photographic or other
reproduction of this Mortgage and/or any financing statement relating hereto
shall be sufficient for filing and/or recording as a financing statement.  The filing of any other financing statement
relating to any personal property rights or interests described herein shall
not be construed to diminish any right or priority hereunder.

 

ARTICLE 3.

DEFEASANCE - DEFAULTS

 

Mortgagor covenants and agrees as follows:

 

3.1.                              Defeasance.  If the
payments due under the Credit Agreement and the Loan Documents, and interest
thereon be paid when due and the covenants and agreements in the Credit
Agreement, the Loan Documents, this Mortgage and all other instruments securing
the payment thereof be faithfully kept and performed, then these presents shall
be null and void and the Mortgaged Property shall be released from the lien
hereof at the cost of Mortgagor.

 

3.2.                              Defaults.  Subject to
any applicable notice or grace period provided herein (if any), if any one or
more of the following defaults shall occur:

 

(a)                                  if default shall be made in the payment
of any obligations on or under the Credit Agreement, the Loan Documents or any
payment required pursuant to Section 1.1 of this Mortgage, when and
as the same shall become due and payable, or in any other payment on the Credit
Agreement or the Loan Documents, when and as the same shall become due and
payable, whether at maturity, by acceleration or as a part of any prepayment or
otherwise, as in the Credit Agreement, the Loan Documents or this Mortgage provided;
or

 

(b)                                 if default shall be made in the due
observance or performance of any covenant or agreement contained in this
Mortgage; or

 

(c)                                  if default shall be made in the due
observance or performance of any covenant, condition or agreement of Mortgagor
contained in any other instrument securing the Credit Agreement or the Loan
Documents; or

 

(d)                                 if a receiver, trustee or liquidation (or
other similar official) of Mortgagor or any other Mortgagor or of the Mortgaged
Property or any portion thereof, shall be appointed in any proceeding or by any
federal or state officer or agency and shall 

 

14

 

not be discharged within sixty (60) days after such
appointment or if Mortgagor or any other Mortgagor shall consent to such
appointment; or

 

(e)                                  if Mortgagor or any other Mortgagor shall
file a petition in bankruptcy or for reorganization or for an arrangement
pursuant to the Bankruptcy Act or any similar federal or state law, now or
hereafter in effect, or shall make an assignment for the benefit of its
creditors or shall admit in writing its inability to pay its debts generally as
they become due, or shall be dissolved, or shall suspend payment of its
obligations or shall take any action in furtherance of any of the foregoing; or
if a petition or an answer shall be filed proposing the adjudication of
Mortgagor or any other Mortgagor as a bankrupt or its reorganization or for
arrangement under the Bankruptcy Act or any similar federal or state law, now
or hereafter in effect, and (1) such party shall consent to the filing
thereof, or (2) such petition or answer shall not be discharged or denied
within sixty (60) days after the filing thereof; or

 

(f)                                    if final judgment for the payment of
money in excess of $50,000 shall be rendered against Mortgagor or any other
Mortgagor and such party shall not discharge the same or provide for its
discharge in accordance with its terms or procure a stay of execution thereon
within the period following such final judgment and prior to the execution
thereon, or such longer period during which execution on such judgment shall
have been stayed, or appeal from such judgment or from the order, decree or
process upon or pursuant to which such judgment shall have been granted, passed
or entered and cause the execution thereof to be stayed during such appeal, and
if on appeal such judgment, order, decree or process shall be affirmed and such
party shall not discharge such judgment or provide for its discharge in
accordance with its terms within sixty (60) days after the entry of the order
or decree of affirmance; or

 

(g)                                 if an “Event of Default” has occurred
under the Credit Agreement (as defined therein) or the Loan Documents,
including, without limitation, a default under the Loan Documents (as defined
in the Credit Agreement); or

 

(h)                                 if default shall be made in the due
observance or performance of any covenant, condition or agreement executed by
Mortgagor or Guarantor (as defined in the Credit Agreement) in favor of
Mortgagee as contained in any other instrument, including, without limitation,
the Credit Agreement (as defined in the Credit Agreement);

 

then, and in every such case, this Mortgage shall stay in force and
during the continuance of any such default:

 

(i)                                     Mortgagee may declare any and all amounts
due under the Credit Agreement or the Loan Documents (if not then due and
payable), to be due and payable immediately, and upon any such amounts due
under the Credit Agreement or the Loan Documents shall become and be
immediately due and payable, anything in the Credit Agreement, the Loan
Documents or in this Mortgage to the contrary notwithstanding;

 

(ii)                                  Mortgagee shall be entitled to foreclose
this Mortgage as a mortgage and shall be entitled to a judgment for the sum due
upon the Credit Agreement, the Loan Documents and any additional sums paid by
virtue of this Mortgage, including all costs and expenses of enforcing the same
and reasonable attorneys’ fees, to the extent permitted by law, and shall be
entitled to a decree for the sale of the Mortgaged Property in satisfaction of
said judgment foreclosing all of the rights and equities of Mortgagor in and to
the Mortgaged Property, as well as all persons claiming under them and at which
sale appraisement of the Mortgaged Property is hereby expressly waived by
Mortgagor;

 

15

 

(iii)                               Mortgagee shall continue to have the
optional rights to exercise any or all other powers, rights and remedies given
Mortgagee by this Mortgage, including, and not by way of limitation, the right
to pay taxes, assessments, insurance and the cost of repairs and the like given
to it by Article I above and the repayment of all such funds with interest
thereon as hereinabove provided shall be secured by this Mortgage;

 

(iv)                              Mortgagee shall have all the rights and
remedies of a secured party under the Uniform Commercial Code; and

 

(v)                                 Mortgagee shall have, in addition to the
foregoing, all rights and remedies given by law and equity, including the right
to have a receiver appointed for the Mortgaged Property.

 

No remedy granted or conferred by this Mortgage is
intended to be exclusive of any other remedy or remedies and each and every
remedy shall be cumulative and shall be in addition to every remedy given
hereunder or now or hereafter existing at law or in equity or by statute.  No delay or omission of Mortgagee to exercise
any right or power accruing upon any default shall impair any such right or
power or shall be construed to be a waiver of any such default or any
acquiescence therein and every right, power and remedy given by this Mortgage
or now or hereafter existing at law or in equity or by statute may be exercised
from time to time and as often as may be deemed expedient by Mortgagee.

 

ARTICLE 4.

MISCELLANEOUS

 

Mortgagor covenants and agrees as follows:

 

4.1                                 No Waiver of Provisions. 
No failure by Mortgagee to insist upon the strict performance of any
covenant, agreement, term or condition of this Mortgage or to exercise any
right or remedy consequent upon a breach thereof, and no acceptance of full or
partial payment on the Credit Agreement or the Loan Documents during the
continuance of any such breach, shall constitute a waiver of any such breach or
of such covenant, agreement, term or condition. 
No covenant, agreement, term or condition of this Mortgage to be
performed or complied with by Mortgagor, and no breach thereof, shall be
waived, altered or modified except by an instrument executed by Mortgagee.  No waiver of any breach shall affect or alter
this Mortgage, but each and every covenant, agreement, term and condition of
this Mortgage shall continue in full force and effect with respect to any other
then existing or subsequent breach hereof.

 

4.2                                 Extensions.  That any
extension of the time for payment of the indebtedness secured hereby, release
of security or any modification of the instrument or instruments evidencing the
indebtedness secured hereby, granted to any future owner of the Mortgaged
Property or to any other party or entity liable in any capacity for such
indebtedness, shall not relieve Mortgagor or any other such party or entity
from liability to pay said indebtedness nor release Mortgagor or any such party
or entity liable for such indebtedness with respect thereto and Mortgagor does
hereby waive presentment and demand for payment, notice of nonpayment and
notice of protest.

 

4.3                                 Powers not Exhausted. 
No right or power given to Mortgagee by this instrument shall be
exhausted by the exercise thereof on one or more occasions, but the same shall
be a continuing right or power during the entire term of this Mortgage and may
be exercised from time to time in accordance with the provisions of this
instrument.

 

4.4                                 Covenants Run with Land. 
The covenants and agreements hereinabove contained shall run with the land
and shall bind and inure to the benefit of the respective heirs, executors,
administrators, legal representatives, successors and assigns of the parties
hereto, but neither this 

 

16

 

Section 4.4 nor Section 4.6 of this Article 4 shall be
construed as constituting Mortgagee’s consent to any assignment, conveyance or
other transfer by Mortgagor of its interest in the Mortgaged Property.

 

4.5                                 Subrogation. 
Mortgagee, before a sale hereunder, and the purchaser at the sale
hereunder, shall be subrogated to the lien of any prior encumbrance or vendor’s
lien, if any, on the Mortgaged Property paid out of the money secured by this
Mortgage, whether or not such prior lien or encumbrance has been released of
record.

 

4.6                                 Successors and Assigns, Etc. 
Whenever the singular or plural number, or masculine, feminine or neuter
gender is used herein, it shall equally include the other, and every mention of
Mortgagee or Mortgagor shall include the heirs, executors, legal representatives,
administrators, successors and assigns of the party so designated.  If more than one party or entity is
designated as “ Mortgagor” herein, each such party or entity shall be jointly
and severally liable for the performance and observance of all the covenants,
conditions and agreements of this Mortgage to be performed and observed by
Mortgagor.  The terms “Note”, “Mortgage”,
“Credit Agreement” and “Loan Documents” shall include all amendments,
modifications and supplements thereto.

 

4.7                                 Invalid Provisions to Affect No Others;
Conflict.  In case any one or more of the covenants,
agreements, terms or provisions contained in this Mortgage, the Credit
Agreement or the Loan Documents shall be invalid, illegal or unenforceable in
any respect, the validity of the remaining covenants, agreements, terms or
provisions contained herein and in the Credit Agreement and the Loan Documents
shall be in no way affected, prejudiced, limited or impaired thereby.  If there is any conflict between the terms
and conditions contained herein and the terms and conditions contained in the
Credit Agreement or the Loan Documents (including without limitation with
respect to notice and cure periods and covenants related to casualty loss and
condemnation), the terms and conditions in the Credit Agreement or the Loan
Documents (as the case may be) shall govern and control.

 

4.8                                 Notice.  All notices
to be given pursuant to this Mortgage shall be sufficient if mailed postage
prepaid, United States certified or registered mail, return receipt requested,
to the above-described addresses of the parties hereto, or to such other
addresses as a party may request in writing. 
Any notice given hereunder shall be deemed to have been received on the
date such notice is deposited in the mail as aforesaid.

 

4.9                                 Headings.  The headings
of the subdivisions of this Mortgage are for convenience of reference only, are
not to be considered a part hereof, and shall not limit or otherwise affect any
of the terms hereof or the interpretation hereof.

 

4.10                           Governing Law. 
This Mortgage will be construed and enforced according to and governed
by the laws of the State of Kansas.

 

[Signature Page Follows]

 

17

 

IN WITNESS WHEREOF, Mortgagor has executed these presents
as of the day and year first above written.

 

Mortgagor:

 

	
  MGP
  INGREDIENTS, INC.

  	
   

  	
  Address

  
	
  a Kansas
  corporation

  	
   

  	
   

  
	
   

  	
   

  	
  100 Commercial Street,

  
	
   

  	
   

  	
   

  	
  Atchison, KS 66002

  
	
  By:

  	
  /s/ Timothy W.
  Newkirk

  	
   

  	
   

  
	
  Name:

  	
  Timothy W. Newkirk

  	
   

  	
   

  
	
  Its:

  	
  President

  	
   

  	
   

  

 

 

	
  STATE OF KANSAS

  	
  )

  	
   

  	
   

  
	
   

  	
  ) SS.

  	
   

  	
   

  
	
  COUNTY OF
  ATCHISON

  	
  )

  	
   

  	
   

  

 

The foregoing instrument was acknowledged before me
this 15th day of February, 2010, by Timothy W. Newkirk, the President of MGP Ingredients, Inc., a Kansas
corporation on behalf of said corporation.

 

 

	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  /s/ Marta L.
  Myers

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Printed
  Name:Marta :L. Myers

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Notary Public in
  and for said County and State

  

 

My Commission Expires: 
02/01/2014

 

[SEAL]

 

18

 

EXHIBIT A

 

LEGAL
DESCRIPTION

 

The land referred to herein is situated in the
State of Kansas, County of Atchison, described as follows:

 

Tract 1: 
Beginning at the Northeast corner of Lot Fourteen (14), Block Twenty
(20); Thence North 90°00’00” East 90.16 feet along the South line of Commercial
Street to a point 24.84 feet West of the Northeast corner of Lot One (1), in
Block Twenty (20); Thence South 00°11’50” West 135.0 feet to a point 25.19 feet
West of the Southeast corner of Lot Three (3) in Block Twenty (20); Thence
South 90°00’00” West 189.81 feet to the Southwest corner of Lot Twelve (12) in
said Block; Thence North 00°03’00” East 67.50 feet along the East line of
Second Street to the North one-half of Lot Thirteen (13) in said Block; Thence
North 90°00’00” East 100.0 feet along the North one-half of Lot Thirteen (13)
to the East line of Lot Thirteen (13); Thence North 00°03’00” East 67.50 feet
along the East line of the North one-half of Lot Thirteen (13) and all of Lot
Fourteen (14) to the point of beginning, all lying in Block Twenty (20) in that
part of the City of Atchison known and designated as “Old Atchison.”

 

Tract 2:  The
North One-half (N 1/2) of Lot Thirteen (13), and all of Lot Fourteen (14), in
Block Twenty (20), in that part of the City of Atchison usually known and
designated as “Old Atchison.”

 

Tract 3:  Lots
One (1), Two (2) and Three (3), in Block Nineteen (19), in that part of
the City of Atchison usually known and designated as “Old Atchison.”

 

Atchison County, Kansas

 

19

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